Wage Bargaining and Norms of Fairness - a Theoretical Framework for Analysing the Norwegian Wage Formation

Abstract

The focus of this article is on wage formation in Norway in the seventies and eighties Our main question is whether the institutional frames for wage negotiations in Norway are compatible with the new factors and topics which have become increasingly important during the last two decades The new situation is partly due to a more complex structure concerning the character and number of unions taking part in the negotiations But most important is the change in the arguments which are used to legitimate wage claims. None of the traditional economic approaches towards wage bargaining directly take into account the significance of wage comparisons between employees at different plants or among different groups of employees, and here we are at the core of the argument in this article The development during the last years indicates that a theory about what is actually going on in wage negotiations has to take into account the question of wage inequalities and their legitimacy, i e the question of a fair wage distribution The wage level and wage growth for other groups or in other firms today has quite a different impact on the outcome of the negotiations than is assumed in traditional bargaining theory. The significance of norms of fairness is not limited to the study of local bargaining processes With increasing strength the normative perspective also becomes necessary to our understanding of negotiations at the macro level, i.e the central negotiations This seems to be the case especially where, as in Norway, the state authorities play an active role in the negotiations, along with the unions and the employer's associations Although the main problems discussed in this article are related to the Norwegian wage formation, the arguments put forward are of a more general type They are assumed to be of importance in relation to the Situation in countries with an institutional structure similar to that in Norway concerning wage bargaining and wage policy