Awash in Wealth, Norway Sees Its Labor Supply Dry Up

The land of plenty is worrying about a shortage.

Wages are so high in wealthy Norway that the country can’t find enough people to fill the low-paying jobs that are the backbone of its generous welfare state.

The answer, some people say, is to import foreigners to do the work. But that touches a nerve in a country accustomed to isolation on Europe’s northern fringe.

Norway’s worry is an ironic contrast to neighboring Sweden, which is trying to find enough money to keep its equally comprehensive welfare state from floundering. Money’s not a problem in Norway, the world’s second-largest oil exporter; the government salts away billions in oil revenue every year in an escrow account.

“In most countries there has been a lot of debate about how to maintain the pay-as-you-go welfare system as the population ages. We have oil and other income, so we don’t see that as a giant problem,” said Aadne Cappelen, research director at the state agency Statistics Norway. “With us, the problem is people.”

During the 1990s, Norwegian politicians were embarrassed by the thousands of people waiting for health and elderly care, so they voted to heavily increase health-sector spending.

Since 1990 the number of physicians at public hospitals has soared 36%, according to the Ministry of Health and Social Affairs.

But with a shortage of nurses and unskilled hospital aides, specialists often end up pushing trolleys and filing paperwork, cutting into their time with patients, said Erling Steen, an official at the health and social affairs ministry.

“The demand [for nurses and other staff] is so great because there are so many new jobs, but recruitment is very dependent on the job market,” he said, noting that worker shortages are worst at retirement homes.

Norway has such low unemployment, 2.9% in August, that most Norwegians can pick and choose among jobs. Few pick low-status, unskilled labor in health and elderly institutions, where the demand for care is growing.

Cappelen said one option would be for Norway to send citizens abroad for treatment or care. Another would be to increase wages to make jobs in institutions more attractive.

Or Norway could bring in guest workers, he said, an idea that is strongly opposed on both the political left and right.

Only 5.5% of Norway’s population is of foreign origin, and most of those are from northern Europe. Norway stopped free immigration in 1975, except from the Nordic countries and some other European states.

“Changing the immigration policy to meet short-term labor needs is not the solution,” said Carl I. Hagen, leader of the right-wing Party of Progress, which wants strict limits on immigration.

Outsiders, mainly Swedes, Danes and Germans, are already filling key medical jobs, often on a temporary basis.

“We are awfully dependent on them,” said Steen at the health ministry.

He said 15% to 20% of Norway’s doctors are foreigners and Sweden alone provides thousands of nurses. Immigrants, often former refugees, are the backbone of unskilled labor at many institutions, he said.

Demand for health workers is expected to keep growing, even as Norway has fewer young people looking for work due to a low birth rate in the 1980s.

Local and regional governments, which are responsible for most health and retirement services, say they will need 85,000 new workers over the next decade, many for the health sector. That would be an impossible 80% of Norwegians expected to enter the work force during that period.

Cappelen said Norway must consider a mixture of measures, such as immigration, purchasing services abroad and encouraging older Norwegians to keep working.

He also suggested the government could use its taxing power to change employment patterns.

“You see young people happily working in cafes. But they don’t want to work with old people and serve them. Maybe that isn’t cool,” Cappelen said. “But if we cut purchasing power through taxes, fewer people would eat out. That would mean fewer cafes and more people available to serve the elderly.”