Wage Negotiations Between FAG and Workers’ Unions 2024

The 2024 wage negotiations between FAG and the workers' unions are struggling to reach a solution both sides can agree on. Why is this?

In a broadcast on KVF, we heard Niels Winther, director of the Faroese Employers’ Association, mention that the unions' demands would cost employers around DKK 700,000,000 – 800,000,000. Meanwhile, Sonja Jógvansdóttir, representing the unions, stated their demand was for an increase of DKK 10 per hour each year over two years, totaling DKK 20 over two years.

Based on a work year of 40 hours per week across 52 weeks, this amounts to 2,080 hours. Thus, a DKK 20 increase over two years would cost employers an additional DKK 41,600 per employee per year. With a wage increase costing DKK 41,600 extra per employee, Niels Winther’s estimate of DKK 700,000,000 – 800,000,000 would imply he is calculating for 750,000,000 divided by 41,600 = approximately 18,029 employees.

This figure doesn’t align, as Sonja Jógvansdóttir has stated that the unions are negotiating for their members, totaling around 5,000 employees. This creates a discrepancy of about 13,290 employees.

The additional cost for 5,000 employees, with a total increase of DKK 20 over two years, is 5,000 employees x DKK 20 x 2,080 hours = DKK 208,000,000, which is DKK 542,000,000 less than what Niels Winther mentioned on KVF. Where does Niels Winther find these additional 13,290 employees that the unions do not recognize?

Alternatively, if the unions were negotiating on behalf of their 5,000 members for a total cost of DKK 750,000,000, this would equate to DKK 150,000 per member per year, or roughly DKK 72 per hour. Clearly, there are discrepancies in these figures.

What we know with reasonable certainty is that the unions represent about 5,000 members.

Sonja Jógvansdóttir has stated that the unions are pushing for an increase of DKK 10 each year, totaling DKK 20 over two years in hourly wages.

This results in an additional cost of DKK 208,000,000 for employers. When wages increase, naturally, contributions to pensions and other social fees will also rise slightly.

I kindly urge the negotiating parties not to cloud the discussions by presenting misleading information to those of us outside the negotiations.

I wish all the best to those involved in these wage negotiations. Hopefully, you will reach an agreement soon.

Samverk