The younger generation of the Western world are expected to go into their adult life poorer than their parents were at the same age. Though, the youth of Norwegia is going against the grain in that aspect.
It America, and even countries like the UK, it is almost expected to have high debts at young ages due to university debts and increasing housing prices nationwide. Strongly affected by these factors are young adults who were born between the 1980’s and the early leg of the 2000’s. It is greatly expected that this will be the generation to grow up poorer than their parents.
Norway is popularly known for the Viking history and snow sports. But now, Norway is becoming known as the only major economy in Europe who’s young people are getting richer in comparison. Norwegians in their early thirties have an average annual disposable household income of around 460,000 kronor ($56,000).
Younger generation Norwegians are experiencing a 13% rise in disposable household income compared to Generation X (those born between 1966-1980) when the two groups were the same age. This data and more can be found on the Luxembourg database, the largest comparative death data set that exists. The data from this specific study was analysed by The Resolution Foundation.
On the other hand, United States millennials are experiencing a 5% dip. Other major countries are also experiencing dips, but none as high as Norway. The unemployment rate among 15-29 year olds in Norway is at 9.4% compared to OECD average of 13.9%. OECD is The Organisation for Economic Co-operation and Development which was created to stimulate economic progress and world trade. The 34 involved countries involved in OECD which are being compared in the above data are: Australia, Austria, Belgium, Canada, Chile,Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands,New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United States, and United Kingdom.
What is Norway doing that we aren’t?
Norwegians are living comfortably due to their country’s rapid economic growth. It now leads several global ranking for wealth and wellbeing since its biggest increase in average earnings between 1980-2013. Last year alone, Norway was at the top of the Legatum Prosperity Index list that involved 110 countries worldwide.
A huge contributor to the nation’s economic boom of the last three decades comes from their oil and gas sector. Contributing, of course, is falling energy prices. Not only is it important how much money Norway makes, but what they do with it in turn. This is explained by an economics professor based at BI Norwegian Business school in Oslo, Hilde Bjørnland. She says, “Norway has managed the oil [money] well in that it is saving, and using a portion of that to put back into society…So rather than a few getting a lot, many people have access to this wealth”.
They have done this by storing their money in the largest sovereign wealth fund in the world. This is essentially a giant savings account that makes money by investing. Currently, while investing in over 9,000 companies, it is worth over $1 trillion. Although, taxes are still kept high with a compressed wage structure. In result, minimum wage salaries are negotiated specifically by unions.
A report by The Resolution Foundation on general income shows that rising inequality has been a main factor in lowering disposable income for millennials in countries like the US and the UK.
Although Norway has some challenges, there is a lot that other countries can learn from them. Imitating or expanding upon solutions that Norway has found and implemented could just be the savior that millennials worldwide are looking for.