The Sun is Setting on Big Healthcare and Big Education--in Norway, of all places: buckle up!

In Norway, the number of applicants in healthcare is rapidly shrinking, spelling big trouble for higher education, healthcare services, domestic politics, and economic development

Not long ago, a tertiary degree was a one-way ticket to a better life: sure, one had to defer a couple of things, such as entering one’s first full-time job, starting a family, buying a house, etc., but still, college credentials used to be something useful, for both any individual as well as society at-large.

It would appear that the western love affair with ever more (and ever pricier) education is coming to an end, though. Those who paid attention already saw the cracks in the system, in particular if one was watching esp. US academia with its many travesties, ranging from sky-high tuition fees (that cannot be discharged via individual bankruptcy) to the questionable business plans (ahem) of many private liberal arts colleges to the inexorable rise of adjunct temporary faculty. Note that these problems predate the emergence of ‘wokery’, which in many ways did work like an accelerant anyways.

And then—Sars-Cov-2 and Covid-19 ‘happened’, adding further fuel to the already-burning dumpster fire masquerading as higher education.

It would appear that Covid-19 (the-social-phenomenon) has finally revealed these structural flaws for everyone to see. While in my field, the humanities, we’ve been through an almost complete dismantling of all, really any, entry requirements in the past decades, what we’re seeing now is really without precedent.

-12% Student Applications in Norway

Here in Norway, according to the most recent data, there was a 12% decline: 134,954 applications were received in 2022, almost 19K fever than last year. True, 2021 set a record of 154,088 applications, but that isn’t a very telling baseline, according to Research and Higher Education Minister Ola Borten Moe:

Overall, the figures are back to a more normal level, and there is an expected decline. During the pandemic, it was not so easy to take a ‘gap year’ or travel. When we also take into account that the youth cohorts are now smaller, the total number of applicants is about the same as before Corona.

There’s a lot to unpack here and there, but I find it telling, in and of itself, that Business Administration is the most popular curriculum. At the same time, though, as remote education continues to grow by leaps and bounds, Norway is facing a crisis in kindergarten, primary, and secondary education:

‘I am very happy that more than last year will be teachers for children in grades 1-7, but I would like to see even better application numbers’, says Borten Moe. This chimes with the data: only three higher education institutions have seen their applications grow this year, with virtually all but a handful of colleges and universities experiencing double-digit declines.

The Looming Crash of Big Healthcare

The above data was first publicised three weeks ago, and while I’ve been sitting on it, here’s the kicker: it’s even worse than the above segment informs you.

There was a -23% decline of nursing school applications in 2021/22, which came after a comparatively minor decline of 1.6% last year (when, remember the above, Norway experienced record numbers of applicants). In other words: as a consequence of Covid-19, I’d argue, the healthcare sector is entering a veritable crisis moment.

More and more, people are realising that, whatever their efforts, nursing is a thankless field, with little hope for a better future, and certainly not an attractive career opportunity.

Still, it’s not as if 2022 is entirely without precedent, argued Julia Loge in Forskerforum, the outlet of the largest Norwegian academics’ union—on 27 April 2022: it’s about as bad as 2013.

Why?

‘In the beginning of the pandemic, many people perhaps thought that choosing nursing was safe and that they were doing an important job. Now, there are probably many more who have experienced the poor pay and working conditions of the nurses’, says the Nurses’ Association’s student leader, Edel Marlèn Taraldsen. (my emphasis)

As to the consequences, well, there’s an overall decline of applications in virtually all healthcare subjects, with the exception of medicine and nutritional.

How bad are things?

Many locations are witnessing a decline of 30% or more in terms of the number of applications, with dedicated institutions such as the one in Sandvika and Hammerfest seeing declines of 50-60%.

How much worse will things get?

Well, this is a tough one, and I find myself in agreement with Oslo Metropolitan University’s vice rector for education, Nina Waaler, who confirmed that it’s a bit too soon to tell if this is a one-off (which I don’t think, as the accompanying graph suggests).

Here’s Ms. Waaler on this, and I sense that she might also agree that this is an enduring problem. See if you can spot her desperate bent:

One of the most important things we can do is to keep the nurses who have completed their training…Through the media, it has emerged that many nurses have been in tough situations through the pandemic. This may have contributed to the applicants becoming more uncertain about the choice of this education (my emphasis).

Here’s how these people like you think about this: it’s all the fault of Sars-Cov-2 and Covid-19, and this entire mess has nothing to do with government policy in these regards. Add to that the notion that labour immigration is one of the hot-button issues in all of the ‘advanced’ countries: desperately needed but feeding ‘right-wing’ resentment at the same time.

Here’s the government’s own Corona Commission, tasked with identifying the lessons learned during these past two years, wrote about it:

Since 2004, many have come from EU countries in Eastern and Central Europe. The health and care services are among the sectors that have a significant share of foreign labour. Labour immigration has made a large positive contribution to the Norwegian economy. In an international crisis with sharply reduced cross-border mobility, this is of course an obvious vulnerability. Dependency on foreign labourers to keep key services running renders countries vulnerable in a global pandemic. (source here, p. 446; my emphases)

(For my own four-part take-down of the report and how badly legacy media represented it, see here; all other parts are linked there at the top.)

Many healthcare workers—not ‘only’ nursing staff—are foreigners who came to Norway at some point in time before 2020.

The past 2+ years haven’t been very kind: sure, there’s been a couple of standing ovations back in the days of spring 2020, but working conditions haven’t improved, and one of the clearest indicators is compensation: last year (2021), the government proposed an across-the-board pay raise of 1.7% in the public sector, which was less than half the average official CPI increase of 3.48%.

It’s (much) worse this year already, with the April numbers coming in at 5.4%, compared to last year, according to Statistics Norway. Yes, there’s talk about ‘higher’ wage increases this year, but let’s face it: with inflation (CPI) in the EU officially expected to come in around 7% this year, anything below an 8% wage increase (which ain’t gonna happen), will result in a pay-cut. And this will be intentional, as the government’s own number-crunchers know that very well.

Finally, here’s something else I didn’t know about Norway—that is, until it affected me, too: it’s legal here for landlords to increase the rent based on the official CPI. So, if you’re renting a place, and if you think that you’ve got a contract that stipulates your monthly rent, think again. I moved here in summer 2020, and due to this ‘hedonic adjustment’ being illegal in the first year of any lease, our rent only went up by approx. 4% this January 2022 (we’re moving out at the end of June, much to the ‘sadness’ of the landlord.)

Now, imagine you’re someone who’s elected a career in nursing, which pays an average salary of 459,000 Norwegian Crowns (NOK) before taxes, according to internet sources. (As to the conversion rate, divide the amount of NOK by approx. 10 to arrive at US$ or € equivalents.)

About half the nurses earn less than 495,000 NOK a year before taxes, which would be in the range of approx. 122,000 NOK, or some 25% (ballpark estimate without any deductions). Sure, working hours are o.k., and a tax rate that low compared to other ‘advanced’ economies isn’t that bad either. Yet, if you’d factor in these above issues, esp. the ‘rent adjustment’ and inflation, you can see how ‘unhappy’ many healthcare workers are, esp. those at the lower rungs of the income distribution, like, you know, nurses.

For another dose of cognitive dissonance, we turn again to Ms. Waaler (my emphases):

We must take this decline seriously. Right away, we must join forces with the authorities [myndighetene] and the practitioners to look what can be done to ensure recruitment to the nursing profession in the future…we know that one of the most important things we can do is keep the nurses who have completed their education. This concerns both working conditions, opportunities for competence and career development, and larger job shares. We therefore look forward to the Health Personnel Commission’s report in 2023, where several of these issues will be addressed.

They knew about this for a long time. The Corona Committee just told them again. And, apologies (not) to Ms. Waaler and her ilk, welcoming another report next year won’t do anything about this.

Ill.: Number of Applicants who Ranked Healthcare as their First Choice; the pink line provides the ‘planned study places’ vs. the blue line, which gives the number of applicants who ranked healthcare as their first choice.

Still, as the above trend lines indicate, there are still more applicants than spots offered, which also indicates that we won’t know how many applicants are qualified, receive an offer of training, and actually show up. We’ll learn by October, and perhaps by then, we’ll all have different worries…

Higher Education and Healthcare are in Big Trouble

In a sane world, there’s two main things that could be done immediately to address the looming shortage of healthcare staff: raise the salaries to make the field more competitive and/or improve working conditions.

It’s a fair bet that neither will be done to actually ‘resolve’ this issue, i.e., turning the trend lines around.

Sure, the offshore oil and gas industry is a particular feature of the Norwegian labour market, which attracts a lot of qualified personnel, if ‘only’ for drastically higher salaries (which start at US$ 68K per year, on average are around US$ 90K per year, both before taxes, but then again, there’s special tax brackets for those working ‘on the continental shelf’).

That said, working conditions are still very favourable compared to, well, the Global South, as this testimonial by a Filipino nurse shows (from 2020). Note that in this piece, a nurse is mentioned earning 348,700 NOK before taxes per year, which is even lower than the example related above. It might be o.k. if you’re here alone and funnel a sizable chunk of your salary back home, but how long will one be able to do so, and at what price?

Demand by all providers was high before Covid-19, and now with additional constraints, such as wear, exhaustion, bad deals in terms of salaries and working conditions on top of limits on labour mobility, the future doesn’t look so bright.

Then, there are the larger implications: if an education system doesn’t convey enough incentives to applicants—and keep in mind that applicants will be allocated according to their ranked choices, then they will be assessed in terms of suitability, and only thereafter will they receive a (conditional) offer of college admission. Applicants may do something else at every step of the way, hence, and discounting future dropouts, it’s fair to assume that while we’ll be able to fill the nursing training positions for a few more years due to an excess of applicants vs. training spots, this situation will get worse before too long. Once finished with their training, working conditions are less than appealing, to put it mildly.

What, then, are the implications and likely consequences of these developments, one may ask justifiably?

Well, I think the following main points are discernible:

In the short run, the government will have to invest massively in working conditions and salaries, yet, citing ‘budgetary constraints’ (or whatever), these will in all likelihood fall short of actually resolving the problem, e.g., by offering wage increases just shy of inflation numbers etc.

In the medium term, less applicants will lead to the failure of New Public Management (it’s already dead, but that rotting cadaver has a lot of momentum): I work in academia, and the way our universities etc. are funded is a combination of basic funding for operating expenditures + ‘premiums’ per graduated student. Hence, entry-level qualifications for ‘essential’ personnel (read: nursing) will be dropped even further while grade inflation will be extremely hard to avoid, as the government and the leadership at the university and department level will be hard-pressed to ‘find a solution’ to the looming crisis. In other words, they are incentivised to ramp up production of graduates, nevermind the fact that it’s already a problem to make nursing attractive to graduates.

At the same time, collateral damages will accumulate: higher student enrolment means an ever-worsening relation between academic staff and students (don’t believe for a minute that staff levels will increase in lockstep with gov’t demand for graduates), downward pressure on wages due to a higher number of applicants, and increasing troubles for the entire state-run healthcare sector.

I opened this piece with a strong statement, and this is how these education problems will spill over into the healthcare sector: with universities and colleges destined to fail to ‘increase’ production of qualified and willing graduates (which, let’s face it, isn’t their fault but the government’s), both sectors will become increasingly wobbly, in turn reinforcing each other’s decline.

There’s no way government action can actually remedy anything, for the only thing government of both ‘leftish’ and ‘rightish’ persuasion, can think of, is more regulation = interference. And this means an ever-decreasing relationship between ‘supply’ (nursing staff) and ‘demand’ (staff shortages). The ‘left’ will simply call for more state interference in labour markets while the right will simply blow up the ‘private’ bureaucracy masquerading as big business or ‘public-private partnerships’ in this. The result will be the same: the labour market, which is already quite dysfunctional, will get worse and worse as left- and right-leaning governments take turns pretending to ‘fix this issue’.

In terms of politics, I think it’s helpful to differentiate between foreign and domestic fall-out.

As regards the former, the term ‘beggar-thy-neighbour’ quite literally applies, for as long as Norway is able to promise ‘better conditions’ (relative to other places), we’ll continue to import qualified labour whose training was paid for by someone else’s taxes (I know lot about this from personal experience, for my entire career rests on education paid for by Austrian taxpayers—and I haven’t lived and paid taxes there since 2010…). At the same time, importing staff from abroad will place even more pressure on both domestic working conditions and the political environment, to which we now turn.

Speaking of domestic consequences, all the factors outlined above (decreasing number of applicants, quality of training, and salaries) will translate, politically speaking, into rising anti-immigrant sentiments. While this alone translates into the emergence, and continued rise, of what is (wrongly, in my opinion) labelled ‘right-wing extremism’, we can see the harbinger of things to come in, e.g., Denmark: now governed again by Social Democrats (ahem), whose current incumbent, Mette Frederiksen, was shunned by many fellow Social Democrats and members of EUrope’s juste milieu because she ran on a strong anti-immigration platform (which is, quite likely, one of, if not the, explanation for her electoral success).

Economically, I think it’s fair to assume that neither somewhat higher wages nor other incentives will be done in sufficient ways to solve the problems affecting both higher education and big healthcare.

Instead, successive governments—and their hordes of advisors and consultants—will in all likelihood press for ‘more reforms’, pulling in ever more different directions. Thus, both sectors will continue to wobble more and more over time, with successive government measures all destined to fail for one or the other reasons.

Also, don’t think for a moment that these problems are limited to Norway: Jessica Rose pointed to a lack of paramedics in Alberta, Canada. My contacts in the Vienna General Hospital are informing me that there’s an equally dramatic lack of applicants (there were no applications for permanent positions by those healthcare workers that were trained there in the previous two or three years). I suppose that it’s the same all over the ‘developed’ world, eh?

What then, will be most likely done to us by the powers that be?

Running into a set of actually quite comparable troubles, the Roman Empire in the 3rd Century AD first decreed maximum prices for what we may arguably call ‘goods and services’ before moving on to rendering professions hereditary.

We’re already experiencing variations of these measures, as exemplified by collective bargaining procedures as well as certain limitations on job choice, such as residency contracts and the like. Apart from these ‘extra-economic’ constraints, economically and socially, essentially comparable pressures and limitations—academic potential is highly correlated with parental achievement—are currently serving as ‘(in)visible’ guardrails.

I suspect that more and more of these measures will be implemented over the next couple of years, putting more pressure, from ever more angles, on the possibilities and freedoms of any given individual.

Oh, lest I forget: ‘Happy May 17’, Norway.