Statistics Iceland has published statistics regarding changes in wages in the private sector since last year from before the collective agreements (December 2018) and to May of 2019, that is after the first wage increase of the so-called quality of life agreement have taken effect (see: the diagram at the bottom).
The greatest increase is for the groups with the lowest wages (5,2% to 5,5%) and then diminishes as one examines groups with higher incomes. The wage increase is the lowest among experts and administrators (1,5% to 2%).
Wage increases, according to the new collective agreements come in fixed amounts of kronas and are higher for those who are paid according to wage rates. This means that a proportional increase and a general increase in purchasing power is the highest for those with the lowest income.
Many other things in the agreements benefit the lowest income earners the most, for instance tax cuts which take effect next January and in January of 2021. The same applies to the increase of child allowances and housing support, for instance in the form of capital contributions and anticipated new loan arrangements, which have yet to be fully outlined.
“Historically, it has proven quite difficult to provide the lowest paid groups with the greatest wage increases. The experience with the new agreements points to the possibility of greater success now than before. We here at Efling are bound to see that as something to celebrate,” says Sólveig Anna Jónsdóttir, the chairman of Efling, but adds that agreements have not been reached on behalf of public sector workers and therefore the effects of the new agreements have yet to fully hit the labor market.
“It is shameful that the municipal authorities of Reykjavík don’t make a greater effort to conclude negotiations with Efling, thus demonstrating their willingness to provide the lowest paid female workers of the municipality with a decent wage. Our approach to wage negotiations has been successful but our aims of achieving equality have not been reached. This is only the first step, a cease-fire agreement, and we will continue to fight for equality and better wages.”