The Union Alliance and the Confederation of Employers (SA) will have a negotiation meeting with the state mediator at 2:00 pm today. It is the first meeting to take place since the wage dispute was referred to the state mediator a week ago, on January 24. Sólveig Anna Jónsdóttir, chairman of Efling, deplores how much uncertainty has been created about the collective bargaining negotiations. The Union Alliance’s demands are moderate, fair and accessible to both employers and the state. Collective agreements could have been concluded quickly and safely on their basis.
The Union Alliance, an alliance of the largest national confederations and labor unions on the general labor market, issued a statement last week when the dispute was referred to the state mediator. It stated that after several meetings it had become clear that SA had no intention of agreeing to the Alliance’s moderate approach. It was lamented that SA did not seize the opportunity offered to conclude long-term contracts aimed at bringing down inflation and interest rates. Furthermore, the proposition would result in significantly lower costs for employers as per usual in collective agreements.
Everybody will benefit
The current situation is disappointing in light of the optimism at the beginning of the year. On January 9, Sólveig Anna said that she was optimistic that it would be possible to make historic collective agreements, to the benefit of all workers. At the Union Alliance’s first negotiation meeting with SA between Christmas and New Year, a positive tone was struck and from SA’s statements, a lot pointed to the organization supporting the Union Alliance proposals.
In short, the proposals demand that the public redistribution systems, child benefit, interest benefit, and housing benefit systems, will be restored. Higher payments from those systems can to a considerable extent replace wage increases, not least because those payments are tax-free. On top of that moderate flat wage increases would be agreed on in long-term contracts. This would create conditions for inflation to subside quickly and interest rates to fall. It would benefit all workers.
Stefán Ólafsson, professor emeritus at the University of Iceland and expert at Efling, has demonstrated that by restoring the redistributing systems it will be possible to provide low-wage workers, and up to middle-income groups, with tax-free benefits worth between 30 and 50 thousand ISK per month. On top of that, there would then be modest, flat wage increases. People with an income of 500 thousand krónur or less per month could then expect an increase equivalent to around 60 thousand krónur monthly. Most of that amount, about 40 thousand krónur, would come from the redistribution systems.
Great opportunities
Sólveig Anna has stated that there had been positive conversations with the government about their involvement. However, ministers of Sjálfstæðisflokkur began in the second half of January to argue that due to the anticipated costs of the treasury due to the natural disaster in Grindavík, there was no room to meet the demands of the Union Alliance. However, such arguments have not been heard from ministers of other parties in the government, and Guðmundur Ingi Guðbrandsson, Minister of Social Affairs and Labor Market, has spoken on a different note.
“I believe that both Vinstri græn and Framsókn see that there are great opportunities in concluding a good agreement with the labor movement. I believe that in the end, Sjálfstæðisflokkurinn will stop this ideological struggle, get down to earth, and work together with everyone here to conclude a good collective agreement,” Sólveig Anna said in an interview with the Red Table at Samstöðin recently.
Stefán Ólafsson has also pointed out that the government is well equipped to handle the crisis in Grindavík, using money from the Natural Disaster Insurance Fund and back insurance, et al. The treasury will furthermore save much more in expenses than the increase in the redistribution systems if collective agreements are made that will contribute to the reduction of inflation and interest rates quickly.
The demands are very accessible
Unfortunately, because of SA’s changed stance, the Union Alliance saw no other option than to refer the wage dispute to the state mediator, as mentioned earlier. Sólveig Anna said in the aforementioned interview at Samstöðin that she didn’t think the reason had anything to do with the situation in Grindavík, but rather that the positivity that was signaled in the beginning was not fully supported by the backbone of SA.
The parties will meet with the state mediator today. Sólveig Anna says she can’t predict the outcome of the. “It is unfortunate how much uncertainty has been created in the last days and weeks about. I would have liked to see negotiations continue based on the Union Alliance demands, as those demands are very accessible to both SA and the government. It would have been possible to conclude agreements quickly and safely on that basis. Now we have to see how things develop. I will put a lot of emphasis on keeping members of Efling informed about the progress of the negotiations.”