Price increases and high interest rates meant that wage increases did not increase the purchasing power of households in Iceland last year. On the contrary, the purchasing power of disposable income decreased the previous year.
This is one of the findings in the Wage Statistics Committee 2024 spring report, published last week. The report states that the decline in purchasing power last year was, however, insignificant from 2022.
The report discusses, among other things, wage trends in what is referred to as the recent collective agreements cycle, that is, the period from November 2022 to January 2024, as well as other aspects relating to collective agreements, the labor market, and the economy.
During that period, basic wages in the labor market increased by an average of 11.1%. At the same time, the general price level according to the consumer price index rose by 8.3%. Therefore, the purchasing power of basic hourly wages increased by 2.6% in the collective bargaining cycle. The purchasing power of basic hourly wages increased the most for those working for municipalities other than the City of Reykjavík, by 3.1%. It increased by 2.7% in the general market and by 1.9-2% in the state and the City of Reykjavík.