From Iceland — Super Salaries for the Fortunate Few

Super Salaries for the Fortunate Few

Published August 11, 2006

Super Salaries for the Fortunate Few

The local tax lists are public in Iceland, and it has become an annual ritual in the country to closely examine the publication of the estimated wages of 2,400 wealthy Icelanders as put together by the business magazine Frjáls Verslun (Free Enterprise).
Of course, this year, already two of the tabloids found a hook that has grabbed the local imagination. “The biggest wage differential in Iceland’s history,” DV stated. “The celebrities’ earnings,” and “Magnificent millionaires” is a fraction of headlines in Séð og Heyrt. Both papers used up a lot of space to write about known Icelanders and their monthly salaries. Actors, athletes, persons in authority, musicians and media personalities were put into numbers, 431,000, 171,000, 1,145,000 or 22,500,000 ISK.
As absurd as it is to look at smiling celebs with all sorts of numbers printed on their chests, and as sad a fact it is that we are even interested to know what each makes in a month, DV has a point. Even though many of the numbers listed in Frjáls Verslun aren’t necessarily 100 percent correct, the wage gap in Iceland has become surreal, which has truly stirred things up in common discussions.
Some directors and bank presidents now earn around ten to twenty million a month while common citizens with low-wage jobs earn 100,000 ISK or less. This is not to mention sky-high termination agreements the public has been witnessing repeatedly. We are not talking about just high incomes anymore. We are talking about super incomes a fortunate few who are sitting on the top of the iceberg enjoy every month.
Various politicians and trade union spokesmen have been critical of the super salaries escalation. Short-term thinking and greed are considered the main factors behind companies’ personnel and compensation decisions, which hurts the general employee as well as society in the long run. Some find it “an unfortunate development for our small society,” others want to spread the prosperity to a larger group than just a small handful of upper-class elites. The news has even spawned opinions that the current government should step down so it will be possible to counteract the situation. Reviving the recently repealed supertax – an extra four percent tax for any earnings over 4.2 million ISK a year, which classify the earner as extremely wealthy – has also been mentioned. Whether there is a solution in all of this remains to be seen, but it has become clear that the gap between the rich and poor in this country is far from narrowing, a fact that can’t be ignored anymore.
Össur Skarphéðinsson states on his webpage that it takes those who earn the smallest salaries almost 20 years to earn as much as society’s highest paid members earn in a month.
Competitive people are of course good for the country. The fact that Icelanders are doing well in business and investments at home and abroad is delightful news, encouraging economic growth. Still, this is all rather unreal and untenable when it is considered normal for a bank president to earn 100 times as much as the bank teller.
Whatever the reason for these super salaries, I at least don’t understand it anymore, and neither do those taking part in heated discussions at coffeehouses and workplaces. Inequality in Iceland increases every year. The economic gap continues to grow between the public and a small but very wealthy elite. People fear that developments of this sort actuate public envy, greed and rage as the masses read about directors earning monthly salaries that they can’t even dream of in their whole life. Class division is more obvious now than ever; therefore, it is important to stop this increasing inequality if we aren’t going to create even more obvious division and a harsher dialogue in our society in the next few years.

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