Iceland’s legal minimum wage declined greatly since the 2008 bank collapse, yet still remains in Europe’s top tier of wages, in addition to surpassing the United States’ minimum wage.
Labor issues such as minimum wage are decided by a yearly meeting between the government, the Icelandic Confederacy of Labour Unions (ASÍ) and the Confederation of Icelandic Employers (SA), which results in a binding contract.
Due to drastic measures which needed to be taken after the bank collapse, a report from ASÍ shows, Iceland’s minimum wage declined from about 1,500 euros per month before the collapse, to less than 1,100 euros per month today.
However, this figure still keeps Iceland in the top tier of minimum wages in Europe, which is led by Luxembourg, at 1,758 euros per month. Iceland remains in the upper crust of Purchasing Power Parity (PPP) – defined as countries with a monthly minimum wage of 1,000 euros or more – making a stronger showing than the US.
In September 2008, Iceland was second only to Luxembourg in terms of PPP. However, if the data is pulled back to 2007, when the Icelandic crown was particularly overpowered, Iceland was the European leader.
The report is released at a time when the government is currently in negotiations with labour and management, and wage issues have been a heated matter of contention.
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