Union Head Questions Why Top Gov’t Officials Get Percentage Pay Rises Beyond General Agreement

President of the Confederation of Icelandic Labour Unions (ASÍ) Drífa Snædal considers it strange that members of Parliament, government ministers, and the President are granted annual percentage-based salaries that go well beyond the same percentage granted to the Icelandic working class, RÚV reports.

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The salaries of these government officials, and others in top positions, were raised by 5% last Friday. This works out to MPs getting about an extra 60,000 ISK and government ministers getting about an extra 100,000 ISK, each month. Parliament typically votes in favour of these pay rises every year. Meanwhile, members of Iceland’s working class last received a raise in 2019, and at that time only for flat krónur amounts; not percentages.

Drífa says that this discrepancy has a real effect on the upcoming wage agreements, which are due to be negotiated on this November.

“It is naturally a very strange message to the people, who are being demanded to show some responsibility, moderation, and whatever else in the upcoming collective bargaining negotiations,” she told reporters. “[Government officials] do not need to enter into any negotiations or engage in any kind of actions [for their pay rises].”

Indeed, both the Central Bank and Icelandic business heads are urging the working class to “not ask for too much” when these negotiations come up, on the grounds that raising the pay of working people could push inflation higher.

However, as Drífa has previously pointed out, Iceland’s inflation is due not to rising wages, but rather to the overheating housing market.

“Let’s be clear that this trick is always used and this song about the unions and wage earners needing to shoulder responsibility is rather tired,” Drífa said late last month. “There hasn’t been wage-driven inflation in Iceland for years or decades.”