Sólveig Anna Jónsdóttir, chairperson of Efling trade union, has expressed her optimism that wage negotiations with SA, the Federation of Icelandic Employers, may be reaching an acceptable conclusion.
The most recent round of contract negotiations has been complicated by changes in ASÍ (The Confederation of Icelandic Labour) leadership and rising interest rates in the face of high inflation.
Normally negotiated for longer terms, a shorter-term contract has been suggested as a stopgap to help what has been a difficult negotiation process.
Rising Interest Rates Complicate Wage Negotiations
Efling has now agreed to make an offer to SA that will include an ISK 56,700 annual raise (USD EUR), in addition to other cost-of-living allowances. The contract as offered will be valid until January 31, 2024.
Cost of living has been a pressing issue in the recent renegotiations, and Efling’s current offer represents a much more humble demand than some of their previous suggestions.
However, a statement by the union highlights that the current offer represents what would have been the gains in the first year of a normal three-year contract:
“In the opinion of the negotiating committee of Efling, the agreed increases need to protect the households of low- and middle-income earners from the effects of inflation and guarantee them a fair share in economic growth and the profits of the company. […] The bargaining committee of Efling believes that other unions have made a mistake by agreeing to percentage increases in negotiations with SA. There have been proposals for discussion where high-income groups are expected to benefit twice as much as low-wage earners.”
Here, Efling refers to a debate within trade unions on whether to go to the bargaining table with demands for flat wage increases, or percentage-based wage increases. Percentage-based wage increases favour higher earners, and such demands have been a cornerstone of BHM’s demands (The Icelandic Confederation of University Graduates). However, for lower wage earners, flat increases to wage generally tend to increase buying power more directly.
Efling submitted their offer to SA yesterday. Previously, they had submitted similar terms, but SA rejected them on grounds of the length of the contract. Now, Efling is hoping that the new, shorter contract will be accepted.
In a statement, Sólveig Anna said: “We will see how this shapes up. I’m not ready to say that we’ve reached the finish line. I know it’s a complicated game we’re playing […] I think it’s likely that we need to do something more, but the message to us was clear and meaningful.”
