Low Wage Earners Lose Least Purchasing Power Skip to content

Low Wage Earners Lose Least Purchasing Power

The purchasing power of the lowest-earning households in the country lost 6.6 percent of their purchasing power after taxes between 2008 and 2009 while the highest-earning households lost 28.2 percent of their purchasing power.

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Copyright: Icelandic Photo Agency.

The purchasing power of the lowest-earning households is now similar to what it was in 2006-2007, while the purchasing power among those who earn more hasn’t been as low in six years, Fréttabladid reports.

“This shows that the government’s actions which were supposed to soften the impact of the crisis on the groups who earn the least have worked out. They were spared from the impact of tax increases,” commented Stefán Ólafsson, a professor of social sciences and director of the University of Iceland Social Research Center, which covers the issue in its latest newsletter.

Meanwhile, more than 1,100 applications on debt adjustment and consultancy are being processed by the ombudsman of debtors, a number which has nearly doubled in a short period of time.

Svanborg Sigmarsdóttir, information officer at the ombudsman of debtors, told ruv.is that the increase has an obvious explanation.

The law on payment adjustment was changed in mid-October so that it now takes effect as soon as an application has been received, which has increased the office’s workload in the past weeks, Sigmarsdóttir reasoned.

When asked what message she has for indebted homeowners, Prime Minister Jóhanna Sigurdardóttir told Morgunbladid that a solution is pending.

“A report from the committee [working on this matter] will probably be submitted on Monday and thereafter we will call for another meeting at the Culture House with everyone who participated in this issue three weeks ago in attendance,” the PM said.

Click here to read more about indebted households.

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