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Minimum Salary Lower than Unemployment Benefits

By Iceland Review

The minimum monthly salary in Iceland is lower than monthly unemployment benefits, approximately ISK 130,000 and 150,000 (USD 1,200 and 1,300, EUR 920 and 1,000), respectively, which will remain unchanged unless a contracted pay raise, which was supposed to take effect on March 1, is realized.

President of ASÍ Gylfi Arnbjörnsson. Copyright: Icelandic Photo Agency.

The planned ISK 13,500 (USD 117, EUR 92) per month increase in salary for those who earn the least, which wouldn’t even have sufficed to bridge the gap between the minimum salary and the unemployment benefits, is now likely to be postponed, Fréttabladid reports.

President of the Confederation of Labor (ASÍ) Gylfi Arnbjörnsson said a “vast majority” within ASÍ agrees that “the reviewing of wage contracts should be postponed […] until June,” pointing out that it is important to review the matter with the new government that will be in power after the elections scheduled for April 25.

Vilhjálmur Egilsson, managing director of the Confederation of Employers (SA), said, “It is no big deal for the market as a whole” to bridge the gap between the minimum wage and unemployment benefits, but that, “We have to think about how it fits in with everything else.”

Minister of Finance Steingrímur J. Sigfússon said he understands and respects Arnbjörnsson’s decision; it is difficult to make new wage contracts under the current circumstances and that it is understandable that the labor movement wants to wait with such contracts until there is a “future government.”

Click here to read about the last wage contracts that were made.

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