Icelandic companies will not be able to compete with those in neighboring countries if wages continue to increase, stated Ásgeir Jónsson, associate professor of economics at the University of Iceland, in an interview with RÚV.
“Companies in Iceland naturally have to compete with companies in other countries, they need to be competitive in terms of wages and costs and other things. We have gone very high. If we are going to continue down this road of raising our wages much faster and more than other countries around us that won’t go on forever. At some point our companies won’t be competitive and that has already begun. On the scale which is generally used for this, that is to say calculating the real wage growth rate, we have gotten very high. And not far from 2007 or far from the heights we reached before,” said Ásgeir.
Listen to the interview in Icelandic here.