Iceland’s government ministers and top officials are set to receive a 6-6.3% raise from July 1, RÚV reports. Union leaders and opposition MPs have called for the salaries to be frozen to show solidarity with the public, who is facing a cost-of-living crisis. Prime Minister Katrín Jakobsdóttir says there are no plans to reduce or stop the pay hikes to ministers, which are laid out in legislation.
Food prices in Iceland have risen sharply over the past few months, as the Central Bank has raised interest rates on mortgages and loans, putting many households in a tight spot. Union leaders have called on the government to respond with measures to help low-income families whose finances are strapped.
In light of the approaching salary hikes, the President of Iceland’s Confederation of Labour (ASÍ) has called on the government’s top officials to show responsibility by not accepting higher raises than workers received in the newly-negotiated collective agreements. The highest wage hikes among workers this year amount to ISK 66,000 per month [$475, €442].
“I very much understand the discontent within society because of this,” stated opposition MP Þorhildur Sunna Ævarsdóttir, member of the Pirate Party. “Especially because the message from those in power in this country have time and time again been that the public needs to accept poorer conditions and bear the costs due to inflation.”
Cancelling raises would require an amendment bill
Speaker of Alþingi Birgir Ármannsson has stated that legislation would need to be amended in order to stop or reduce the salary hikes. With Parliament set to recess for summer vacation on June 9, Birgir says it would be possible to amend the law, but only if there were broad agreement on the issue. No amendment bill has been introduced at this time.
Prime Minister Katrín Jakobsdóttir has stated there are no plans to cancel or reduce the raises and called the current legislation on raises for government officials an improvement from the previous arrangement. “I think that the legislation we have, which is based on ideas developed in a working group under my leadership at that time, I think it’s a good system,” Katrín told RÚV. “This system is transparent and it guarantees that we do not lead salary development, but follow the salary development of government employees. And it’s completely predictable, too, which it was not with the old system with the old wage council.”
Those who are set to receive a raise on July 1 according to the current legislation are Iceland’s President, government ministers, ministry secretaries, judges, public prosecutors, police commissioners, the state mediator, the governor of the Central Bank of Iceland, and members of parliament.
According to the legislation, the current salary of Iceland’s President is ISK 2,985,000 [$21,450, €20,000] per month. Members of Parliament receive a monthly salary of ISK 1,101,194 [$7,910, €7,375]. As Prime Minister, Katrín Jakobsdóttir currently receives a monthly salary of ISK 2,021,825 [$14,530, €13,540]. Recent figures from Statistics Iceland stated that the median income in the lowest income quintile was ISK 343,000 per month [$2,460, €2,300].