Confederation of Icelandic Enterprise Warns Against Companies Raising Prices

Halldór Benjamín

Halldór Benjamín Þorbergsson, head of the SA Confederation of Icelandic Enterprise, warns against businesses raising their prices in the wake of recent union deals in Iceland, RÚV reports.

Union leaders have been negotiating with the confederation over the last weeks and months in order to raise salaries of their members. But many companies have said that they in turn intend to raise their prices to deal with the added expenditure that comes with the new deals.

“It is no secret that the negotiated increases in salary will be tough on some companies, but that should test the possibility of businesses rearranging operations and searching for more advantageous ways to do business,” Halldór said in a post on the confederation’s website. “Everybody must contribute and be responsible. That goes for those with the highest salaries too,” he added.

A few companies have come out recently, saying that they are forced to raise the prices of their products in the wake of the new union deals. One such company, ÍSAM, caused outrage when they declared that they intend to raise their prices by 3.9% and the prices of imported goods by 1.9%

In his new post, Halldór talks about the recent deals, explaining how they center around a four-pronged solution: “Higher salaries, especially for those with low incomes, an increased flexibility to shorten the workweek, lower taxes and ways to create an atmosphere that is conducive to lowering taxes in Iceland, indefinitely.”

Majority of Icelanders Support Strikers

More than half of Icelanders support intended strikes by the unions Efling, VR, the Union of Akranes and the Union of Grindavík, Fréttablaðið reports. The unions have entered into discussions with SA Confederation of Icelandic Enterprise to raise pay among a certain group of their union members. Less than a third of Icelanders are against the strike.

These are the results of a survey conducted by Zenter research. The survey was made on the last day of February and the first day of March, with 1.441 people taking part. All individuals who answered Zenter’s questions were over 18 years of age and their answers were graded on the basis of age, gender and place of residence for the best representation of the nation’s attitudes towards the intended strike.

Union negotiations with the Confederation of Icelandic Enterprise, SA, have reportedly gotten nowhere. Late last week, Efling members who work in cleaning jobs voted on a one day strike, set for next Friday, March 8, with an overwhelming majority supporting the procedure. Reportedly not everyone agrees on whether the voting was legitimately handled or not, a dispute that will be handled by Iceland’s Labour Court. VR union is also planning on intermittent strikes this month, with a full-blown strike planned for the beginning of April should their demands not be be met by that time.

According to Zenter’s survey, about 56% of participants said they supported the union’s actions. About one in seven people was neither against nor for them and about a third was against them.

The strikes found the biggest support amongst those living in Reykjanes, or about 73% of inhabitants, closely followed by the populace of Northern and Eastern Iceland, where 60% support the intended actions of the unions.

Perhaps unsurprisingly, the head of SA Confederation of Icelandic Enterprise, Halldór Benjamín, downplayed the results of Zenter’s survey. “Considering how much wages have been discussed in the country recently, I’m a little surprised that there isn’t more support for the strikes than we are seeing there,” Halldór said, “especially since most people are expecting someone other than themselves to strike.”

“Strikes in a cooling economy, when capelin fishing is low and our airlines are having a tough time, is very risky business with a very unclear outcome,” Halldór warned.

Pay Raises of State-Owned Bank’s CEO Draw Criticism

Halldór Benjamín

Halldór Benjamín, director of the Confederation of Icelandic Enterprise, SA, is highly critical of the Landsbankinn bank council’s decision to raise the pay of its chief executive officer Lilja Björk Einarsdóttir twice in one year, Fréttablaðið reports. He accuses the council of being tone-deaf.

The CEO of Landsbankinn bank, Lilja Björk Einarsdóttir, received a pay raise of 1.2 million ISK in July 2017 and then another increase of 550 thousand ISK in early 2018, making her total salary 3.800.000 ISK a month.

The pay raise is now being questioned by union leaders and the public, after Már Guðmundsson, governor of the Central Bank of Iceland, warned against excessive pay raises in a recent video, saying they would inevitably lead to increased interest rates and unemployment in the country. Már’s remarks have caused debate and now Lilja Björk’s pay raises are being questioned.

“The news of her pay raises are bad,” Halldór says. “The fact that this is happening in a state-owned bank, going against the will of its owner makes it both an unwise and indefensible decision, in my opinion. This rate of pay raise does in no way represent norms in the job market. Luckily, this kind of behaviour is an exception amongst the largest companies in Iceland. That, however, doesn’t lessen its seriousness or the lack of judgement that is revealed by this decision.”

Katrín Jakobsdóttir, Iceland’s Prime Minister has also chimed in, calling the the pay raises “incomprehensible”.

“This doesn’t affect the leeway of companies in the open market, of course,” Halldór adds. “Most companies in Iceland are small or medium sized, and the economy is now slowing down. The economic upswing is over, and pay agreements must take that into consideration. We at SA have in recent years recommended that pay raises of CEOs are in harmony with other raises.”