Women Doctors Uncover Gender Pay Gap at Children’s Hospital

Landspítali national hospital

Three paediatricians at Landspítali, The National University Hospital of Iceland, uncovered a gender pay gap at the children’s wing, Vísir reports. The women’s pay has since been adjusted accordingly and they’ve been given back pay to correct the injustice.

The three paediatricians, all women, started investigating salaries in the wake of the Women’s Strike last October. They utilised a clause in legislation that allowed them to access the salaries of all specialist doctors at the children’s and women’s wing and discovered that the men received higher pay, irrespective of qualifications.

Women’s experience not valued

According to collective bargaining agreements, doctor pay is mostly determined by education and the length of their careers. In addition, administrators can make a subjective choice on additional pay, taking into account factors such as subspecialties, administrative experience, and research and teaching history. A memo on how these factors should be evaluated was published in 2016, but was not used when the women were hired that same year.

A small gap remains

The women published an article in The Icelandic Medical Journal exposing the pay gap after appealing to a public committee on equality. Hospital administrators corrected their pay accordingly. Furthermore, the hospital looked into the wage setting of all specialist doctors at the hospital and found a 1.4% bias towards men. The hospital has had an equal pay certification since 2020 and a goal of keeping the gender pay gap under 2.5% at any time.

“I will never again believe that wage setting is fair,” said one of the doctors, Helga Elídóttir. “I’ll need to look for myself.”

Collective Agreement Signed, Avoiding Strike and Lockout

VR Union. VR Chairman Ragnar Þór Ingólfsson and SA CEO Sigríður Margrét Oddsdóttir shake on the new collective agreement, March 2024

VR Union and the Confederation of Icelandic Enterprise (SA) signed a four-year collective agreement just after midnight last night, RÚV reports. The airport workers’ strike proposed by VR Union and the lockout proposed by SA have therefore been called off. VR Union’s chair Ragnar Þór Ingólfsson stated that the agreement is acceptable given the circumstances, but that the matter is not over yet.

“It’s been a long and hard period for us and it’s very gratifying that we’ve gotten this long-term collective agreement,” stated Sigríður Margrét Oddsdóttir, CEO of SA. The two parties signed an agreement based on a proposal submitted by the State Mediator yesterday. “The mediator submitted an internal proposal that was based on a certain special wage agreement resulting from the main wage agreement that we were finalising and which the negotiating committees of both parties agreed to,” Sigríður added.

Shift changes for airport workers

She stated that the wage hikes for VR Union members are the same as those that have been agreed on with other unions. They include a general percentage-based increase of 3.25% this year and 3.5% for the next three years.

Ragnar stated that the agreement includes an article on changing the shift schedule for Keflavík Airport workers, the group that had been set to strike later this month if an agreement had not been reached. Changes to the group’s shift schedule are to be agreed on by December 20 with the help of the State Mediator.

Last major signing in a series of negotiations

The collective agreement between VR and SA was the last of a series of collective agreements being negotiated on the Icelandic labour market for the coming years. VR Union also signed a collective agreement this morning with the Icelandic Federation of Trade (Félag atvinnurekenda) with terms similar to those of their agreement with SA.

Cabinet to Receive 6% Raise Amid Inflation and Interest Hikes

Prime Minister of Iceland Katrín Jakobsdóttir

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].

National Pact Required to Fight Ongoing Inflation

The Governor of the Central Bank has stated that a national pact may be needed in order to overcome persistent inflation, RÚV reports. Whether or not the country is able to leave indexed loans behind, depends, to some extent, on the nation itself. The Finance Minister agrees with these ideas.

Depends on the nation to some extent

As noted by RÚV, the Governor of the Central Bank, Ásgeir Jónsson, was quoted in an article in Markaðurinn, on June 17, 2020, as saying that “an increase in the issuance of non-indexed loans would be a major turning point and would mean that indexation would die out.” He believes that it depends, to some extent, on the nation itself whether or not indexed loans would become a thing of the past:

“I had envisioned that we could have a nominal interest loan system, which I believe has many advantages over indexed loans. Based on both lower macroeconomic and a more active monetary policy. But it’s quite obvious that if we don’t succeed in keeping inflation down, it’s difficult to adopt such a system,” Ásgeir told RÚV yesterday.

Ásgeir stated that it was possible to change the terms of non-indexed loans to accommodate borrowers when instalments rise. He believes that a new national pact may be needed to overcome persistent inflation. When asked what such a consensus would entail and who would participate, Ásgeir responded thusly:

“A National pact is, naturally, based on parties within the labour market, as was the case when the first national pact was struck around 1990, regarding realistic targets for purchasing power, and so on. Such a pact is also predicated on a certain level of trust between the parties – and government involvement.”

Minister of Finance agrees

The Minister of Finance, Bjarni Benediktsson, told RÚV yesterday that he agreed with the Governor of the Central Bank regarding this national pact against inflation, stating that such efforts had long been discussed within parliament.

After the economic crisis in 2008, economic stability was tackled by the government. A consultation forum was established with the aim of increasing prosperity, where it became clear that various reforms were necessary; the Central Bank had been afforded better management tools, public finances were cleaned up, and actions were taken to strengthen the framework for economic stability.

“There is no question that the stakes are high, regarding, for example, the next round of wage negotiations and our plan to improve the state finances over the coming years. It is of great importance, first of all, for households; second, for the economy as a whole, and this matters, also, in regard to the state treasury and the local authorities, too. It’s simply really important to keep inflation down; interest rates will follow suit and capital costs will decrease,” Bjarni Benediktsson told RÚV.

Bjarni added that inflation expectations were out of control and that the market had “lost faith that inflation could be contained.” The Central Bank’s primary role was to bring inflation down to 2.5%, however, Bjarni noted, it could not tackle the issue alone. The labour market played a big role, given, especially, that there was currently no wage agreement with government employees and that it would not be long before contracts on the public market would expire again. Bjarni also noted that the excessive salaries of CEOs would need to be addressed.

“I completely agree [that CEO salaries need to be curbed]. In terms of taxation, we have a special tax bracket for such income and there is no doubt that we do not want to see wage increases in the upper brackets given the circumstances. Such increases are absolutely the worst solution in a situation where we are trying to create harmony and convince everyone to pitch in.”

Two Hundred and Sixty Officials Overpaid for Three Years

parliament Alþingi

Two hundred and sixty nationally elected officials, government ministers, and civil servants have been overpaid for the last three years, RÚV reports. The overpayment was a result of an error in calculating annual wage increases and amounts to a total of ISK 105 million [$785,928; €753,783], or roughly ISK 400,000 [$2,994; €2,871] per person. The recipients will be required to repay their excess salary.

Every year, the Financial Management Authority (FJS) updates the salaries of nationally elected individuals, government ministers, and civil servants in accordance with figures provided by Statistics Iceland and the Wage and Human Resources Administration. These increases are outlined in a law that was passed in 2019. However, in preparation for the wage increases for 2022, it was discovered that the wrong index has been used to determine the salaries of this group for three years, or ever since the law went into effect.

Instead of basing the wage increase for this group on the average increase in the regular wages of government employees from year to year, as is specified in the law, the benchmark for increases has been the wage index for government employees.

A total of 260 people—including President Guðni Th. Jóhannesson, members of parliament, judges, district attorneys, chiefs of police, and Central Bank director Ásgeir Jónsson—were overpaid as a result of this calculation error. They will be required to repay the excess wages, which will either be deducted in full from future salary or repaid via automatic payments over the course of 12 months.

Nurses’ Strike Narrowly Avoided

keflavik airport COVID-19 testing

Nurses in Iceland’s public healthcare system will not go on strike today as scheduled. The State Mediation Officer put forth a mediating proposal in the ongoing contract negotiations between the Icelandic Nurses’ Association (FÍH) and the state. The mediating proposal will be presented to FÍH nurses in meetings scheduled today and tomorrow at Reykjavík’s Grand Hotel, who will have until June 27 to cast their votes.

Icelandic nurses have been without a contract for nearly 15 months. Nurses voted down one collective agreement that was presented at the end of April, citing dissatisfaction with the proposed rise in base salary. When negotiations stalled again, 85.5% of nurses voted in favour of an indefinite strike which was scheduled to start today, June 22. The strike would have affected public healthcare services across the country, and in particular raised concerns that Iceland’s COVID-19 border screening initiative, which is overseen by nurses, would be disrupted.

Base Salary Decided By Arbitration

According to a press release from the State Mediation Officer, the two parties have now agreed on nearly all of the contract’s key issues, including a new working arrangement of day work and shift work. They remain divided on one key issue, however: nurses’ base salary. “Per the assessment of the State Mediation Officer, the difference between the contracting parties is profound and it will not be resolved at the negotiation table.” Therefore, the specific points of controversy regarding nurses’ wages will be directed to a special arbitration committee.

Icelandic nurses have long demanded that starting wages within the profession be raised. This stance was apparent in a survey conducted in May. “Nurses are sending a very clear message,” FÍH chairperson Guðbjörg Pálsdóttir stated when discussing the survey results. “They are ready to go quite far to receive a salary that takes into account their education and the responsibility of their job.”

Uncertainty About Unpaid Wages of WOW Flight Attendants

Flight attendants WOW air Icelandair

It is unclear whether the bankrupt estate of WOW Air will be able to fully settle salary-related preferential claims, says Sveinn Andri Sveinsson, Supreme Court Attorney and one of the trustees of the estate, RÚV reports. WOW Air declared bankruptcy in March of this year. The estate has approved salary-related preferential claims amounting to ISK 3.8 billion ($31,224,512 / €28,236,014). The estate’s assets are still being sold and its finances fluctuate week to week. The trustees met with the Icelandic Cabin Crew Association this week.

A Standard Meeting

There was nothing unusual about the meeting between WOW Air’s trustees and representatives of the Icelandic Cabin Crew Association, including the Association’s lawyer, Sveinn Andri stated. During the meeting, the trustees reviewed flight attendants’ demands, invoices, and other matters of dispute, the nature of which was not clarified. More meetings are expected in the future.

About 450 flight attendants have made salary-related preferential claims on the estate. A lot of work has been done to review these claims in detail, Sveinn Andri stated, however, it is unclear at the moment whether the estate will be able to pay outstanding salaries and salary-related fees.

Attempt to Settle All Preferential Claims

The Wage Guarantee Fund will repay a portion of the salaries, but it remains to be seen how much of the remaining balance the estate will be able to settle. All parties with preferential claims are equal in the eyes of the trustees and will receive equal pay. The trustees’ policy is to attempt to settle all preferential claims to prevent debts from falling on the government.

According to an article by Vísir in November, the estate is still disputing claims amounting to approximately ISK 1.3 billion ($10,698,773 / €9,674,486). Another division of estate meeting has been scheduled for January 30 to settle this dispute. The six thousand claims that have been declared of the estate amount to ca ISK 151 billion ($1.2 billion / €1.1 billion). The estate will not consider non-preferential claims as it is clear that the estate will not be able to pay them.

WOW Air was an Icelandic ultra-low-cost carrier founded in 2011 that operated services between Iceland, Europe, Asia, and North America.

Highest Paid Rural Mayors Earn More than Prime Minister

A recent round-up of mayoral and council manager salaries in rural municipalities is raising eyebrows in some quarters, RÚV reports. Per data first published in Viðskiptablaðið and analysed by Vísir, nine of the highest-paid rural mayors and/or district managers earn higher monthly salaries than Prime Minister Katrín Jakobsdóttir; 11 earn more than Reykjavík mayor Dagur B. Eggertsson.

Gunnar Einarsson is Iceland’s highest-paid mayor and earns ISK 2.6 million [$20,787; €18,772] a month for overseeing Garðabær, a capital-area town with 16,299 residents. The second-highest salary—or ISK 2.3 million [$18,393; € 16,611] a month—is earned by Gunnar Birgisson, mayor of the North Iceland municipality of Fjallabyggð, which is home to around 2,000 people spread amongst the villages of Siglufjörður and Ólafsfjörður. As a bracing point of comparison, both of these men are paid more than London mayor Sadiq Khan, who earns ISK 1.8 million [$14,392; € 12,999] a month for overseeing a city of nine million people.

The top five highest-earning public officials are based in Garðabær (pop. 16,299), Fjallabyggð (pop. 2,007), Ölfus (pop. 2,153), Bláskógabyggð (pop. 1,121), and Akranes (pop. 7,411). Three of the 15 highest-paid public officials are women. The top eleven earners make higher monthly salaries than Reykjavík mayor Dagur B. Eggertsson, who is paid ISK 1.9 million [$15,192; €13,716] for overseeing a city of 128,793 people.

Prime Minister Katrín Jakobsdóttir has criticized soaring salaries for public officials, while Minister of Finance Bjarni Benediktsson counters that the most important thing is transparency and that elected officials can provide justifications for why they are being paid the salaries they are.

“I don’t think it’s a good idea to start trying to centralise these [salaries],” Bjarni remarked. “We call on the responsibility of the municipalities when it comes to wage trends. We have been trying to set limits in the government and parliament because we need to answer for wage trends in the government vis-à-vis the labour market; we don’t want there to be any separation there. But local government[s] must take part in controlling wage creep at the highest level,” he said.

Bjarni did concede, however, that elected officials being at the top of the wage bracket didn’t make sense, “or having higher salaries than comparable responsibility would call for on the open market—it’s the open market that must guide this,” he concluded.