Reykjavík Grapevine - 22.05.2015, Side 6

6
The Reykjavík Grapevine
Issue 1 — 20116 The Reykjavík GrapevineIssue 6 — 2015
Iceland | Unite!
For the past month and a half, thousands
of people have been on strike, and bar-
ring a major breakthrough, it looks like
that number might grow significantly in
the next few weeks.
Members of BHM, the Association of
Academics, an umbrella organisation of
27 unions representing university-edu-
cated professionals, have been on strike
since the beginning of April. SGS, the
Federation of General and Special Work-
ers, representing 19 unions and workers
in various fields, including the fishing
and tourism industries, has already be-
gun limited strike action, with a 12-hour
work stoppage on Thursday, April 30. It
has been announced that it will follow
up with further short work stoppages on
May 28 and 29 and a full strike on June 6
if no agreement is reached in the interim.
A full strike by the SGS will mean
large sections of the tourism industry
will be paralysed, as many unskilled
workers in hotels and restaurants, as well
as bus drivers, are members of unions
belonging to the SGS. Other unions have
also threatened strikes, among them VR,
which represents office and retail work-
ers.
Yes, foreign visitors will
be impacted
To date the strikes have had a limited
impact, although the targeted strikes
of a number of professions belonging to
the BHM—including health workers and
midwives, veterinarians, and lawyers
working for the Reykjavík municipal-
ity—are beginning to cause serious dis-
ruption.
The strike amongst veterinarians
who do health inspections has led to
a nationwide shortage of chicken and
some processed meat products. The
strike amongst lawyers working for
the city has meant that documents or
contracts cannot be registered, no new
permits can be issued and no real estate
transactions legally completed as deeds
cannot be transferred. This has already
caused considerable trouble to realtors
and anyone buying or selling a home,
as payments are held up. The growing
backlog of thousands of documents will
take weeks to process once the lawyers
return to work.
If agreements are not reached soon,
and all the unions move from limited ac-
tion to general strike action, we will see
far more serious effects. Over 70,000
workers might be on strike by early sum-
mer.
The general secretary of the SGS,
Drífa Snædal, notes that foreign visi-
tors will most certainly feel the strike.
“The immediate impact on foreign visi-
tors will probably be through air traf-
fic, which will be paralysed as baggage
handlers, drivers of oil trucks and retail
workers at the Keflavík airport will go on
strike,” she says. “Many restaurants will
be forced to close their doors, and the
cleaning staff of hotels will be on strike
as well.”
As Drífa points out, “most daily ac-
tion will grind to a halt.”
So, why are people going
on strike?
Most attention has been paid to the
demand to raise the lowest wages to
300,000 ISK per month by 2017, which
comes to just about 228,000 ISK per
month after taxes (18,600 EUR or 21,000
USD annually).
SA-Business Iceland, a service organ-
isation for Icelandic business, has reject-
ed the demand, arguing that companies
will either have to lay people off, or will
simply have to go out of business. Wages,
they argue, cannot grow much faster
than productivity. Any wage increase
in excess of 3.5% would lead to inflation
that will undermine the economic sta-
bility achieved in the past years. Bjarni
Benediktsson, the minister of finance,
has made the same argument, warning
against the inflationary consequences of
meeting union demands.
It turns out, though, that not all com-
panies agree that paying a higher mini-
mum wage will spell their ruin. A grow-
ing number of smaller businesses, many
in the tourism industry, which are not
members of SA-Business Iceland have
struck deals with the SGS, agreeing to
their full demands in order to stave off
the threat of strikes later this month. A
union leader who spoke to the Iceland’s
national public broadcasting service,
RÚV, argued that many more compa-
nies would like to strike deals with the
unions, but are held back by SA-Business
Iceland.
Near-universal support
In fact, unions' demand for a raise in the
minimum wage enjoys near-universal
support. According to a recent Gallup
poll, 91.6% of Icelanders support the
lowest monthly wage being raised to
300,000 ISK. In fact, when asked what
the minimum wage should be, the aver-
age figure people gave was 10% higher,
or just under 330,000 ISK per month.
This is not surprising considering that
the Debtors Ombudsman estimates that
a single parent with two children needs
to make 232,282 ISK in order to exist,
and that excludes the cost of housing.
So even if the minimum wage is raised
in accordance with the demands of SGS,
the take-home pay of those making mini-
mum wage will not be enough for some
to make ends meet.
So, how do people make ends meet?
By working overtime or two jobs. Ac-
cording to Drífa Snædal, 60% of the
members of SGS, who do not have special
sector contracts, are making less than
238,000 ISK per month before taxes. The
union's demand, she argues, is so that its
members are able to pay the bills work-
ing one job.
This is not just a problem facing the
lowest-paid workers. Gylfi Arnbjörns-
son, the president of ASÍ, the Icelandic
Federation of Labour, argues that a full
30-35% of the nation is struggling to
maintain a decent standard of living.
Even people earning above median wag-
es have trouble paying basic bills.
It is not just expensive to
travel in Iceland
The reason why middle-class profes-
sionals are going on strike and demand-
ing a living wage is because Iceland is
expensive (as visitors may have noticed).
The 2015 Travel and Tourism Competi-
tiveness Report of the World Economic
Forum ranked Iceland 128th out of 141
countries when it came to price competi-
tiveness. In a recent OECD report on the
salaries of teachers in its member coun-
tries, Iceland was in 26th place, well be-
hind most Western European countries.
The average annual salary of teachers is
48,932 USD in Denmark, but only 28,100
USD in Iceland when adjusted by pur-
chasing power parity.
Whether we are
looking at workers
with a university edu-
cation or not, wages
are on average 20%
lower in Iceland than
in the other Nordic
countries, according to
the Icelandic Federa-
tion of Labour.
Wage costs are also
relatively low in Ice-
land compared to oth-
er countries. Accord-
ing to the most recent
figures from Eurostat
in 2012, wage costs in
Iceland were well be-
low the other Nordic
countries as well as
most Western European countries, and
slightly below the European average.
To many in the labour movement, the
problem is all about inequality. In fact,
the only class of people who earn a high-
er wage in Iceland than in Scandinavia
are business managers and chief execu-
tives. According to calculations made by
ASÍ, executive pay adjusted for purchas-
ing parity is on average 5% higher in Ice-
land than in Scandinavia.
You can’t make this
shit up!
The day before the first half-day strike
action of the SGS, KEA, an investment
company headquartered in Akureyri,
announced that it was giving its CEO a
20% raise, or an extra five million ISK
per year. Drífa Snædal, the managing
director of SGS, shared the news on her
Facebook page, posting: “One day to
strikes… You can’t make this shit up!”
Drífa explains that people are going
on strike because they have had enough.
“It seems as if there is more than enough
money when it comes to raising wages
for executives and people in the highest
income brackets,” she says, “but when
workers ask for a living wage, all of a sud-
den times are really tough and everyone
needs to tighten their belts so that we
don’t threaten economic stability.”
Yet, she notes, it is the working class
that is asked to shoulder the burden of
maintaining economic stability. “The
working class is asked to ensure that
inflation does not take off, and that
economic stability is
maintained. But stabil-
ity which is based on
economic injustice is
not a stability we can
accept.”
Blame the gov-
ernment and
the bosses
While Drífa stresses
that the main reason
for the strikes is that
employers have not
been willing to accept
demands that workers
receive something re-
sembling a living wage,
she points out that the attitude of em-
ployers and the government has enraged
many in the labour movement.
It is not just that executive pay has
risen significantly in the past few years,
Drífa argues, but that the government
has lowered taxes on the wealthy and
corporations, while raising taxes on food
and co-pays in the health services. “The
tactlessness of these actions has really
angered many people,“ she says.
For example, at the same time as
fishing giant HB Grandi was offering its
workers pay raises of 3.5%, the company
announced a 33% raise in compensation
to its board members, which amounted
to a five- or six-figure raise for them
while workers at the company’s freezer
plants were offered a raise of five or six
thousand. Other companies have an-
nounced similar increases in executive
compensation. The insurance company
VÍS, for instance, announced a whop-
ping 70% raise in compensation to its
board members. Faced with public out-
rage, the company later withdrew the
proposal, citing the need to show re-
straint and take responsibility for main-
taining economic stability.
Meanwhile, Minister of Finance
Bjarni Benediktsson has not done much
to calm the waters, calling the union de-
mands excessive and proposing legisla-
tion that would double the legal limits on
bank bonuses. Apparently, some people
deserve a raise more than others.
The conventional wisdom says that Iceland is a happy,
prosperous place with that strong Nordic welfare system.
But if things are so great in Iceland, why is everyone so
angry about the state of the economy, and why are we in
the midst of the bitterest labour disputes in years?
Words by Magnús Sveinn Helgason
Photo by Art Bicnick
Iceland
Strikes Again!
Key
Players
Icelandic Federation of
Labour (ASÍ)
51-member unions represent-
ing 100,000 workers
Association of Academics
(BHM)
27-member unions represent-
ing 11,000 workers
SA-Business Iceland:
a service organisation for
Icelandic businesses, negoti-
ates with unions on wages and
working conditions, represent-
ing about 2,000 businesses, ac-
counting for 70% of all salaried
employees on the Icelandic
labour market
Federation of General and
Special Workers (SGS)
representing 50,000 workers
VR Trade Union: commer-
cial and office workers'
union
representing 30,000 workers