Workers resist rising costs and inflation pressures in Iceland
Workers are determined not to remain passive as others push the costs onto inflation. The president of the Icelandic Confederation of Labor noted that employees are unwilling to sit idly by while price increases are transferred into inflation metrics. Inflation rose in July and continues to be a persistent issue.
In the past twelve months, the consumer price index has increased by 6.3 percent, with a notable rise of 4.2 percent excluding housing costs. This brings inflation back above six percent. Data from Statistics Iceland indicates a decrease in the prices of clothing and shoes, as well as furniture and household goods. Conversely, food prices have risen by 1.1 percent, along with a 0.5 percent increase in calculated rent costs. Airfare for international flights has surged by 16.5 percent.
Finnbjörn A. Hermannsson, the president of the labor union, expressed significant disappointment at the continued inflation, which he had hoped would start to decline. He emphasized the necessity of lowering interest rates to achieve balance in the housing market, where housing, heating, and electricity costs have escalated by almost 12 percent over the last year.
Hermannsson pointed out that public trust in an improving economic situation has waned, as citizens attempt to protect their interests by shifting all costs into inflation. The concurrent rise in essential areas such as food and housing continues to amplify inflationary pressures.
When asked if these conditions would impact wage negotiations, he confirmed it would. He stated that a review clause is set for early 2025, and if inflation remains above 4.9 percent, it would have significant implications for those negotiations.