Jón Gunnarsson says Iceland’s labour model threatens economic stability

Jón Gunnarsson, a member of Iceland’s parliament for the Independence Party and a former transport minister, has warned that a potential strike by Icelandair aircraft mechanics could affect society as a whole. Mbl.is reported his comments after negotiations between Icelandair and the Aircraft Mechanics Association of Iceland ended without an agreement.

The negotiations were suspended after the meeting ended on Friday afternoon, making a strike at the start of 23 September increasingly likely.

Gunnarsson said he generally believed politicians should not interfere excessively in wage negotiations between trade unions and employers. However, he argued that Iceland’s labour-market model gave unions a particularly strong position when seeking improved terms for small occupational groups.

He said this had repeatedly placed society in a serious position.

“We have many such examples from the past, and this is clearly something we need to examine and change because it is not known in the countries we compare ourselves with,” Gunnarsson said. He added that the recurring situation should encourage labour-market organisations and politicians to seek a more reasonable solution.

Gunnarsson said a strike could further fuel inflation in the economy.

“This crystallises even more clearly the serious position we are in with our labour-market model,” he said. In his view, action was needed by looking at the wider picture and bringing wage negotiations more generally into line with practices in comparable countries.

Asked whether alternatives would be discussed in parliament, Gunnarsson said that was unavoidable. He said parliament had intervened several times in the past when issues threatened economic stability.

However, he said it was unacceptable for the labour-market model to repeatedly create circumstances in which such intervention became necessary.