Industry leader rejects labour movement contract claims

Þorsteinn Víglundsson, chair of Samtök iðnaðarins, an industry association, has criticised what he called threats by the labour movement to terminate collective agreements, mbl.is reported.

“At the same time as the economy is cooling rapidly and unemployment is rising, the leadership of the labour movement is threatening to terminate collective agreements because the conditions have been breached,” Víglundsson wrote in a post.

He acknowledged that inflation had been higher than expected, but said the same applied to wage increases and purchasing power. He therefore rejected the claim that the conditions for the current agreements had been breached.

The 2024 collective agreements, known as the stability agreements, included a condition that inflation should not exceed 4.7 percent in August this year. Inflation stood at 5.3 percent in July.

Víglundsson said economic growth had been considerably weaker and the overall economic situation poorer than expected. This had reduced companies’ ability to grant wage increases, he said. The situation was even worse when measured by gross domestic product per capita, which he described as a useful measure of growth, productivity and scope for wage increases.

He said it was difficult to see why the government should be asked to take extensive action, or why wages should be raised to compensate workers for losses caused by inflation, when purchasing power had increased at the same time.

Víglundsson called instead for targeted government measures to prevent further economic contraction and offset worsening competitiveness. Lower charges on companies, simpler regulations and faster infrastructure development would be sensible responses, he said.