ASÍ leader rejects restrained wage deals without clear guarantees

Finnbjörn A. Hermannsson, outgoing president of the Icelandic Confederation of Labour (ASÍ), says workers should not agree to moderate pay rises over an extended period again without clear guarantees that the government, municipalities and businesses will honour their commitments. Trust between labour-market parties will be crucial to future wage negotiations, he said, according to mbl.is.

Speaking at the opening of ASÍ’s 47th congress on Wednesday, Hermannsson criticised the state, municipalities and companies for failing, in his view, to meet commitments made in the 2024 wage agreements. Workers had accepted moderate pay rises to help bring down inflation and interest rates, but others had not kept their side of the agreement, he said.

“Trust is at stake here, and it will determine how the next wage negotiations proceed,” Hermannsson said.

He welcomed a recent agreement between the government and labour-market parties, citing increased funding for public housing, inflation adjustment of child benefits, a rent cap, chain liability and a pledge to impose fines for wage theft. He thanked Prime Minister Kristrún Frostadóttir’s government for its cooperation and said important progress had been made.

At the same time, he criticised tax increases and higher public charges, saying they particularly affected low-income households. Promises by government leaders not to raise taxes on ordinary people had clearly not been kept, he said.

Hermannsson also warned that the government too often sought input from the labour movement only after key decisions had been made. He cited changes to unemployment insurance and issues affecting public-sector employees, saying the approach undermined trust.

On artificial intelligence and other new technology, he argued that workers should receive a fair share of productivity gains through better pay and working conditions. If technology significantly reduced the time needed to do a job, shorter working hours should be considered, he said. The labour movement should also influence how technology is introduced and ensure that human responsibility is not lost behind algorithms.