Confederation of Icelandic Employers Doesn’t Understand Economics

Recently, the Confederation of Icelandic Employers (SA) rejected labour’s demand for increased wages. They also recently released a television advertisement where they argued that the reason why Iceland is experiencing inflation since the 2008 bank crash is because workers were granted pay raises. The Industrial Workers of the World – Iceland (IWWI) contends that this assertion is not only demonstrably false but also shows a lack of respect for the working class.

Inflation in Iceland has nothing to do with wages. It has to do with the fact that, for better or for worse, we have chosen to use a small, independent currency. The Icelandic crown is not pegged to any other currency, and is a free-moving currency, but its small size means that even the slightest ripples in the global economy have dramatic effects on the Icelandic economy.

It is not only inaccurate to blame reasonable worker demands for pay raises for inflation; it is also based on the assumption that the money for these raises would have to be printed. Meanwhile business leaders continue to draw exhorbitant salaries and report increasing profits. The working classes could very well get their wage increases from this hoarded wealth without affecting inflation in the slightest.

It is furthermore bad faith for SA to release this television spot at a very sensitive time in collective bargaining negotiations.

The IWWI believes this demonstrates that SA is only interested in widening profit margins. Unless and until SA apologizes with a correction, sits down at the table with this nation’s unions and demonstrates a real and tangible willingness to take part in helping to build a better society for us all, Icelanders may as well assume that SA is actively engaged in class warfare against working people. We encourage all Icelanders to resist this blatant misinformation campaign, and hold fast in their respective unions to demand higher wages.