Wages in Iceland in June rose by 1% compared to the month before, and the 12 month increase in wages has been 7.3%, the wage index, which is calculated by Statistics Iceland shows. Thanks to low inflation most of the wage increase has been translated into greater purchasing power, as real wages have risen by 5.6% in the past 12 months.
Low unemployment, rising wages
The rise in the wage index has slowed down significantly in the past 12 months. The index rose following significant wage increases which had been written into sectoral wage agreements, its rise peaking in April 2015 when the 12 month increase was 13.4%. Wages have continue to creep up since then, but at a far slower pace.
Thanks to low inflation, which is currently 1.5%, according to the Icelandic Central Bank, most of these increases have been translated into greater purchasing power.
Purchasing power significantly higher than pre-crash levels
The real wage index, which tracks the purchasing power of wages, has therefore also continued to increase. The index peaked in 2007, after having risen continuously since 1994. The 2008 financial crash caused real wages to drop significantly, and between 2007 and 2010 the purchasing power of wages dropped by 11%.
Since 2010 real wages have been rising again, reaching the pre-crash peak in 2014. From May 2014 and this spring the purchasing power of wages has increased by 19%.
Wages in Iceland in June rose by 1% compared to the month before, and the 12 month increase in wages has been 7.3%, the wage index, which is calculated by Statistics Iceland shows. Thanks to low inflation most of the wage increase has been translated into greater purchasing power, as real wages have risen by 5.6% in the past 12 months.
Low unemployment, rising wages
The rise in the wage index has slowed down significantly in the past 12 months. The index rose following significant wage increases which had been written into sectoral wage agreements, its rise peaking in April 2015 when the 12 month increase was 13.4%. Wages have continue to creep up since then, but at a far slower pace.
Thanks to low inflation, which is currently 1.5%, according to the Icelandic Central Bank, most of these increases have been translated into greater purchasing power.
Purchasing power significantly higher than pre-crash levels
The real wage index, which tracks the purchasing power of wages, has therefore also continued to increase. The index peaked in 2007, after having risen continuously since 1994. The 2008 financial crash caused real wages to drop significantly, and between 2007 and 2010 the purchasing power of wages dropped by 11%.
Since 2010 real wages have been rising again, reaching the pre-crash peak in 2014. From May 2014 and this spring the purchasing power of wages has increased by 19%.
