The wage index in May 2018 is 656.5 points, 2.3% higher than in the previous month. In the last twelve months the monthly wage index has risen by 6.3%.
| Wage Index 2017-2018 | |||||
| December 1988=100 | Change from previous month, % | Annual rate based on the change in the last |
|||
| Index | 3 months, % | 6 months, % | 12 months, % | ||
| 2017 | |||||
| May | 617.8 | 3.2 | 16.2 | 9.7 | 7.8 |
| June | 623.8 | 1.0 | 19.0 | 11.0 | 7.3 |
| July | 623.9 | 0.0 | 18.2 | 10.9 | 7.2 |
| August | 625.2 | 0.2 | 4.9 | 10.4 | 7.2 |
| September | 630.0 | 0.8 | 4.0 | 11.2 | 7.4 |
| October | 630.7 | 0.1 | 4.4 | 11.1 | 7.2 |
| November | 631.6 | 0.1 | 4.2 | 4.5 | 7.1 |
| December | 632.8 | 0.2 | 1.8 | 2.9 | 6.9 |
| 2018 | |||||
| January | 635.6 | 0.4 | 3.1 | 3.8 | 7.3 |
| February | 638.1 | 0.4 | 4.2 | 4.2 | 7.2 |
| March | 640.0 | 0.3 | 4.6 | 3.2 | 7.1 |
| April | 641.9 | 0.3 | 4.0 | 3.6 | 7.3 |
| May | 656.5 | 2.3 | 12.0 | 8.0 | 6.3 |
| Notes: The wage index is calculated and published according to law No 89/1989. The wage index is based on regular hours earnings each month, calculated and published in the following month. | |||||
Real wages were 2.4% higher than in the previous month
The real wage index in May 2018 is 149.1 points, 2.4% higher than in the previous month. In the last twelve months the real wage index has risen by 4.2%.
Collective agreements
Collective agreements in the private sector affect the wage index. For example the agreement between the member organizations of Icelandic Confederation of Labour and Confederation of Icelandic Employers, which stipulates a general wage increase of 3.0% on May 1st 2018. Also between Icelandic Financial Services Association and Confederation of Icelandic Employers, which stipulates a general wage increase of 5.0% on May 1st 2018.
About the wage index and the real wage index
The wage index is a price index based on data from the Icelandic survey on wages earnings and labour cost. The purpose of the index is to reflect changes in wages paid for fixed working hours. The index is based on earnings for contractual working hours and includes all wages paid for day time and fixed overtime hours, including additional payments and bonuses. Irregular payments and employers' social contributions and taxes are excluded.
The real wage index shows changes in wages in relation to changes of the consumer price index. In general, real wages increase when wages increase more than price levels, but decrease when inflation is higher than wage rises. Real wages are not the same as disposable income of households.