Wages increased 1.9% from the previous quarter
Wages have increased 1.9% on average from the previous quarter according to the quarterly wage index in 2nd quarter 2014. From the previous year the increase was 5.4% on average, 5.8% in the private sector and 4.6% in the public sector. The annual increase was 5.5% for the central government employees and 3.5% for the local government employees.
Wages in the private sector by economic activity and occupational group
From the previous quarter, the largest wage increase was in Transport, storage and communication and Financial intermediation where wages increased by 2.8%. During the same period wages increased the least in Manufacturing or by 0.8%. The annual change of the wage index ranged from 4.6% in Manufacturing to 7.9% in Construction.
Wages for Craft workers increased by 1.3% while wages for Technicians and associate professionals increased by 2.6% between quarters. Annual change ranged from 5.3% for Craft workers to 6.5% for Service workers and shop and market sales workers.
Collective agreements
Collective agreements in the Icelandic labour market affect the wage index in the second quarter of 2014. An agreement between the Confederation of Icelandic Employers and member unions of the Icelandic Confederation of Labour, signed 21 December 2013, stipulates a general wage raise of 2.8% in January 2014 or at least 8.000 ISK for full-time equivalent. In addition it included a special increase for the lowest wage tables. Considering that for some of the member unions the agreement was not fully ratified until March it did not come into full effect until the second quarter of 2014.
Agreements between the Minister of Finance, on behalf of the State Treasury, and the municipalities on the one hand and some state workers member unions on the other hand, signed in March and April 2014, affect the wage index in the second quarter of 2014.
About the wage index
The wage index is a quarterly index and shows the changes of regular hourly wages. Data for the private sector are published by occupational group and economic activity. Data for the public sector are published by administrative level. Employees in the public sector work for the municipalities and the central government. Other employees belong to the private sector.