Punishing the lowest paid for the covid-crisis

2. 12, 2020

Yet again, the employers’ cartel SA uncorks attacks on the lowest paid workers as their solution to the covid crisis.In the radio show Víglínan last Sunday, the director of SA maintains that the results of the crisis, mainly unemployment, are the fault of these workers.In his view, the lowest paid should surrender their negotiated raises, for the benefit of companies.Therefore, Efling notes the following:

  • The basic rates of the collective agreements do not decide the Icelandic wage levels. A minority of private sector workers, the worst paid group, is paid at these rates. The majority gets market rates which are negotiated on a personal basis. Employers are permitted to renegotiate the salaries of their workers, given due notice.
  • Collective agreement rates, the minimum pay, are the only salaries which can not be lowered in that way. These are the wages which the director of SA now attacks, and which he blames for unemployment. This is a misleading hypothesis.
  • The highest basic rates in the Efling-SA agreement are now 341,680kr per month, the basic rates of bus drivers with 5 years’ experience. They will rise by 24,000kr on January 1, 2021, before tax. This means a 7% raise. Many bus drivers are now unemployed. They will not get their jobs back by freezing their salaries. They’ll get them back when tourists start visiting again.
  • A great majority of Icelandic companies are blossoming, and those who are in trouble have received generous public support precisely to be able to pay their workers. Some companies in tourism are in serious trouble, and have even gone broke, but broke companies won’t start hiring workers in any case.
  • In their own PR material, SA has said that household savings have increased in recent months. SA say that this is due to “limited opportunities for spending”, which shows their complete ignorance of the situation of the worst paid. People with a 341,680kr basic salary are not saving; they’re spending their money on bare necessities, and will continue to do so when their salaries rise by 7%. This raise will, in the case of low-wage workers, lead to increased spending, not savings, which will stimulate the local economy. This has been repeatedly noted by Efling, see e.g. the recent report, “Leið Eflingar út úr kreppunni.”
  • Those who now pad their accounts with savings are wealthy and high-paid people from the same class of privilege as those which run SA. Their director should be aiming his pleas at his class bretheren to invest or increase consumption, rather than threatening the working class with wages under public cost-of-living indices.