Country Report Iceland July 1998 Main report

Economic policy: Nurses' wage agreement may have knock-on effects

A bitter long-running labour dispute between the government and nurses, which led to the resignation of about 60% of all nurses in Iceland, was resolved at the end of June. The dispute centred on the demands of nurses that their salaries take more account of effort, experience and responsibilities than past wage agreements had done. The agreement is estimated to have netted nurses an average 20% increase in salaries -- a figure well in excess of most recent wage agreements in the private and public sector. The threat of an emergency situation forced the government to meet the demands of the nurses' union, which are expected to cost the government an additional Ikr300m per year. The willingness of the government to give in to the demands of public-sector unions has caused some unease in the private sector. The Federation of Icelandic Employers (FIE) has expressed its concern that the agreements the government has reached with public-sector unions over the last year will have serious effects on the private sector, leading to demands for a renegotiation of long-term wage agreements reached between the FIE and the trade unions in the private sector.

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