Highest wages shall never be higher than three times the lowest wages

At a city council meeting, I submitted a proposal that the highest wages shall never be higher than three times the lowest wages. The proposal was dismissed, but I would have liked more discussion on the content of the proposal and stated that if we cannot agree on this ratio, it would always be possible to discuss what wage gap we could possibly agree on, what we think it should be, and how we would argue for it. There simply seems to be no will for this from the majority, which considers the city council not to be the forum for making decisions on these matters. However, the city council has a lot to say about the wages of the highest paid, and if a discussion about an acceptable wage gap between the highest and lowest wages does not belong in the city council, where does it belong? If you are interested in the wages of city councilors, you can see them hereWages of elected representatives at ReykjavíkurborgProposal that the highest wages shall never be higher than three times the lowest wages:The City Council approves a wage policy stating that the highest wages of those working for Reykjavíkurborg shall never be higher than three times the lowest wages of the city's employees. The proposal applies to all staff of Reykjavíkurborg and the city's elected representatives. Wages include, for example, payments that elected representatives receive on top of their basic salaries for serving on committees and councils. By linking the amount of the highest wages to the lowest wages, we ensure that there is a certain coherence between Reykjavíkurborg's wage payments and that the wage gap between the highest and lowest paid will not be manifold. For example, if the lowest monthly wages are based on 425,000 krónur after three years, as demanded by Starfsgreinasambandið, the highest monthly wages would not exceed 1,275,000 krónur. It is proposed that the finance office be tasked with initiating preparations for implementation in cooperation with the human resources department and the wage committee of Reykjavíkurborg, which shall submit proposals for the implementation regarding the wage gap of the different occupational groups working for Reykjavíkurborg. In this work, boards and managing directors of B-part companies shall be consulted. If this work is not completed by June 1st next, when the new organizational structure of Reykjavíkurborg takes effect and the finance office is abolished, it is proposed that the Department of Finance and Risk Management take over the work.Rationale:

Discussions about income distribution and the terms of employment for workers have been extensive, given that the gap between those who are financially well-off and those who are not is constantly growing in our society. At the same time as we hear news of enormous salary increases for CEOs, we follow the struggle of low-wage groups for decent living conditions. It is extremely important to raise the wages of the lowest paid, but equally important for companies and institutions to formulate a future policy on employment terms regarding an acceptable wage gap between the highest and lowest paid.

Looking at Reykjavíkurborg, figures show that there is a sixfold difference between the highest and lowest wages, considering the mayor's salary on the one hand and minimum wages within the city on the other. It can also be mentioned that the basic salaries of city councilors are more than twice as high as the lowest wages of city employees. In September last year, the basic salaries of city councilors had increased by 22.4% since the city council decided in April 2017 to link the wages of elected representatives to the development of the wage index. Looking at the wage development of those on the lowest wages, it is not apparent that they have enjoyed the same benefit. Reykjavíkurborg is the largest workplace in the country, and it is important that it presents a comprehensive wage policy. The current wage policy of Reykjavíkurborg does not address the wage gap between different occupational groups in the city in this manner. Based on the aforementioned proposal, the choice is between lowering the highest wages or raising the lowest wages.

Previously, the mayor's salary was based on the Prime Minister's salary, and city councilors' salaries were based on 78.82% of parliamentary salaries. Now, the mayor's salary increases based on the wage index, and the same applies to city councilors' salaries, as the city council approved in April 2017 that salaries would follow the wage index. It was positive to see that the city council thereby rejected a proposal for further salary increases based on the ruling of Kjararáð, but it is nevertheless important to increase the consistency between wages within Reykjavíkurborg. By fixing the lowest wages at one-third of the highest wages, a certain coherence between wages is ensured, and that future wage development will never lead to certain occupational groups significantly outpacing others in wage increases. This proposal is put forward as a step towards fairer income distribution and increased equality.

In the speech surrounding the proposal, I emphasized how we value work contribution and that it was necessary to put forward a comprehensive policy that reflects that all staff of Reykjavíkurborg are part of an important whole. There, I pondered how we can justify someone in top management positions receiving many times higher wages than a person in a low-wage job:

By linking the amount of the highest wages to the lowest wages, we ensure that there is a certain coherence between Reykjavíkurborg's wage payments and that the wage gap between the highest and lowest paid will not be manifold. I see this as a certain future guarantee that there is a certain coherence here, based on a comprehensive approach to the wage matters of all Reykjavíkurborg employees, stemming from a certain fairness perspective. For example, if the lowest monthly wages are based on 425,000 krónur after three years, as demanded by Starfsgreinasambandið and VR, the highest monthly wages would not exceed 1,275,000 krónur. I find this an acceptable wage gap and do not see why the wage gap needs to be many times greater. But there is a wide range of opinions on what we consider an acceptable wage gap; if we cannot agree on this ratio, then I hope we can at least discuss these ideas about a wage gap and settle on some ratio in these matters.

I realize that some jobs require specific expertise and skills, and that some jobs are very stress-related, for example, having to always be available and having to always answer for various things that might arise, e.g., in the media. But how do we assess the importance of jobs, and how do we assess stress and importance? What do we base our assessment on? I know it's difficult to measure this, but is there really someone who performs three times more important, more specialized, and three times more work in their job than someone else working for the city? I understand that some simply cannot get away from their jobs as much as others and are constantly performing work, and it is understandable that they are paid extra for such. But if we were to measure importance and consider all factors such as competence and expertise, what wage gap would we then agree upon?

It is often said that job stress should be reflected in wages. Let's say that the workload of certain individuals in their job has become so great that they are doing work that is considered four, five, or more times the traditional work in terms of wages, shouldn't that work then simply be divided among more positions? Can we put all that stress on one person? In all this talk about shortening the work week and burnout, are we perhaps putting too much stress on one job, on one employee? I ponder this in this context. In the discussion about wages, one also often hears about the importance of wages being attractive for important positions, and more often, attention is generally directed towards the highest paid and the jobs they perform. They are extremely important, and I am not trying to diminish their important contribution, but I ponder this in the larger context. If we look at stress, isn't the same true for the jobs of those who receive the lowest wages? Isn't there also a lot of stress there, in the lowest paid jobs, both physical and mental stress? Do we somehow find it justifiable to pay them proportionally much less because it's always easy to fill those positions with new staff? This is what I ponder in this larger context and the importance of setting forth provisions for a wage gap. Why are some jobs that are just as important as others valued at the bottom of the respect ladder in terms of paid wages, when we look, for example, at care and service jobs?

If we look generally at the historical context, there was not always such a large gap between occupational groups as is known now; teachers, for example, were paid as much as members of parliament, which has certainly changed. The goal of this wage policy is to prevent certain occupational groups from significantly outpacing others, and I believe this is something we need to examine in this, the country's largest workplace. The city's current wage policy states that 'wage decisions shall be transparent and objective.' Here, I find it an ideal opportunity to add a provision about the wage gap between different jobs. I therefore ask myself on what objective basis do we build wage differences and wage increases? The wage policy also states: 'The goal of Reykjavíkurborg is that qualified employees are selected to work for its institutions and companies, that they are content there and have the ambition to tackle the tasks awaiting resolution. Reykjavíkurborg's wage policy is intended to support and enhance the city's services in terms of quality and efficiency. It shall take into account the city's overall goals and the operational plans of institutions and companies. Special attention shall be paid to the terms of those who perform jobs exclusively within the scope of municipal public services.'

If we look at the positive consequences of a moderate wage gap, I believe there can be many. A wage gap where the difference is never more than a certain ratio can increase the feeling among staff that they are part of a whole, that they work together to create a good city where everyone has an important purpose. Where there is not a manifold difference between those who work in top management positions in strategic work and those who work 'on the floor' as it is called. These are all extremely important jobs, and looking to the future, I believe that a wage policy that addresses the wage gap can be good for overall morale and increase the desirability of working for Reykjavíkurborg. There are a great many capable people here, and it is important to take good care of them. I believe this is a good place to work and that we can make it even better with such a comprehensive wage policy.

Such a policy is a way to set the tone and reflect that Reykjavíkurborg as a workplace has a comprehensive policy that takes into account all its staff and recognizes that they are all an important part of a strong whole. We are all here working for the people who live in this city; we need to show them that their funds are being well managed. I consider it not only responsible to address a certain wage gap in a wage policy but also a preventative measure that ensures that future wage development is transparent, where we will then be aware that no one is receiving higher wages than a certain amount and that wage development follows a certain coherence. This proposal is put forward as a step towards fairer income distribution and increased equality.

Statement of the majority with the dismissal proposal:

There is general consensus in Icelandic society that agreements on wages and terms of employment are made between employers and trade unions representing employees, who hold the negotiating mandate. It is worth noting that the majority's cooperation agreement states: 'We intend to eliminate the gender pay gap among Reykjavíkurborg employees, formulate a wage policy, and continue the pilot project on shortening the work week.' In our opinion, that is the correct approach. As it is not considered appropriate for a municipality to intervene in wage matters in the direct manner stipulated in the proposal, it is proposed that the proposal be dismissed.

Statement of Sósíalistaflokkur Íslands regarding the dismissal:

The highest wages of top managers, i.e., officials, and the highest wages of elected representatives need to be lowered to keep the wage gap between the highest and lowest wages within reasonable limits. Those wages are not determined in agreements between trade unions and employers, as the majority claims. For example, in 2017, the city council decided to change the wage development of city councilors and rejected Kjararáð's proposals for wage increases, instead linking wages to the wage index. Furthermore, the wage committee of Reykjavíkurborg determines the wages of Reykjavíkurborg's top managers, and the remuneration of those officials who fall under the wage committee is a maximum of 1,500,000 krónur. It is also worth mentioning that the city council has approved changes to the financial allocations of professional departments due to wage increases according to the decision of the wage committee. If a discussion about an acceptable wage gap between the highest and lowest wages does not belong in the city council, where does it belong? Given the current situation, the wages of the highest paid within the city are many times higher than the lowest wages, and there is more than a sixfold difference between the mayor's salary and the lowest wages within the city. The majority refers to general consensus regarding the current contractual arrangement in wage matters, but there is no consensus on excessive wages in society. If there is no will to lower the highest wages, the very lowest can always be raised, which will most likely lead to celebration for many.

Sanna Magdalena Mörtudóttir