But as the chart shows, substantial differences emerge if other price indices are used as a reference. By these measures, general service workers and labourers have enjoyed a sizeable boost in purchasing power, and only management-level employees have suffered a YoY deterioration by all measures. Developments in real wages vary inversely with each occupational group’s average wages, of course, with managers at the upper end and labourers and general service workers at the lower end.
Icelanders better positioned than most
No matter how they are calculated, real wages are certainly not a universal measure of living standards in the country. The transfer system is also important, as are investment income and tax burdens, not to mention the employment level. Furthermore, these figures are averages, and when itch comes to scratch, each household’s consumption pattern is unique, and some have doubtless been hit hard by the recent surge in inflation. The computation exercise above shows us, though, that in terms of criteria that enable a head-to-head comparison with neighbouring countries, Icelandic households are probably better positioned than most to face the uncertain winter ahead.