Nevertheless, wage developments for the aforementioned three groups have changed markedly, as the chart indicates. From mid-2020 until early 2022, the private sector trailed the other two groups, and municipal employees’ wages rose the most. The difference between groups stems from the Living Standards Agreements signed in 2019, which provided for unit-based pay rises for the entire labour market and therefore granted the lowest-paid workers the largest proportional pay increases. Another contributing factor is the shortening of the work week, which affected public sector workers more than others.
Naturally, focusing solely on twelve-month pay increases can give a distorted view of reality, and it is better to zoom out and examine longer periods of time. Since the beginning of 2019, municipal employees’ wages have risen the most, or by 40%, followed by private sector wages (38%) and then State employees’ wages (29%).
Wage rises largest in tourism
If we drill down into data for the private sector, we can see that tourism industry wages have risen the most in the past year, or nearly 15%. Next in line are construction workers’ wages, which are up 13%. Not only does this accord well with the labour shortages in these two sectors, it also reflects the wage agreements that conferred a mixture of unit-based and proportional pay rises. Utilities sector wages have risen the least in the past year, at only 8%, while other sectors are somewhere in the middle, or around 10-12%.