It is not yet clear what methods individual municipalities will choose to finance pay increases to pre-school teachers following Saturday’s resolution to their long-running pay dispute. Some municipalities are in a financially poor state already.
The finances of Icelandic municipalities vary considerably and some of them will probably have to raise taxes or cut services to meet the new wage demands.
The contents of the new pay agreement will be presented to pre-school teachers’ union members over the coming days and the overall total cost of the agreement has yet to be worked out.
Head of the Association of Icelandic Municipalities, Halldor Halldorsson, says he is happy that an agreement has been reached, but that it is still unclear where the extra money will come from.
“I predict that municipalities will take different measures,” Halldorsson told RUV. “They are not equally ready, in fact, to deal with pay increases.”
He added that too-big pay rises have been awarded too quickly for the municipalities, the state and businesses to cope with easily — it is now a question of wrestling with ways to cough up the cash.