A Wide Divide in the Situation of Wage Earners
01. October 2025New Varða Report: A Wide Divide in the Situation of Wage Earners
Varða – the labour market research institute – has published a new report on the living conditions of wage earners. The findings reveal a pronounced disparity in the financial circumstances of people in the labour market.
Seven in ten manage to make ends meet, and six in ten could cover unexpected expenses of ISK 100,000 without resorting to borrowing. However, a large share of wage earners live under very tight conditions, with many experiencing real deprivation.
The majority own property and live in their own homes, yet a considerable group is burdened with debt, including overdrafts, car loans, or short-term loans.
Immigrants participate actively in the labour market and, on average, have higher educational attainment than natives. Nevertheless, their incomes are lower, and their financial situation is more precarious.
The report also highlights a clear correlation between income and health. People in low-income households are far more likely to suffer from both poor mental and poor physical health than those in higher-income households.
The study covered nearly 25,000 members of unions affiliated with ASÍ and BSRB, marking the highest response rate to date. This is the fifth consecutive year in which the survey has been conducted.
The full report in Icelandic is available on Varða’s website.