The Reasons Why Iceland Is So Expensive

iStock.com/Leopatrizi
iStock.com/Leopatrizi

More Americans are taking vacations to Iceland, and many are returning home with sticker shock. According to Iceland Magazine, “consumer prices in Iceland are on average 66 percent higher than in Europe,” with costs in the land of fire and ice outpacing famously expensive countries such as Switzerland, Norway, and Denmark.

Just look at the prices for food in Iceland’s capital of Reykjavík: A pre-made sandwich at a grocery store can cost more than $10, while a single teabag (with “free” hot water) can run you $4. A meal for two at a casual restaurant regularly costs in the ballpark of $80 to $100 while a beer at a pub downtown goes for about $12 during regular hours. In other words: Visiting Iceland is sort of like being trapped in an airport ... except this airport has volcanoes.

As for what makes the country so expensive, there’s no single explanation. It’s a combination of politics, economics, and geography.

Let’s start with geography. Since Iceland nearly tickles the Arctic Circle, its climate is not conducive to farming. There are few native crops and the growing season is short. According to a report from the European Consortium for Political Research [PDF], Icelanders produced “64.9 percent of their own food and beverages in 2010.” The rest of that food was imported. The same goes for most other goods.

The cost of importing those products—usually from the UK, Germany, the U.S., and Norway—gets passed on to the consumer. In Iceland, imported sweets and alcohol are slapped with an extra cargo fee and all wheat products are subject to a relatively high tariff. So prepare to shell out for that bread.

The country’s currency also keeps costs high. In 2008, Iceland was plagued by a financial crisis that saw the country’s three banks fail and the value of the national currency, the króna, plummet. But the country has seen a miraculous recovery. Since 2009, the króna has strengthened by a whopping 40 percent against the euro. In 2017, it was deemed the world's best-performing currency. That has caused the purchasing power of the U.S. dollar to decrease.

Taxes also add to the cost. Like most countries, Iceland has a valued-added tax, or VAT. (In the United States, a close equivalent would be the state sales tax.) The VAT for goods in Iceland is 24 percent, while the VAT for foodstuffs is taxed at a discounted rate of 11 percent. For Americans, these tax rates are very high. Most states don’t even charge a sales tax on food at all.

(However, while taxes are a contributor, they are not the cause of high costs in Iceland. Many countries have similarly high VAT rates and are not as expensive. Germany, for example, has a 19 percent VAT—and a 7 percent VAT on foodstuffs—but is home to significantly cheaper groceries than those sold in the United States. It’s also important to know that, as an international visitor, you can get some of your VAT refunded.)

Rather, the biggest contributor to costs in Iceland is the country’s high standard of living. In Iceland, the average pre-tax income is about $60,000, with a median income of about $47,000. (In the U.S., the average income is about $48,150 with a median of around $31,000.)

In Iceland, approximately 92 percent of the country’s working population is part of a labor union. Consequently, people who work jobs that Americans might consider “low-wage”—especially jobs in the service industry—earn much higher wages and enjoy more benefits. In fact, the national monthly minimum wage for most industries is 300,000 ISK, or about $2500 per month. That’s equivalent to $15 an hour. But since employees earn more, customers generally pay more for goods.

And, of course, any tourist complaining about high prices should take a moment to point a finger at the mirror. Since 2010, Iceland has seen tourism multiply fivefold. With a growing number of people competing for a limited supply of goods, prices have continued to rise; the dastardly supply and demand curve strikes again!

The New Apple Watch SE Is Now Available on Amazon

Apple/Amazon
Apple/Amazon

Apple products are notorious for their high price tags. From AirPods to iPads to MacBooks, it can be difficult to find the perfect piece of tech on sale when you are ready to buy. Luckily, for those who have had their eye on a new Apple Watch, the Apple Watch SE is designed with all the features users want but at a lower starting price of $279— and they're available on Amazon right now.

The SE exists as a more affordable option when compared to Apple's new Series 6 line of watches. This less expensive version has many of the same functions of its pricier brethren, except for certain features like the blood oxygen sensor and electrical heart sensor. To make up for the truncated bells and whistles, the SE comes in at least $120 cheaper than the Series 6, which starts at $400 and goes up to $800. The SE comes with technical improvements on previous models as well, such as the fall detection, a faster processor, a larger screen, water resistance, and more.

Now available in 40mm ($279) and 44mm ($309), both SE models offer a variety of colors to choose from, such as sliver, space gray, and pink. If you want cellular connection, you’ll have to pay a bit more for the 40mm ($329) and the 44mm ($359).

For more, head to Amazon to see the full list of offerings from Apple.

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Aruba Is Inviting People Who Work From Home to Work From The Beach Instead

Choose your new cubicle.
Choose your new cubicle.
fmbackx/iStock via Getty Images

If you’ve spent the last six months staring at the same patch of wall in your makeshift home office, you might be entertaining fantasies about working from a sparkling, sunny beach instead. Aruba wants to help you bring those fantasies to life.

As Travel + Leisure reports, the Aruba Tourism Authority has launched “One Happy Workation,” a program encouraging people to work remotely from the Caribbean island for as long as three months (though there is a possibility the time limit will get extended). Basically, the organization is offering discounted deals on accommodations to make a long-term stay more affordable. As for what exactly that stay looks like, it’s completely up to you. If you’re interested in a traditional vacation experience, you can opt for a hotel or an all-inclusive resort; or, if you’re hoping to really make yourself at home, there are plenty of private villas, condos, and townhouses to choose from.

While specific amenities and activities—snorkeling, local mixology courses, and grocery delivery, to name just a few—vary by residence, every place is equipped with Wi-Fi, so you can submit reports and send emails from the sunniest corner of your temporary abode. That said, you’re not obligated to stay inside while you work; there are also free Wi-Fi zones around the island. In fact, you don’t actually have to work at all—feel free to leave your laptop at home and take that long-awaited sabbatical.

Since you’d technically still be considered a visitor, you won’t be permitted to work for any Aruban company (unless you secure a work or business permit). And although you won’t need a visa to enter the country, you will need negative COVID-19 test results. When and where you can take that test depends on where you’re coming from. Visitors arriving from some states are allowed to take a test as soon as they land in Aruba, while others must test negative within three days of departing home.

If three months isn’t quite long enough to satisfy all your work-from-beach hopes and dreams, Barbados’s special 12-month visa might be an even better fit.

[h/t Travel + Leisure]