Unemployment in Iceland Expected to Peak in May Skip to content

Unemployment in Iceland Expected to Peak in May

The Directorate of Labor expects unemployment rates in Iceland to peak at 9.6 percent in May and to drop again after that point. According to statistics, unemployment is currently increasing more slowly than at the beginning of the crisis.

A construction site in Iceland in 2004. Copyright: Icelandic Photo Agency.

According to the directorate’s registry of unemployed individuals, 6,441 people were unemployed on November 25, 2008 (3.3 percent), 9,056 on December 17, 2008 (4.8 percent), 12,414 on January 23 (6.6 percent), 2009, 15,796 on February 23, 2009 (8.2 percent) and 17,409 on March 24, 2009 (approx. 9.0 percent).

Karl Sigurdsson, director of the employment division at the Directorate of Labor, told Morgunbladid that so far, the directorate has been notified of one mass layoff in March, at investment bank Straumur-Burdarás that was nationalized earlier this month.

However, Sigurdsson expects another mass layoff to be announced before the end of this month because the Financial Supervisory Authority (FME) took over the board of savings bank SPRON last Saturday and closed all its branches.

The current unemployment rate is higher than it has ever been since Statistics Iceland began registering unemployment in 1980. The previous record was in 1994, when unemployment was 7.5 percent.

Sigurdsson said one of the directorate’s biggest concerns at the moment is whether students will be able to find summer jobs after the current term ends in May.

Sigurdsson explained that the directorate is working on finding employment for this group with municipalities and other employers, but the outcome remains uncertain. He can only hope that a large group of students will not have to register for unemployment benefits.

Click here to read more about unemployment in Iceland.

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