Unemployment Significantly Higher Among Foreigners Skip to content

Unemployment Significantly Higher Among Foreigners

By Larissa Kyzer

Photo: Golli. Worker sawing the pavement next to Tjörnin, the Reykjavík City Pond.

More than 8,800 people were registered as unemployed in January, an increase of 789 people from December, RÚV reports. According to Unnur Sverrisdóttir, the head of the Directorate of Labour, recent downturns in the economy have been particularly hard on foreign nationals.

Unemployment in Iceland was at 4.8% last month, as compared to 3% in January 2019. There has, in fact, been an increase of 3,400 people on the unemployment register in the intervening year. Unemployment is by far the highest on the Suðurnes peninsula in Southwest Iceland, or 9%. The lowest unemployment, or 2.1%, is in the Northwest.

The Directorate of Labour anticipates that unemployment will continue to rise in February, probably to 5% or so.

“It’s a concern that [unemployment] is so high,” remarked Unnur. “This is when unemployment is at its highest – it’s seasonal. Experience shows that in March, April, and May, things start to turn around again.”

“These are people who we brought here to help us during the good times”

All total, 3,386 foreign nationals living in Iceland were out of work at the end of January, representing about 40% of all people who are currently unemployed. Unemployment amongst foreign nationals in Iceland is at around 10% overall. This is a significant increase from the same time last year when 2,080 foreign nationals were registered as unemployed.

“This has been quite the trend for one year, that [the number of unemployed foreign nationals] is always higher than Icelanders. So these numbers are familiar, but of course, it’s a great concern,” continued Unnur. “After all, these are people who we brought here to help us during the good times and it’s a bit strange that they would also be the first people out [of work]. It’s not good to see.”

Unemployment has been on the rise in all sectors over the last year, but the highest increase of unemployed workers was within the construction and transportation sectors.

Unnur says that predictions about less economic growth in the coming year will have a negative impact on the labour market.

“We expect more unemployment this year than last. This is a downturn. This is what we’ve been saying and we’re still saying it now. This is a downturn, but it’s a bit worse than we were hoping.”

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