Deep North Episode 67: A Different Story

Karitas Hrundar Palsdottir

Icelandic, it is often said, is an impossible language to learn. Beyond the the cases and declensions, however, lies a simple fact – there are not many resources for learning the language. Karítas Hrundar Pálsdóttir is trying to change this with a series of books aimed at adult learners of the Icelandic language.

Read the story here.

Icelandic Government Invites Immigrants to Shape Policy

Iceland’s Ministry of Social Affairs and Labour is inviting immigrants to participate in shaping policy on integration and inclusion. The ministry is inviting immigrants in Iceland to an open consultation meeting in Reykjavík this Wednesday, February 28. Polish and English interpretation will be provided at the meeting.

Last November, the government of Iceland published its first-ever “green paper” on immigrant issues. The document is a status assessment on immigrant and refugee issues in Iceland and identifies opportunities and challenges for the future. The green paper has been published in Icelandic, English, and Polish, a first for the Icelandic government.

First-ever comprehensive integration policy in the works

As a follow up to the green paper, the Icelandic government will work on a white paper on immigrant issues. This will serve as the first draft of the country’s first-ever comprehensive policy on immigrant and refugee issues. The white paper will be developed into a parliamentary resolution on immigration and refugee policy.

Immigration brings large economic benefits

The most recent OECD Economic Survey of Iceland found that immigration in Iceland is rising faster than in other Nordic countries and that it brings large economic benefits. The median age of immigrants in Iceland is lower than in any other OECD country, at between 30-35 years, and their participation rate is higher than in any other country, at over 85%. The survey emphasised that Iceland should step up its efforts to help immigrants integrate, such as through better access to services, addressing housing needs, and establishing more effective language training courses.

To gather data for the white paper, the Ministry of Social Affairs and Labour has already held focus group meetings around the country, and the discussions from this Wednesday’s meeting will be integrated into the paper as well.

This Wednesday’s meeting in Reykjavík will take place at 5:00 PM at Hotel Reykjavík Grand.

Are there communities for expats in Iceland?

hallgrímskirkja reykjavík

First, a word of advice: for those considering moving to Iceland, or for those who already live here, there’s much to be said for learning the language and integrating into the community. We recommend seeking out opportunities to speak Icelandic where possible, as living as part of the community will likely make your stay in Iceland much more rewarding.

That being said, we recognize that there’s a time and place for wanting to socialize with people from home, or else just a more international milieu.

Many of the major social media sites will have what you’re looking for.

On Facebook, there are two large communities for expats in Iceland: Away from Home – Living in Iceland, a private group, and The Expats’ Lounge Iceland, a public group. Both communities are relatively large and active, and are a good place to look for events such as pub trivia nights and meet-and-greets, as well as more practical information concerning visas, education, childcare, and more.

While neither of these communities are explicitly oriented towards expats in Iceland, Reddit also hosts two large communities centred around Iceland. The community r/Iceland focuses on Icelandic residents and is therefore mostly in Iceland, but many foreign residents also post and discuss current events, ask questions, and so on. The community r/VisitingIceland is geared towards tourism, but many lifelong visitors and foreign residents also use the community.

All Things Iceland is the website and podcast of a notable expat living in Iceland. Many foreign residents have found her content useful, so this may be a good place to begin looking for expat communities in Iceland as well.

There are also several YouTubers who talked about their experiences living in Iceland as an expat.

There’s no one way to become a member of an expat community in Iceland, but some of these resources may serve as a beginning point for your research. In addition to these resources, it bears mentioning that those who work for more international employers may find community through their job, and parents may also find communities through connections to other families through their preschools, for example.

Future (or current) expats may find our guide to house- and job-hunting in Iceland useful.

Foreign Citizens in Iceland Face More Difficulties Finding Jobs

Reykjavík restaurant workers

Foreign citizens make up nearly 50% of those currently unemployed in Iceland, while they only make up 15-20% of the population, RÚV reports. This overrepresentation shows that foreign citizens in Iceland face additional obstacles when it comes to finding work, says Katrín Ólafsdóttir, assistant professor of economics at Reykjavík University.

Language skills not the only explanation

The overrepresentation of immigrants on the unemployment register is not new. It was also the case throughout the COVID-19 pandemic. In 2021, Gundega Jaunlinina of the Icelandic Confederation of Labour (ASÍ), stated it is often more difficult for unemployed foreigners to find work than for Icelanders. “Because people may not be as active in their job search and don’t know exactly where they should look and employers are unfortunately less likely to hire foreign workers,” she stated.

“It seems that Icelanders have priority, to some extent, when it comes to jobs,” Katrín Ólafsdóttir observes. “But why that is, I don’t know. This is something that I think we need to take a closer look at, what is going on there. Possibly it has to do with Icelandic language skills, or something like that. But that can’t be the only reason.”

High participation rates but little support

While foreign citizens are overrepresented on the unemployment register, immigrants in Iceland have very high economic participation rates. The latest OECD Economic Survey of Iceland found that of all OECD countries, immigrants in Iceland had the highest participation rate, at over 85%. The survey emphasises that Iceland should step up its efforts to better integrate migrants and their children, including through more effective language courses, skills recognition, teacher training, and meeting immigrants’ housing needs. Other recent labour market studies have also called on authorities to ensure immigrants’ job security and mental health.

The OECD survey also found that immigration brought large economic benefits to Iceland’s economy, something Katrín underlines as well. She asserts that Iceland would not have experienced as much economic growth in recent years if it had to been for the influx of foreign workers onto the labour market. “We would never have been able to support the increased service to tourists without more helping hands,” she stated.

Unemployment low in general

Unemployment in Iceland is relatively low, with the seasonally adjusted unemployment rate standing at 3.3% in August 2023 according to figures from Statistics Iceland. The unemployment rate decreased by 0.2% between months while the employment rate increased by 0.9% and the activity rate by 0.8%. In total, some 7,600 people were unemployed in August of this year. Iceland’s population is 387,758.

Iceland Must Tackle Inflation and Make the Most of Immigration

Iceland’s economy is currently one of the fastest growing in the Organisation for Economic Co-operation and Development (OECD). Foreign tourism and strong domestic demand are the reasons for this growth, but it is expected to slow, according to the latest OECD Economic Survey of Iceland. The OECD recommends that Iceland’s policy continue to focus on bringing down inflation, strengthening productivity growth by improving the business climate, and helping migrants integrate.

“Iceland has rebounded strongly from the pandemic and has proven resilient in the face of the economic impact of Russia’s war of aggression against Ukraine across Europe and globally,” OECD Secretary-General Mathias Cormann said when he presented the survey in Reykjavík alongside Minister of Finance and Economic Affairs Bjarni Benediktsson. “Continued monetary policy and fiscal policy tightening remain necessary to return inflation to target and properly anchor inflation expectations. Establishing a one-stop to simplify access to migrant integration services, including skills recognition and Icelandic language literacy, will help to optimise the beneficial impact of the increased number of migrants on long-term growth.”

Inflation to decline but persist

Inflation has remained persistent in Iceland despite efforts to tackle it, including consistent interest rate hikes by the Central Bank. According to the OECD survey, it is projected to decline but still exceed 3% by late 2024. Economic growth is expected to moderate from 6.4% in 2022 to 4.4% in 2023 and 2.6% in 2024, according to the OECD. There are indications that Iceland is reaching its capacity for tourism, and as the industry levels off, household consumption is expected to slow and real wages to continue to weaken.

Reforms to business climate recommended

The OECD survey found barriers to entry for domestic and foreign companies to be relatively high in Iceland, despite progress in tourism and construction. It suggested structural reforms to improve the business climate, such as easing the overreaching system of licences and permits and investing in skills relevant to the labour market. Such reforms would reinvigorate productivity, which has been trending upward by only about 1% yearly, and would help with the fight against inflation, according to the OECD.

Aging population a risk to debt sustainability

When it comes to public expenditure, the survey emphasises that spending on health and long-term care is expected to rise considerably as the population ages, although from a lower base than in almost any other OECD country. The survey recommended reforms such as lifting the retirement age and reducing tax expenditures to slow the build-up of debt.

Better integration of migrants required

Figures from the OECD survey show that immigration in Iceland is rising faster than in other Nordic countries and that it brings large economic benefits. The median age of immigrants in Iceland is lower than in any other OECD country, at between 30-35 years, and their participation rate is higher than in any other country, at over 85%.

The OECD survey emphasises that Iceland should step up its efforts to better integrate migrants and their children, such as by establishing a one-stop shop for services, which would make language training courses more effective and would ease skills recognition. More support is needed for students with immigrant background, including more teacher training in multicultural education.

“Successful integration also requires meeting the housing needs of the immigrant population, including through increasing the supply of social and affordable housing,” the OECD press release on the survey states.

An overview of the survey including findings and charts is available on the OECD website.