ICELAND LABOUR MARKET

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 Now. why should I want to know anything about the Iceland labour market? Why should I go to Iceland to seek employment? How about an international career?

Why, because there are plenty of jobs in Iceland, of course. This is the one European labour market where there is no unemployment to speak of, and there are huge construction projects ahead, so the prospects are pretty good. (The actual unemployment rate is under 2%. which is normal by Icelandic standards!) Plenty of work ahead, jobs in Iceland for willing workers and the standard of living in Iceland is high and even compared to European countries. 

One of the four fundamental freedoms of the internal market laid out by European legislation is the free flow of workers. This is indeed good news for the Icelandic employers. Icelandic labour market flexibility is the key concept here. There is no such thing as minimum wages bound by law, they are always negotiated by the unions and the employers' federation. The labour market in Iceland. by the way, slightly resembles the one in England (rather than, say, the labour market of France or Germany), while being much more accessible to the foreign employment seeker. Icelandic employers can and will hire you directly, they do not need agencies or other service providers to act as go-betweens.

 

Activity rate by gender 2006, %
	Total	Male	Female
Total	83.1	87.5	78.4
Source: Statistics Iceland

If you look at the statistics. the activity rate is unusually high among the population of Iceland aged 25 to 54, 96% for men and 86% for women. According to the Directorate of Labour, foreign nationals account for 9% of the total labour force in Iceland in 2006, or around 17,000. This is unusually high, even for the Nordic countries. However, without those workers, the inflation would have been 1-1.5% higher than it actually is, or more than 8%. That would have been tough! (Kaupthing Jan. 2007).

 

Labour force by gender and nationality 2005,%
	Total	Male	Female
Total	100.0	100.0	100.0
Icelanders	94.5	93.8	95.3
Foreigners	5.5	6.2	4.7
Source: Statistics Iceland

It is obvious that the construction sector is the one where men will get employed. while women will find openings in the service sector. There are also some geographical variations – some big projects are being carried out in the east, for instance.

 

Population by economic activities and nationality 2005
	Total	Male	Female
Total	100.0	100.0	100.0
Agriculture and fishing	5.1	7.6	2.3
Industry	23.1	34.2	10.9
Services	71.7	58.2	86.7
Icelanders	100.0	100.0	100.0
Agriculture and fishing	5.1	7.8	2.1
Industry	21.8	32.6	10,0
Services	73.1	59.6	87.8
Foreigners	100.0	100.0	100.0
Agriculture and fishing	5.7	5.2	6.3
Industry	46.7	58.3	29.9
Services	47.5	36.4	64.1
Source: Statistics Iceland

There are several things worth bearing in mind when you turn to the Iceland labour market to seek employment. We won't mention culture shock, that's bound to happen whenever you change places. You must have a work-permit and a residence permit. Just remember that you will not be able to do anything at all in Iceland if you have not been provided with an ID-number. In fact, you will hardly be able to buy a theatre ticket. This ID-number serves as a TIN (tax identity number, stated on your tax-card), social security number, bank id. number and what have you… And, of course, you must have one in order to qualify for a working permit.

By the way, the tax-system is very straightforward in Iceland. You pay your taxes on the spot, the minute you get your wages. No fuss. Anyway, the standard of living is high in Iceland.

Social security is another thing worth looking into before making the leap. Fasten your seat belt, then...