ICELAND LABOUR MARKET

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 used to be plenty of jobs in Iceland, of course. This is the one European labour market where there was up to the crash no unemployment to speak of, but now the prospects are pretty bleak. You, as a foreigner, might actually get a job, and the standards of living have gone down. (The unemployment rate used to be less than 2%. which is normal by Icelandic standards! Now the unemployment rate is about 10%. The nation is shocked to experience genuine unemployment for the first time since the Republic was founded...) However, 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 bylaw, they are always negotiated by the unions and the employers' federation. The labour market inIceland. 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 youdirectly, they do not need agencies or other service providers to act as go-betweens.

Activity rate by gender 2008, %
	Total	Male	Female
Total	82.6	87.1	77.7
Source: Statistics Iceland

If you look at the statistics. the activity rate is unusually high among the population of Iceland aged25 to 54, 96% for men and 86% for women. According to the Directorate of Labour, foreign nationals account for9% of the total labour force in Iceland in 2006, or around 17,000. This is unusually high, even for the Nordiccountries. However, without those workers, the inflation would have been 1-1.5% higher than it actually is, ormore than 8%. That would have been tough! (Kaupthing Jan. 2007). Nevertheless, there were 17.000 foreigners working in Iceland 2006 which is almost the same figure as that of unemployed now, or 18.000.

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 cultureshock, that's bound to happen whenever you change places. You must have a work-permitand 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. Infact, 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 securitynumber, 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 thespot, the minute you get your wages. No fuss. Anyway, the standard of livingis high in Iceland.

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