Demand for Foreign Labor in Iceland Remains

Iceland’s Directorate of Labor has registered more workers from the EEA countries in the first quarter of this year than in the first quarter of 2007. This increase comes as a surprise because the directorate thought demand for foreign labor was decreasing.

Vilhjálmur Egilsson, managing director of the Confederation of Icelandic Employers (SA), was also under this impression. “Our feeling was that available jobs in Iceland are decreasing and demand for foreign labor as well,” he told Fréttabladid.

According to Baldur I. Adalsteinsson, project manager for the Directorate of Labor, 130 temporary work permits were issued during the first three months of 2008, the same amount as during the same period in 2007. Last year, most of the work permits were related to large-scale industrial projects, but this year there were only two such permits.

“It tells us that there is still great demand for labor in the general employment market,” Adalsteinsson said. “I believe the main explanation is low unemployment, but we expect the unemployment rate to rise.”

Adalsteinsson added that another explanation might be the Directorate of Labor’s increased supervision of work places to make sure foreign laborers are registered. Perhaps not every worker was registered last year and thus went unnoticed.

“Lately we have been visiting restaurants and clubs in the capital region in cooperation with the police to review registrations and the work permits of workers,” Adalsteinsson said.