The Icelandic economy needs nearly 3,000 new foreign workers each year if it is not going to grind to a halt due to labor shortage. According to data from Statistics Iceland the number of foreign workers increased by 6,000 in 2017.
Read more: Job growth set to continue in 2018: New workers will have to be hired from abroad
With only 2.2% unemployment and the highest labor participation rate in the OECD the Icelandic labor market is unable to meet the demands of a rapidly growing economy. As a result Iceland has relied heavily on foreign workers. The share of foreign nationals in the Icelandic labor market was 9.8% in 2012. In 2017 foreign nationals made up 16.5% of the labor force. The number of immigrants employed in Iceland in 2017 was 32,543 on average.
Most (83.7%) of the foreign workers have a legal residence in Iceland. Statistics Iceland explains that employees not born in Iceland and whose parents and grandparents are not born in Iceland are categorized as immigrants.
More immigrants needed
A spokesman for Business Iceland told the local newspaper Morgunblaðið that an annual GDP growth of 2.5-3% required at least 3,000 new workers. Most will have to come from abroad. The Icelandic economy is projected to grow by 2-3% annually for the foreseeable future. If growth is more robust the need for foreign workers will be even greater.
Wages in Iceland have risen significantly in recent years, at the same time as the Icelandic króna has appreciated. As a result Icelandic wages have increased by 40-50% calculated in foreign currency over a four year period.
The Icelandic economy needs nearly 3,000 new foreign workers each year if it is not going to grind to a halt due to labor shortage. According to data from Statistics Iceland the number of foreign workers increased by 6,000 in 2017.
Read more: Job growth set to continue in 2018: New workers will have to be hired from abroad
With only 2.2% unemployment and the highest labor participation rate in the OECD the Icelandic labor market is unable to meet the demands of a rapidly growing economy. As a result Iceland has relied heavily on foreign workers. The share of foreign nationals in the Icelandic labor market was 9.8% in 2012. In 2017 foreign nationals made up 16.5% of the labor force. The number of immigrants employed in Iceland in 2017 was 32,543 on average.
Most (83.7%) of the foreign workers have a legal residence in Iceland. Statistics Iceland explains that employees not born in Iceland and whose parents and grandparents are not born in Iceland are categorized as immigrants.
More immigrants needed
A spokesman for Business Iceland told the local newspaper Morgunblaðið that an annual GDP growth of 2.5-3% required at least 3,000 new workers. Most will have to come from abroad. The Icelandic economy is projected to grow by 2-3% annually for the foreseeable future. If growth is more robust the need for foreign workers will be even greater.
Wages in Iceland have risen significantly in recent years, at the same time as the Icelandic króna has appreciated. As a result Icelandic wages have increased by 40-50% calculated in foreign currency over a four year period.
