Kære nordiske venner –

First of all, let me welcome you all to Iceland.

I´m glad that you get the opportunity to meet and discuss issues of young people in the trade union movement both within the Nordic countries and internationally.

There are indeed huge challenges that we face on the labour market, for example relating to technological change and climate change. On top of that, we have the covid-19 pandemic, which is the focus of your meeting here in Reykjavík.

The pandemic has impacted the labour market in two major ways.

First, employees were not able to go to their workplaces because of restrictions or lockdowns. In April 2020, for instance, the share of the world’s employees living in high-income countries with mandatory or recommended workplace closures reached 70%.

Second, many sectors had to reduce their activities due to a drastic change in demand and interruptions to supply chains and logistics. Some sectors have also been affected by other problems during the pandemic, including shortages of important metals and semiconductor materials and a rapid readjustment of certain industries, such as distilleries that started to produce hand sanitiser and hotels that became quarantine centres.

Due to these factors, unemployment rose rapidly at the beginning of the pandemic. In fact, the pandemic has been described as the most severe global crisis since the Second World War with “deep, far-reaching and unprecedented” employment impacts. In many Nordic and other European countries, measures were put in place to mitigate the labour market impacts of the pandemic in the form of job retention and furlough schemes. Not withstanding these measures, the unemployment rate went up in many countries and regions.

In comparison to more traditional economic crises, such as the 2008 financial crisis, the labour market effects of the Covid-19 pandemic have been far more selective and highly unequal between and within countries.

As estimated by the OECD in 2020, vulnerable groups in the labour market have been the most affected, including young people, women, people with low levels of educational attainment, immigrants and atypical workers.

As you know, atypical work is defined as an employment arrangement that does not follow the standard model of indefinite full-time employment. Many individuals in these groups work in sectors that were badly affected by the pandemic, and young people and immigrants often work on temporary contracts that were not renewed when the pandemic broke out.

Due to preschool and school closures in many countries, many households have also experienced unequal distribution of paid and unpaid work replicated along gender lines since women have been taking care of home-schooling to a greater extent than men (Lind and Gunnarsson, 2021). In Iceland, emphasis were put on keeping preschools and schools open for the entire time.

For Iceland, our economy is relatively undiversified and relies heavily on the tourism industry, which suspended a large part of its activities during the pandemic. This factor made the Icelandic labour market particularly vulnerable to external shocks.

At least some of the lost job opportunities may return relatively quickly after the pandemic since many of the affected sectors are not in structural decline (tourism and the service sector). Instead, some of these sectors have been experiencing labour shortages during 2021 as many previous employees in these sectors have retrained and found more stable jobs in other sectors or in their home countries (in Poland or the Baltic states) as a direct consequence of the pandemic.

Before the onset of the Covid-19 pandemic, the highest unemployment rates in the Nordic Region were in Finland and Sweden, particularly for immigrants born outside the EU27 countries, people with low levels of educational attainment, and young people aged 15-24. When examining changes in unemployment rates, it seems that Finland and Sweden have also been the countries most affected, followed by Iceland.

However, when looking at the more long-term indicator of the employment rate, the changes are relatively small in the Nordic countries.

Particularly at the beginning of the pandemic and in the manufacturing, tourism and transport sectors, generous short-term furlough schemes played a crucial role in mitigating the effects of the pandemic on the labour market. The accommodation and food-service sectors were particularly affected in the Nordic countries, followed by transport and the arts.

Compared to the economic crisis in 2008, both previous research and the latest statistics indicate that the labour market recovery is likely to be faster after the Covid-19 pandemic. However, it is recommended that attention is paid to particular risk factors in the Nordic Region

Iceland did not develop a special youth strategy action plan in response to Covid-19 crisis but certain initiatives aimed at young people on the labour market were made specifically.

Overall, measures that have been taken in response to the Covid-19 crisis apply equally for all age groups of working age.

In the second phase of the Governments’ measures to stimulate economic growth due to the COVID-19 pandemic the Government decided to dedicate ISK 2.2bn to create 3,000 temporary summer jobs for students aged 18 and over for the summer of 2020. Furthermore, it was decided to use ISK 300m to support innovation among young entrepreneurs through the Icelandic Student Innovation Fund. Another ISK 800m was decided to use to support a summer school term at upper secondary schools and universities, for the benefit of both students and workers on full or partial unemployment benefits. 

“Nám er tækifæri”, or “learning is an opportunity” is a campaign for jobseekers who have been on the unemployment register for 6 consecutive months or more and want to strengthen themselves by participating in studies or improving their studies, or gives jobseekers the opportunity to be in full-time study for one semester whilst receiving unemployment benefits. This measure is available for all age groups in the spring and autumn semesters in 2021 and in the spring semesters of 2022.

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Now, looking towards future, there are two major challenges ahead of us. Firstly, technical developments with its comprehensive changes on jobs and secondly the green transition which will influence all our activities in the coming years. These challenges have to be met with the vision of just transition.

Shortages of labour are emerging as an issue in some sectors and some regions. While some of this is due to the pandemic, several shortages started before the pandemic, for instance, in relation to the green and digital transitions.

The fact that the vulnerable groups such as young people, immigrants and people with low levels of educational attainment have been particularly affected by the impacts of the pandemic on the labour market – especially in Sweden and Finland – may further exacerbate inequality and socio-economic insecurity in the Nordic Region. If not addressed in a proper and timely manner, these risks may combined pose a threat to the Nordic welfare model in the near future.

Again, I welcome you all to Iceland.

And last but not least I wish you all the best for the future and a fruitful discussion during your stay in Iceland.