Iceland - Working conditions

In the 20th century, 2 societal trends affected the Icelandic labor market: higher participation of women and changes in education. More women of all ages—many highly educated—entered the labor market. On the average, though, women still earn less money than men do.

Unemployment is extremely low in Iceland, a trend that does not seem to be changing. One of the downsides of Iceland's low unemployment is that it has created an extremely tight labor market and most Icelanders have very long workdays, some of the longest in Europe. In 2000, the unemployment rate registered at 1 percent, and in October 2000 it reached its lowest level since 1988 at 0.6 percent. Accordingly, there is a high demand for labor, especially in Reykjavík, though less so in the rest of the country. To meet labor demands, the government allowed for an increase in the number of work permits issued to foreigners. Despite the demand for labor, wage increases have been slow to rise.

About 8 percent of Icelandic workers belong to unions. The Industrial Relations Act of 1938 gives workers the right to form unions open to all persons working in a particular trade within a district. For example, carpenters are allowed to form unions in their own home-town or city to ensure their employment rights are being met and protected.