Unemployment has settled into a low groove, indicating a labour shortage and a more powerful bargaining position for workers. Newly released data from Statistics Iceland puts unemployment in Iceland at 2.9% for November 2018.
In a cross-section of residents in Iceland aged 16 to 74, 81% are work eligible, while 19%, or about 47,900 people, are outside the labour market—they do not or cannot work, on account of being disabled, pensioners, or some other reasons.
Of those who are work eligible, 204,700 in all, 198,800 are currently working, while 5,900 or unemployed. In fact, average unemployment has been more or less steady since at least August 2016, while the proportion of residents outside the labour market has been steady for even longer.
All this indicates a labour shortage in Iceland that has been going on for some time. Typically, this gives labour unions a stronger bargaining position when negotiating for wage increases with management. As collective bargaining negotiations are coming up very soon in Iceland, the labour shortage will undoubtedly play a large part in those discussions.