Youth unemployment: Iceland fights on many fronts

Iceland has limited resources to fight unemployment, leaving youths, graduates and others who haven't already been in work very vulnerable. The authorities have allocated hundreds of millions of Icelandic kronor for measures to remedy the situation.

“Without this kind of support programme I would not have had any work at all this summer, which would have been very difficult," says 28 year old Sólrún Traustadóttir. The single mother from Reykjavik studies practical culture brokering at the University of Iceland.

State wage subsidy

Ms Traustadóttir is an archaeologist by profession and was sure she would have to find work as a shop assistant because of the cutbacks in archaeological jobs.

"I didn't think I'd find any jobs within my profession. I wasn't even sure I'd find a job at all because employers prefer younger people for summer jobs who accept lower wages."

Ms Traustadóttir was hired to work on one of Iceland's largest archaeological sites, the Hólar project in the north of the island. Her job is to analyse finds from the dig, and it is part of a state-sponsored programme.

“I could not have hired her if the state didn't pay her salary," says Ragnheidur Traustadóttir, who heads the Hólar projektet. 

“I have far fewer salaried posts compared to before because of the economic situation - just ten people, including three who are partly paid for by the state."

The programme helps fund casual work for 856 people - students and job seekers. The jobs run from six weeks up to six months. Many businesses and organisations take part in the subsidy programme and help find jobs, contribute materials and and help with the allocation of work. The state covers salary costs out of a 250 million (€1.6m) fund. Sólrún Traustadóttir is very satisfied. 

“The alternative was no work at all.”

Youth action

Iceland's unemployment stands at just above eight percent. Despite a slight drop over the past few months, it is still eight time higher than what the Icelandic are used to. 16.4 percent of all 16 to 24 year olds are unemployed. 

The Ministry of Social Affairs have launched a campaign for young unemployed called "Youth Action", targeted at all job seekers under 25. The campaign aims to offer jobs or other employment for all young job seekers no later than three months after they lost their previous job. 

The state contribution is 1.3 billion Icelandic kronor (€82.6m).

"At the start of the initiative there were 3,000 unemployed youths. Most of them, some 2,000, lived in the capital area," says Hrafnhildur Tómasdóttir from Iceland's Labour Administration.

Ms Tómasdóttir says all youths who had been unemployed for three or more months had been offered some kind of employment on 1 April this year. The programme runs in cooperation with and has drawn on the resources of colleges and other educational institutions, voluntary organisations, municipalities, businesses and medical institutions in cases where illness has been a contributing factor to unemployment. 

"We have already managed to offer alternatives for young job seekers who have been out of work for no more than one to two months."

Many young job seekers have left their college education early, and experience shows this is the weakest group to enter the labour market. 

"The number of early school leavers is large and is one of the greatest threats to our society, and we must do something about it. Education is everything when it comes to accessing the labour market and for social status."

One of the campaign's aims is to offer an education to the young unemployed who lack necessary formal education. Ms Tómasdóttir sees this as an investment which improves young job seekers' chances in the labour market, and gives them more to choose from. She feels this is also a good investment for the whole of society. 

A job doesn't only bring home the bacon. It links a person to his or her social surroundings, encourages new personal contacts and builds self reliance and independence. 

"On that basis a job should be a right, because it gives life meaning and helps fulfil basic psychological, social and economic needs."

Ms Tómasdóttir says it is too early to look at the long-term impact of the campaign. But already some 90 percent of all young job seekers in Iceland have been offered counselling and job training as a result of the project. 

Thengill Sævar Halldórsson, a 39 year old single father of three, represents a large group of men with limited education who are dependent on unemployment benefits.

He took up an offer from the state to finish his journeyman's certificate as a bricklayer.

"I have been applying for jobs even though that is not a prerequisite while I am studying," he says. 

"I can barely survive on the benefits. Nearly 70 percent goes to paying the rent so there is very little left when my children come to stay at weekends."

He has had few jobs since the October 2008 bank collapse, and has applied for some 70 jobs or projects with no luck. A tattoo on his arm reads 'I still believe in God but God no longer believes in me'. 

"Sometimes you become so depressed and tend to forget about yourself and others, sleep until midday, leave the dishes and washing and only eat fastfood - when you can afford to. I've got my children to thank for not going crazy."

Mr Halldórsson says he is happy he's allowed to study and hope to get back into the labour market as soon as possible. He is 7 million Kronor (€44,500) in debt after defaulting on a car loan.

"I don't pay any bills but my rent," he says. "I could get a job in Canada, tiling. But to travel there is expensive, and I wouldn't be able to see my children.”

Resources for municipalities and institutions

Last winter municipalities and institutions together with Iceland's Labour Market Administration launched a jobs creation project.

"It's been a success," says Gylfi Arnbjörnsson, head of Iceland's Confederation of Trade Unions. But he is highly critical of the unemployment benefit rules, which he feels are not adjusted to reflect today's reality. (See separate story on the outdated benefit system).

Kópavogur is Iceland's largest municipality after the capital Reykjavik. It has created between 60 and 80 new jobs exclusively for those drawing unemployment benefit. The municipality financed the gap between the unemployment benefit - which was still being paid out - and the collectively agreed wage.

"In many instances this led to people feeling they had broken out of their isolation and it encouraged them to take the next step," explains Thorsteinn Einarsson, head of personnel in Kópavogur. 

“Many of the long-term unemployed did not stay with the programme for long, but found full employment somewhere else. That makes us very happy."

Kópavogur also hired two consultants to help under-18s - who cannot draw unemployment benefits - find work during the summer. 

"They were for instance offered jobs in the town hall like sorting out the archive and other document organisation. We could also offer a lot of outdoor work. The recruitment varies but can last for up to three months," says Páll Magnússon at the municipality. 

"We hired between 800 and 900 youths, in fact everyone who applied."

Saving themselves

In the neighbouring municipality Garðabær some young people took matters into their own hands. 19 year old Bergný Ármannsdóttir says she did not want to be left with nothing to do. She and fifteen friends convinced the municipal administration to pay the going rate for youth workers for doing creative summer jobs. "We have all signed a job contract with the municipality and work from 10am until 5pm. I take photographs and do equality training. We have three music groups, one group for fashion design, one drawing group and one poetry group. The pay isn't great but that doesn't matter as long as we're working with something we enjoy. And you can't take that for granted these days."

Bergný supplies her income by working evenings in a cafébar.

"I am lucky, even though my working day can be long. I work until 5pm in Garðabær before going to the bar to work from 6pm until 1am. But I'm not complaining. The alternative would be to plant trees or some such. That's not for me. I could also have not gone to work and spent my days in front of the computer. I consider myself lucky.”

Bergný plans to take further education once she leaves college. 

"I fancy studying abroad, but that would be hard without any money. I think I will apply to study psychology at the University of Iceland. I think that is a subject which will come in handy in the future."