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Unemployment drops faster than predicted

09.07.2021 - 13:46
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 Mynd: Félagsmálaráðuneytið
14,316 people were registered unemployed at the end of June—down by 3,300 since the end of May. At the height of the pandemic, around 20,000 people were unemployed in Iceland.

Iceland’s June unemployment rate stood at 7.4 percent, which was 1.7 percent lower than in May. In two months, 5,700 people have left the unemployment register.

Unnur Sverrisdóttir, head of Vinnumálastofnun (the Directorate of Labour), says the numbers are pleasing: “The reduction in unemployment is historically high. We’ve never seen so many people find work month-on-month before.” 

Unnur says the government initiative 'Hefjum störf' (roughly translated as Let’s get to work) has achieved good results. Vinnumálastofnun has advertised 11,500 jobs through the scheme. The number of new appointments registered in the Directorate’s database is 4,300, and still growing. 

So far this year, 3,400 jobseekers have rejected job offers. The most common reason for rejecting a job is that the person has recently found work elsewhere. People looking for work usually apply to multiple employers. 

The cases of 1,600 job offer rejections have been investigated by the benefits payment department at Vinnumálastofnun, to decide whether job offer rejections are justified or not. 

Nearly a thousand jobseekers have been penalised. Unnur says this number is not surprising, given that around 20,000 people were on the register when the situation was at its worst. Penalties applied are usually a temporary stop to unemployment benefits—though a complete retraction of benefits can be applied in the most persistent cases. Around 50 people have had their right to benefits fully taken away. To get them back, they need to enter into paid employment for long enough to earn the right back again. 

The unemployment rate has dropped in all regions. Unnur says the worst-affected region, Suðurnes, has also seen the biggest bounce-back. In May the region had 18.7 percent unemployment, and by the end of June that had fallen to 13.7 percent. Vinnumálastofnun predicts continued job creation this summer, as the tourism industry continues to get stronger. Unnur says the situation today is better than she expected it would be.

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