Read news from:
Austria
SHARE
COPY LINK
For members

JOBS

Should workers in Norway be worried about a rise in unemployment

Unemployment in Norway has recently risen to its highest level in over two years, figures from Statistics Norway show, with some industries more heavily affected than others.

Published: 27 February 2024 12:05 CET
Workers
As unemployment rates climb, workers may understandably worry about job security. Photo by Jon Tyson on Unsplash

Unemployment in Norway is on the rise, and 3.9 percent of the country’s workforce was unemployed as of January, according to the latest figures from the national data agency Statistics Norway (SSB).  

Some 117,000 people were out of work, the figures released this week show. That marks a notable increase of 2,000 unemployed people compared to December.

READ MORE: What kind of jobs do immigrants in Norway have?

As the unemployment figures presented by Statistics Norway have been adjusted for seasonal variations and trends, the increase cannot be explained by typical seasonal patterns.

Of particular note is the demographic breakdown, revealing that much of the rise in unemployment is concentrated among men aged 25 and over.

“Approximately two-thirds of last year’s increase in unemployment was among men,” Tonje Køber, the section head for labour market and wage statistics at Statistics Norway, said.

As unemployment rates climb, workers may understandably worry about job security and the overall health of the job market in Norway.

But what’s behind this job market cooldown?

Construction sector slowdown driving the unemployment hike

Some of the increase in unemployment figures can be attributed to the poor situation in the Norwegian construction industry, Kristian Myklathun, a senior advisor in the Norwegian Labour and Welfare Administration (NAV), told The Local.

“In the past year, we have witnessed a rise in unemployment among individuals with a background in construction work. The slowdown in new construction projects is closely linked to increased construction costs and interest rate hikes. The interest rate increases contribute to the heightened cost of capital and also have a dampening effect on housing prices,” Myklathun said.

READ MORE: Six ways to improve your chances of finding a job in Norway

He added that the retail sector and certain service industries have also recently seen unemployment rise. Myklathun said this was due to slow wage growth and increased interest rates. 

Unemployment expected to increase further

NAV believes that Norway’s unemployment rate will likely increase in the coming year. The increase will primarily be seen in the construction sector. 

“The primary factor behind this expectation is the limited number of new construction projects, which is anticipated to lead to increased unemployment in the construction sector in 2024,” Myklathun

He added that unemployment in retail and certain service sectors will experience a short-term increase in unemployment before stabilising over time.

Erik Horgen, a senior adviser at Statistics Norway, told The Local that their current forecast for 2024 is an unemployment rate of 3.9 per cent and 4.1 per cent for 2025.

For the majority of workers, this means a huge increase of unemployment from current levels isn’t to be expected.

However, NAV also publishes its own figures, which are separate from those from Statistics Norway, and it will publish its figures on Friday, March 1st.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

WORKING IN NORWAY

Why overqualified foreigners in Norway struggle to find work

Norway is one of the worst countries in Europe when it comes to overqualified foreign labour being stuck in jobs that don’t make the best use of their skills, a new analysis has found. 

Published: 23 April 2024 11:38 CEST
Why overqualified foreigners in Norway struggle to find work

Norway is one of many European countries struggling with “brain waste”, which is where immigrants struggle to find suitable full-time work or are overqualified for their roles due to their education not being recognised. 

The findings are part of an investigation by Lighthouse Reports, the Financial Times, El País and Unbias The News that found that most European countries fail to provide good job opportunities to educated foreigners – potentially at the cost of their labour forces and economies. 

“While the results differ slightly between labour market outcomes, a consistent pattern emerges: immigrants lag behind natives everywhere, but brain waste is worst in Southern Europe, Norway, and Sweden,” the report read. 

Some of the metrics used to measure brain waste were the proportion of foreign residents who were overqualified for their role, underemployed (meaning they weren’t working as much as they could), or unemployed. 

In Norway, 27.6 percent of university-educated Norwegians were overqualified for their roles, according to the report. Meanwhile, just over half of the university-educated immigrant population were overqualified for their job. 

This figure made Norway one of the countries with the largest raw difference in the percentage of the native population being overqualified compared to the immigrant population. 

Furthermore, the number of immigrants who were underemployed, 3.9 percent, was more than double the rate of Norwegians in the same position. 

The investigation used figures from Eurostat between 2017 and 2022. 

Norway’s Directorate of Integration and Diversity has recently investigated the obstacles facing the country’s foreign population in the workplace. 

Its report found that immigrants faced barriers both when trying to progress their careers or simply trying to get their foot in the door. 

Immigrants working in Norway were also more likely to leave working life earlier or lose their jobs. 

READ ALSO: The biggest barriers foreigners in Norway face at work

Factors such as working in temp positions, physically taxing occupations, and industries exposed to economic turbulence contributed to this. 

However, a lack of Norwegian proficiency, a lack of relevant skills and poor health also played a part. 

Discrimination prevented immigrants from entering the workplace and affected those who were employed. 

“More and more people in the population have contact with immigrants in working life, and most experience that contact as mainly positive. At the same time, one in four immigrants has experienced discrimination in the workplace, and this discrimination can occur in different forms and in different working situations,” the report read.

The directorate also said that most companies didn’t have concrete measures to try and promote diversity.

One factor holding back immigrants in Norway was their Norwegian language skills, the report said. 

While Norwegian skills were moving in the right direction, less than half of foreigners in the country had advanced Norwegian language skills (level B2 according to the European framework) after completing language training.

Meanwhile, Lighthouse Reports’ investigation found that brain waste in Norway varied from profession to profession. For example, Norway was one of a number of countries where college-educated immigrants were more likely to be doctors. 

Immigrants with a university education in IT-related subjects were also far less likely to be overqualified. There, the difference between migrants being overqualified compared to natives was just 2 percent. 

However, physical and engineering science technicians, engineering professionals (excluding electrotechnology), and those who have studied education at a university level were the immigrant groups in Norway most likely to be overqualified. 

One thing to note is that immigrants who obtained their qualifications in Norway were far less likely to be overqualified than those who got their degrees outside of Norway, even if they still fared worse than natives overall. 

SHOW COMMENTS