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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.

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OSLO

Is Oslo’s project to speed up work permits on track?

The City of Oslo aims to cut work permit processing times in the capital down from nine months to just three days. The Local has contacted authorities to update readers on the latest developments.

Published: 6 May 2024 10:09 CEST
Is Oslo's project to speed up work permits on track?

For years, Norway has been grappling with a shortage of skilled professionals, notably in the technology and IT sectors.

Recognising the need to address this talent gap, The City of Oslo and other partners launched a pilot project in 2023 called Kompetansespor (Competence Track).

The primary goal was to reduce the lengthy wait times for skilled workers to get work permits from around nine months to three days.

READ ALSO: What’s next for Oslo’s plan to slash work permit waiting times?

But what is the current status of the project? And is the new super-fast work permit process any closer to becoming a reality?

How the project has evolved in 2024

Since its inception, Competence Track has evolved into a more ambitious project that goes beyond just cutting work permit times.

The project’s focus has shifted towards new goals, which mostly revolve around exploring the use of a “digital wallet” to streamline the immigration process.

To make this happen, partners involved in the project, such as the Norwegian Directorate of Immigration (UDI), will collaborate with other key stakeholders from the governmental, municipal, and private sectors.

READ MORE: How Norway’s permanent residence rules have been tweaked

As the UDI explains in a document seen by The Local, a digital wallet refers to “an electronic application or platform that allows users to securely store, manage, and share digital identity credentials and other types of digital data,” which plays a “central role in handling digital evidence or verifiable credentials in a digital ecosystem.”

The wallet allows relevant authorities to access the holder’s paperwork, rather than having documents and credentials stored separately across several portals. 

New goals

The main aim for 2024 is to develop and explore an efficient and user-friendly process flow that can support the immigration of skilled workers to Norway.

According to a document that the Norwegian Directorate of Immigration (UDI) shared with The Local, other goals for the year include creating a prototype to test the efficacy of the digital wallet in improving immigration processes, investigating the feasibility of pre-qualifying employers to speed up the immigration process, and showcasing how collaboration across sectors can create better services for users.

The project remains committed to reducing administrative burdens, processing times, and information exchange accuracy, as well as preparing Norway for future challenges related to global mobility and digitalisation.

Meanwhile, the Oslo Business Region writes on its website that additional target groups such as students and family members of work permit applicants would be included in the fast track residence permit scheme. 

From the information available at the time of writing, it seems that project will still revolve around Oslo.

Gustav Try, an advisor at the Norwegian Directorate of Immigration (UDI), told The Local that the UDI’s Department of Managed Migration is currently working on a new test phase called “Pilot 2.0”.

“We are currently working on Pilot 2.0, but it is not finalised. The plan is to pilot it on selected students at the University of Oslo (UiO) in August. We are also considering piloting it on skilled workers, including UiO employees, throughout the autumn,” the department said.

Back in September, Thea Ullhaug Pope, senior content developer for the City of Oslo, told The Local that one of the long-term ambitions of the project is to try and get the scheme adopted by other regions and then nationally.

However, while the Competence Track project continues to progress, it seems unlikely that the initial ambition of reducing work permit waiting times from nine months to three days will be achieved on a mass scale anytime soon.

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