Rising International Migration within a Booming Economy

The growth in migration had already begun in the late 1990s with Iceland’s 1994 decision to participate in the European Economic Area (EEA) with its agreements regarding a single labor market. But it accelerated in 2006 when the window given to new EU members limiting access to Iceland’s labor markets expired (Dustmann, Frattini and Halls 2009; Sigurðsson and Arnarson 2011). This coincided with a great need for workers in mega projects in Iceland and the booming construction industry. In 1996 the number of immigrants (defined as people born abroad with parents born abroad) accounted for approximately 2 percent of Iceland’s population, with 30 percent coming from other Nordic countries. Immigrants from Asia accounted for only 15 percent. In 2008, just over a decade later, the number of immigrants had skyrocketed, representing 8.1 percent of Iceland’s population. The majority, 68 percent, came from Europe, while the number of Nordic immigrants had decreased to 7 percent. Although the number of Asian immigrants had grown, they continued to account for only about 15 percent of all immigrants (Garðarsdóttir, Hauksson, and Tryggvadóttir 2009). People from outside of the EEA coming to work in Iceland require a work permit prior to entering the country. Thus, those coming from outside Europe arrive increasingly to reunite with their families.

As discussed by Fix and colleagues (2009), immigrants are vulnerable for many reasons. They may have little education and poor host-country language skills. The practice of hiring immigrants in large groups on provisional contracts in sectors often referred to as boom-bust industries, such as construction, can weaken their position further. In the 1990s a large number of people arrived in Iceland to work in the fisheries. Most of them were women taking jobs previously held by Icelandic women. By 1996, 70 percent of all work permits were granted to fish processing plants, the majority for women from Poland. High unemployment among women in Poland at the time, the transformation to a market economy, and the opening of borders of Western Europe following EU membership in 2004 were all factors that stimulated migration from Poland to countries within the EEA, including Iceland (Skaptadóttir and Wojtyńska 2008a).

People from the Philippines were also migrating to Iceland to work in the fisheries, since most of the jobs vacated by Icelandic women were originally filled by women from these countries who had immigrated because of marriage. Subsequently, they would find employment for friends and family members who wished to join them. These women thus became central agents in the chain migration that took place during the economic boom. Johanna G. Bissat (2013) found that Thai women had the same role in the migration of people from Thailand to Iceland.

Women migrants were no longer the majority once migration increased significantly after May 2006, when people from the new member states of the EU no longer needed to secure work permits to come to Iceland. The majority of migrants arriving after the simultaneous EU accession of former Eastern Bloc countries in 2004 came from Poland. Immigrants from countries such as Portugal and Lithuania arrived in increasing numbers as well. In 2007 alone, the number of Polish immigrants in Iceland rose from 3,629 to 5,627, of which 73 percent were men. Several massive construction projects, including a large power plant and an aluminum smelter, explain the prolific increase of male immigrants in 2006, 2007, and 2008 (Skaptadóttir 2011). In 2007, at the height of the Icelandic economic expansion, the Directorate of Labor reported that 9 percent of the Icelandic work force was composed of foreign citizens. In 2007 and 2008, 36 percent of all foreign workers were employed in the construction industry (Sigurðsson and Arnarson 2011). Most people who moved to Iceland at this time were twenty-five to thirty years old. That meant that, in 2010, 15 percent of the Icelandic population in this age range was foreign-born. The escalating economy also created jobs in services, and thus many of the immigrant women became visible in service jobs (Skaptadóttir 2011).

During this period unemployment was almost nonexistent among immigrants who came to Iceland for work (Skaptadóttir 2010b; Wojtyńska 2011). However, migration was not driven solely by unemployment in the country of origin; a survey from 2009 shows that the majority of immigrants were employed in their country before moving to Iceland (Jónsdóttir, Harðardóttir, and Garðarsdóttir 2009). My interviews with immigrants in recent years show that the higher wages, due to the very high value of the Icelandic currency at the time, was an important factor in the decision to migrate. For example, Poles could multiply their salaries by working temporarily in Iceland. Many of them were sending money to their parents or children, and some were saving for a house back home. The difference is even higher for Filipinos, who in some cases could multiply their salaries by taking on even low-wage employment in Iceland. Unlike the Poles, people from the Philippines are more likely to define their stay as long-term and plan accordingly but continue to place great emphasis on sending remittances to relatives, such as elderly parents, children, siblings, and in some cases nephews and nieces (Skaptadóttir 2010b). As citizens of the new EU member states have received higher priority in the labor market in recent years, people from the Philippines increasingly indicate uniting with family as a reason for migrating to Iceland.

Many of those who first arrived in Iceland and started working in fisheries and later in the service, caregiving, and construction sectors saw their stay as temporary. Since there was a demand for labor and it was relatively easy to get work for relatives and friends, many of them extended their stay (Skaptadóttir and Wojtyńska 2008b).

Foreign Workers Feel the Crash

The economic collapse in Iceland affected immigrants adversely in many ways. Unemployment in the Icelandic construction sector rose dramatically, causing unprecedented unemployment among male immigrants and making them the majority in the aftermath of the collapse. Immigrants, primarily women, working in service-sector jobs suffered the least, but they nevertheless faced reorganization and the threat of layoffs. In 2010 the immigrant unemployment rate was 14.5 percent, twice as high as that of Icelandic citizens (Sigurðsson and Arnarson 2011). Approximately 90 percent of unemployed immigrants came from Europe, with 60 percent of those from Poland (Sigurgeirsdóttir 2011; Skaptadóttir 2010a).

While unemployment among Icelanders decreased in 2009–2010, unemployment among foreign residents increased. There is no single explanation for the continuing higher rate of unemployment among immigrants. However, there are a number of factors that normally influence a person’s chances of getting a job, such as nationality, interpersonal skills, and length of time in the country (Wojtyńska 2011, 47–48; Tilly 2011, 685). Immigrants’ chances of getting a job in Iceland were already limited since their work experience was generally not recognized in Icelandic society. Immigrants also tend to receive inadequate information about available jobs and employers’ requirements for jobs. Before the crisis, not knowing Icelandic did not keep immigrants from securing at least low-wage jobs. However, that lack of knowledge is also the main obstacle in acquiring a job at a time of high unemployment; thus recent immigrants are the first to lose their jobs during a recession.

Although migration is a fairly new experience for Iceland, immigrants have commonly been discussed in terms of “foreign labor power” (vinnuafl ) that is expected to leave in times of employment shortages. The media headlines immediately following the bank crash in 2008 depicted a mass exodus of both foreigners and Icelanders without work (Garðarsdóttir and Bjarnason 2010). Emigration from Iceland has in fact increased since the crisis, although not as much as expected. After the collapse some immigrants chose to return home, and the ratio of immigrants in Iceland declined. At its height in 2009 at 7.6 percent, the foreign population dropped to 6.6 percent in 2012 (Statistics Iceland 2012).

These figures indicate that despite the escalation in the unemployment rate among foreign residents, there has not been a significant decline in the immigrant population. More foreign men (mostly European) than women have left, which may be explained by the fact that they arrived more recently, just before the economic meltdown, so were less settled than the women. Given the global nature of the current economic crisis, many foreigners may remain in Iceland because they do not have a job back home. Unemployment is on the rise in eastern Europe and in the Baltic countries, which have been experiencing severe a economic crisis since 2008 (Masso and Krillo 2011). The global socioeconomic situation is likely to be relevant since the positive net migration among women to Iceland in 2010 was mainly from the Baltic countries.

Despite persistent unemployment in Iceland, there are certain jobs that Icelandic women and men are shunning, and openings in fish processing and caregiving work still remain. Hence, foreigners have continued to move to Iceland after the economic crisis, albeit in much lower numbers (Garðarsdóttir and Bjarnason 2010; Júlíusdóttir, Skaptadóttir, and Karlsdóttir 2013).

New Obstacles to Employment

Immigrants mostly came to work in formal employment; therefore they have been members of unions since they began working in Iceland. The employers, based on an agreement with the labor unions, pay a certain percentage to the unemployment fund on behalf of each unionized worker. Like their Icelandic counterparts, these workers are entitled to unemployment benefits. In most cases, these benefits pay more than many of the recent migrants would receive for employment in their countries. Poles and other Europeans can take their unemployment with them back to their country of origin but will then receive the given unemployment benefit in that country, which is much lower than in Iceland. The payment of unemployment benefits is in the hands of the Directorate of Labour.

Those who are not unionized and who are seeking work need to apply to the municipality where they live for assistance. Although job seekers are offered various free courses to aid in finding work, the courses are in Icelandic and are therefore inaccessible to many foreigners. Prior to the financial crisis, foreign workers were usually not required to have any knowledge of Icelandic; newspaper advertisements for available jobs could often be found in Polish. The construction industry often hired large groups of workers who spoke neither Icelandic nor English and provided them with a translator. Since the crash, this trend has shifted and employers now often expect immigrants to master Icelandic if they are to employ them (Wojtyńska 2011).

A recent study among unemployed immigrants (Wojtyńska, Skaptadóttir, and Ólafs 2011) shows that only 14 percent of respondents considered themselves fluent in Icelandic. Hence, the unemployed are directed to Icelandic language courses by the Directorate of Labour with the goal of making them more employable. People can take other courses, but over 90 percent of participants in the aforementioned study had enrolled only in courses suggested to them by the Directorate of Labour. In open answers in the survey, many participants said they would like to take courses in driving special vehicles or in operating machines, computer design or programming, and in languages other than Icelandic. The same study showed that 63 percent of the unemployed want to stay in Iceland and 87 percent were actively searching for work, primarily in Iceland. However, the survey also showed that three-quarters thought it would be very difficult or rather difficult to get a job in Iceland, and 71 percent named lack of fluency in Icelandic as a reason. Furthermore, 62 percent answered that employers were not eager to hire foreigners. The great majority, or 72 percent, agreed with the statement “Since the onset of the financial crisis, Icelandic employers prefer to hire Icelanders rather than foreigners” (ibid.).

It is evident from interviews with immigrants, language teachers, and various service providers that since the crisis there has been an increased emphasis on knowledge of Icelandic as a job requirement. Some immigrants complained in the interviews that they could no longer get the kind of job they had when they first came to Iceland, such as in cleaning or food production, because they do not speak the language well enough. Almost all advertisements for jobs are in Icelandic, and many specify Icelandic as a requirement, although there are a few recent exceptions where advertisements have been in Polish. Representatives from trade unions and state and municipality offices further indicated that immigrants commonly sought assistance because they were unable to understand the information sent to them, which was usually in Icelandic.

Obligations

Immigrants have been affected not only by unemployment. Like Icelanders, many of them had taken out loans for cars and housing, and their ability to pay was damaged by higher interest rates, inflation, and depreciation of the Icelandic currency, which led to a devaluation of their salary in terms of remittances. The majority of Poles are supporting their partners, elderly parents, and children in Poland. Filipinos have hospital bills, expensive medication, and college education to pay for their children or younger siblings. In many cases, immigrants from both Poland and the Philippines have invested in housing at home. Thus, it was difficult for them to cut their remittances, since the people depending on them tended to be ones with whom they had emotional ties. In some cases, as with the Filipinos, the roles had been reversed. Parents, uncles, or aunts now receiving the remittances had previously supported those now bearing the responsibility of remittance flows. Hence, people felt obliged to continue to send money despite decreasing wages or unemployment benefits. It was inevitable that they would have a hard time making ends meet given the rising living costs in Iceland.

This may be one factor that explains why unemployed immigrants seek aid from charities that distribute food and cheap clothing. Representatives from the two main charity organizations expressed their concern during interviews about the growing number of foreigners seeking assistance after the crisis. A 2010 study showed that one-third of those seeking help from charities had foreign citizenship, the majority of them unemployed Poles (Dofradóttir and Jónsdóttir 2010). Most of the Poles participating in this study had lower incomes but more education than the Icelanders and other foreigners receiving aid. Unlike the Icelandic participants, they lived in rented housing, which was not subsidized. In the same study, some Icelanders expressed concern that they were receiving less food because foreigners were getting assistance. Poles felt that they were subjected to prejudice and suspected that Icelanders had access to better food bags. Charity representatives told us in a 2011 interview that in response to the growing demand, they had decided that foreign men would be entitled to monthly food rations only, whereas others could receive it weekly. Their argument was that single men, who might be sharing a house, could survive on unemployment benefits and could get warm meals elsewhere. The women we interviewed showed more concern for helping women than men, even though they were aware of higher unemployment among men (Wojtyńska, Skaptadóttir, and Ólafs 2011).

Changing Views toward Immigrant Issues

Tilly (2011) points out that public opinion in Western Europe seems to have turned against immigrants during the financial crisis. It is difficult to ascertain whether this is the case in Iceland because of a lack of pre- and post-crisis studies of the general view of immigrants in Iceland. However, the survey I conducted during the summer of 2012 on the views toward immigrants showed that the majority of respondents were positive toward immigrants coming to work in Iceland. But those making the lowest wages were most likely to agree with the following statement: “Icelanders should have more right to work than immigrants when there are few jobs available.” The same survey showed a difference in views based on education, with 39 percent of people who had finished compulsory education agreeing that it was very good or rather good for the Icelandic economy to have immigrants move to Iceland. However, 83 percent of those with a postgraduate degree agreed. People in urban areas are also more positive than those in rural areas.

There is evidence that interest in immigrant issues has diminished and that the state has been unable to adequately fund agencies and organizations that work directly with immigrants to address their specific circumstances. Immigrants, like other groups, have had to bear the consequences of the pervasive cuts to public institutions. Yet some budget reductions hit immigrants disproportionately, such as funding for Icelandic courses and savings on translation and interpretation for immigrants. Many schools have also reduced their services for immigrant children.

The decreasing interest in immigrant issues is clear in the media. There has been a general reduction of local newspapers in Iceland, and immigrant issues are generally covered less. At the same time, similar to many European countries, immigrant issues are increasingly being depicted in relation to crime (Wojtyńska, Skaptadóttir, and Ólafs 2011), thus reinforcing the stereotypes of immigrants as threatening and Eastern European men as connected to organized crime, rape, and violence. The only newspaper covering news in Polish has since ended this service, thus diminishing the possibility for those not fluent in Icelandic to follow political, social, or cultural events in Iceland (Wojtyńska and Zielińska 2010).

A changing nationalist discourse may also affect immigrants and their inclusion in society. During the economic boom, the nationalist discourse of Icelanders as “the best in the world” was outward-looking (Loftsdóttir 2009). However, since the meltdown, the nationalism has become more inward-looking, with a focus on the common history of Icelanders. This affects the way native Icelanders view foreign workers, who cannot easily claim to be a part of the old traditions, such as knitting Icelandic designs and cooking traditional “national” food, practices that have become more important during the crisis. Thus, the current nationalist discourse is more exclusive.

Immigrants talk to me about experiencing more negative attitudes after the recession set in. However, prejudice toward foreigners did not begin with the crisis. In 2006, when immigrants were becoming more visible, moving from closed-off factories into services, working in shops or restaurants, or driving buses, the media were already publishing negative perspectives. Yet when asked about the effects of the crisis, some immigrants say they have experienced a change of attitude toward them. Many, including those who are settled with families, said they had been asked after the crisis when they would be leaving. Wojtyńska and Zielińska (2010) explain how the majority of Poles they interviewed said they had a positive experience of Icelanders, but recently some had noticed a shift toward a more unwelcoming attitude and claimed that Icelandic employers preferred native workers.

Similar concerns came up in my interviews with people from the Philippines. One man, for example, said, “They blame us for the crisis. They do not understand that we have contributed to the economic well-being of this country and that we have been paying our taxes, and they do not understand that we have to send money to our families. It is very difficult to turn back and no longer be able to help our families who depend on us.” A woman from the Philippines, who had been working for five years in caregiving work, claimed that, after losing her job in 2009, she is unable to find work again only because she is Asian.

Conclusion

A great number of people moved to Iceland during the economic boom to work in low-income jobs that Icelanders no longer wanted. Salaries were low, but with overtime and the increasing value of the Icelandic krona, they could earn much higher wages than in their country of origin. Many also came to be with relatives in Iceland.

The working conditions of foreigners have worsened since the crisis. There is higher unemployment, reduced working hours, and lower salaries. Knowing Icelandic is increasingly a precondition for getting a job. So although unemployment is dropping, it remains high for immigrants. The government’s main method to address unemployment among immigrants is to offer courses in Icelandic. Many Poles feel disillusioned and cheated by the banks, politicians, and the media after the crisis (Wojtyńska and Zielińska 2010). Thus, in many ways, the experiences of immigrants are similar to those of Icelanders, but their weak position in the labor market makes their situation much worse. Although unemployment benefits are better in Iceland and their situation in many cases is better than at home, many experience discrimination and exclusion from the labor market.