COVID-19 is exacerbating the unemployment crisis. Norway’s youth is particularly vulnerable

Young sadPhoto: Nik Shuliahin / Unsplash
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As Norway tackles COVID-19’s ongoing spread, increasing infection rates are not the only worrisome trend in the country. 

On November 24, the Norwegian Labour and Welfare Organization (NAV) reported the highest increase in unemployment benefits applications since the end of April 2020. 

Amongst these numbers, the NAV reported that there had been a hefty increase of people who have been laid off from work. 

This unfortunate news leads to a troubling question related to another, less discussed group – youths and recent graduates.

How has the pandemic affected job market prospects for Norwegian youth? 

An unprecedented unemployment crisis

Essentially, due to COVID-19, they’re facing an unprecedented unemployment crisis, much like the rest of the population – but with extra ramifications. 

With an increasingly flooded and competitive job-market filled with a laid-off workforce, companies are reporting lower intentions of hiring inexperienced workers, according to a mid-October report by Norwegian Broadcasting (NRK). 

Recent graduates and youth thus find themselves in a troublesome bind that might last for years. 

In March 2020, Norway saw a wave of unemployment of a scale that hasn’t been seen since World War II. Nearly 291,000 people registered as unemployed due to the COVID-19 pandemic. That’s 10,4% of the total workforce. The capital of Oslo was hit the hardest. 

Essentially, the pandemic led to thousands of Norwegians competing in one of the toughest markets seen in generations. This is especially true for new graduates and youth, who – under normal circumstances – wait for an average of six months or longer to get their first job in cities like Oslo, according to juristen.no. 

A more competitive job market

In October, the NRK reported that newly graduated Norwegians and youth face a job market that is more competitive due to the increase in layoffs of more experienced workers and because there are fewer jobs to choose from due to the virus. 

On top of this, a recent NHO study showed that four out of ten companies reported they were less likely to hire new graduates this year. 

“I am not surprised, but I am very worried. This shows how, in the worst-case scenario, we risk losing an entire generation of young persons to permanent unemployment.

“We must save the companies that were the first to be rammed by this crisis so that they can begin to hire young people again. We must secure measures that ensure that young people have the right competencies so that they get into work.

“We must also make sure to have wage support and wage subsidy schemes, which means that there is a lower threshold for getting into companies for young employees,” Ole Erik Almlid, the administrative director at the Confederation of Norwegian Enterprise (NHO), told NRK in relation to the study.

Unemployment benefits

While it is important that companies are subsidized so that they have more leeway when it comes to hiring younger employees, another unfortunate truth awaits many new graduates and youth – the lack of unemployment benefits.

As previously stated, the welfare authorities are reporting the highest increase in unemployment benefit applications since the end of April.

The majority of those that apply and get accepted are those that have been laid off.

However, in order to qualify for unemployment benefits, one must have earned at least NOK 138,864 in the past year and must have done so within the European Economic Area (EØS).

What’s next?

For some new graduates or youth looking for jobs, that bar is often too high to reach.

As many students rely on the Norwegian State Educational Loan Fund as one of their primary sources of income, many do not have the time or resources to earn enough to qualify for benefits after their graduation.

The same applies to those who have returned to Norway due to the virus and who have otherwise worked outside the EØS.

Several questions loom – how can new graduates and youth support themselves during COVID-19? Are they expected to rely on their savings until they eventually find a job opportunity in unprecedented job market conditions? Or are they expected to receive help from family?

The economic problem is swiftly turning into a social problem, as many do not have the luxury to wait until the unemployment crisis stabilizes.

Source: Norway Today

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