Closed restaurants and empty streets have added to the November gloom, and sent Norway’s numbers of “long-term unemployed” up nearly 72 percent so far this year. The increase is blamed almost entirely on the Corona crisis that’s now turning temporary layoffs into terminations.
“Long-term unemployment is now at an alarmingly high level,” says Hans Christian Holte, who recently took over as the new director of state welfare agency NAV. He told business news service E24 that stricter Corona infection control measures have led to another rise in the jobless rate for the first time since May, when earlier Corona layoffs eased and many people were called back to work. Now, with summer optimism long gone and Norway caught in its second infection wave, many have not only been laid off again but lost their jobs permanently.
It’s brought the total number of people without jobs to 109,000 in November, up from 63,400 in the same month last year. That’s when Norway and its then-strong economy had an unemployment rate of just 2.3 percent.
Now it’s risen to 3.9 percent of the total workforce, still lower than in most countries but high for a country that’s long been fueled by oil and gas and several other vigorous industries. Corona’s toll on the travel, transport and restaurant business has hit Norway hardest, with no immediate relief in sight. Even after a vaccine arrives, several economists have said they think it will take at least another year or two before the important tourism and hospitality sectors revive.
Bankruptcy fears skyrocket
Tourists from abroad have all but disappeared and Norwegians are warned against travel, too, in order to stop the spread of the Corona virus. That has shut large portions of airports, hotels have huge vacancy rates and many have closed, along with restaurants, bars and cafés. Oslo is hardest hit, not least after city government officials ordered a halt to the serving of all alcoholic beverages, to discourage social contact. That forced bars and most restaurants to shut down, since beer and wine sales are often their biggest source of revenue.
New statistics from national employers’ organization NHO show that more than 70 percent of bar and restaurant owners fear bankruptcy by the end of the year. Many generate most of their annual revenues during the autumn and pre-Christmas season. With the current strict measures remaining in place at least until December 14, their most important season of the year has been utterly spoiled.
Oslo’s Labour Party-led government shut them down but expects the Conservatives-led state government to offer an extra emergency compensation package to Oslo businesses facing bankruptcy. NHO supports that expectation but state government officials argue they have the entire country to worry about. Finance Minister Jan Tore Sanner urged restaurant owners, backed by state loan guarantees, to appeal to their own banks instead. With the prospect of taking on more debt unattractive, that hasn’t helped.
Labour market suffering
Meanwhile the future of Norway’s once-thriving hotel and restaurant industry is now at stake and that’s sending unemployment up dramatically. NAV’s statistics show it rising 24 percent just from October to November, and director Holte is worried.
“The stricter infection control measures are hitting the labour market quickly,” Holte told E24. “The number of people looking for work is rising, and is highest among the young (under age 25). It will take a long time before we get back to the same (unemployment) levels we had before the pandemic hit us.”
Labour and Welfare Minister Henrik Asheim claims the state government is doing “all it can” to secure jobs and make sure unemployment benefits are arranged as quickly as possible. He blames the second wave of Corona infection, saying it made imposition of stricter regulations “absolutely necessary” to contain the spread of the virus. Trade Minister Iselin Nybø is also worried and working on more economic aid and stimulus packages, in addition to the billions of kroner in aid already provided. She’s said she’s sorry about the need for regulations that have forced some businesses to close, “but health and safety come first.”