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Poverty in Iceland Drops as Tourism Rises

Poverty in Iceland
According to the Organisation for Economic Cooperation and Development’s (OECD) Better Life Index, Iceland‘s quality of life is very high. The country also has the highest employment rate of any OECD country. Simultaneously, however, poverty in Iceland affects 6,000 residents.
According to the Iceland Review, as of early 2015, around 9 percent of the population in the small country of Iceland fell into the low-income category. Recently, that number is steadily dropping thanks to a booming tourism industry. In 2011, upwards of 13 percent of the population fell below the poverty line.

 

Tourism Fights Poverty in Iceland

 

The 2008 financial crisis took a major toll on Iceland’s economy, leading to homelessness and unemployment. As a result, a Welfare Watch was created the following year in order to help alleviate these conditions.

In addition, the recent popularity of Iceland as a tourist destination has helped bounce the economy back towards its former financial success. The growing tourism industry has also created many new jobs for Icelandic residents. Unemployment rates have fallen and 45 percent of the jobs created within the past five years are related to the tourism industry.

There is no rest for the tourists — rental cars and lodgings are rapidly booked, even during the coldest months of the year, and Airbnb locations are second only to increasingly booked hotels. However, a host told Grapevine that he does not believe that even Airbnbs (in combination with traditional lodging vacancies) can meet the high demand.

The Icelandic bank, Islandsbanki’s projected future tourism rates estimate that in 2016 alone visitors will equal, or surpass, the number of people who live full-time in the island nation. Iceland’s growing fame has been attributed to volcanoes, inexpensive flights and layovers through Icelandair, as well as pop culture references like Game of Thrones.

Although many Icelanders are rejoicing at the tourism industry’s success, others are still wary of the future. The waterfalls and volcanoes of Iceland are major tourist honeypots, but increased crowding to these areas may be dangerous to both the environment and its visitors.

In the future, tourists may be discouraged to visit Iceland if the Icelandic Krona appreciates, causing prices to rise, or if the economy takes another hit.

There is also the fear that Iceland may lose part of its charm and culture as foreigners flock in. This is a trade-off for alleviating poverty in Iceland. Iceland is in need of money and, in the words of Bradley Turner of Grapevine, “The market doesn’t care much for memory, nostalgia, sentimentality, history.”

Poverty in Iceland continues to decline as a result of increasing visitors, but financial security comes at a price. Ironically, the Icelandic landscape and culture may be negatively affected by the country’s newfound popularity.

– Carrie Robinson

Photo: Flickr