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WORKING IN DENMARK

Why are Danish experts recommending closure of all job centres?

Recommendations made by an expert commission to the government on employment and welfare advocate for closure of all municipal job centres.

Published: 24 June 2024 17:32 CEST
Why are Danish experts recommending closure of all job centres?
Expert group leader Claus Thustrup Kreiner, presents proposals on reform of Denmark's unemployment system. Photo: Thomas Traasdahl/Ritzau Scanpix

Denmark’s job centres, which are responsible for administration of social welfare benefits for people seeking employment and of facilitating training and work placements under welfare lows, should be closed according to recommendations handed to the government on Monday.

Additionally, over half of the current rules related to unemployment benefits should be scrapped and 9 in 10 sanctions for people who fail to comply with criteria such as attending meetings or applying for a set number of jobs.

Denmark has two broad tiers for those out of work: dagpenge, which provides an income calculated on the person’s tax payments while in employment, and the more basic kontanthjælp.

Dagpenge is available to people who a paying members of a semi-private uninsurance provider called an Arbejdsløshedskasse or A-kasse, while kontanthjælp is available to everyone.

Both groups must comply with legal requirements related to job searching in order to receive the benefits they qualify for – these are administered by municipal job centres.

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When the coalition government took office at the end of 2022 it stated that it wanted to save three billion kroner annually by reforming the municipal unemployment area and improving its efficiency – specifically by targeting job centres.

This has led to an expert group, appointed by the government, making six specific requirements – those announce on Monday.

The government is not obliged to follow the recommendations.

But the expert group says there is much to gain from closing job centres.

“There’s great potential in replacing the current one-size-fits-all system with a new approach where individual needs are in focus,” group chairperson Claus Thustrup Kreiner said in a press statement.

The six broad recommendations are as follows:

  • Fewer target groups and special rules
  • Individual programmes
  • More balanced sanctions system
  • Abolish job centres and introduce free organisation at municipalities
  • Give more influence to A-kasse and private interests
  • Results, not system-based approach

|Source: DR

“Our report includes recommendations for the biggest reform of the jobseeking area ever, and will make the system cheaper, simpler and more dignified without weakening employment,” Kreiner said.

The national confederation for trade unions, Fagbevægelsens Hovedorganisation (FH), criticised the costcutting element of the recommendations in comments to broadcaster DR, and also said it would reduce the options and rights of jobseekers.

“I thought this was about giving unemployed people more freedom to decide what they need,” FH chairperson Nanna Højlund said.

“But the expert group clearly sees it as being about allowing municipalities to do exactly what they want,” she said.

The Confederation of Danish Industry (DI) welcomed the proposals.

“The expert group has proposed a simplification of employment with fewer rules and benefit categories and with a large saving” DI deputy director Steen Nielsen said in a statement.

“That is a good idea because it’s difficult to run a job centre efficiently with the many different criteria and rules that must be met for each of the many categories,” he added.

Member comments

  1. All these whilst billions and billions of danish krone is still thrown to a bottomless barrel called Ukraine. Somehow this money is easily found

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WORKING IN DENMARK

Which Danish industries have the highest proportion of low paid foreigners?

A study by the Danish labour movement's economic policy institute has found that foreign citizens are heavily overrepresented among the lowest paid workers in Denmark. These industries are the worst offenders.

Published: 24 June 2024 11:10 CEST
Updated: 24 June 2024 14:50 CEST
Which Danish industries have the highest proportion of low paid foreigners?

In five industries, more than one in three workers among the worst-paid 20 percent of employees were foreign citizens, with agriculture, transport, cleaning, hotels and restaurants and construction the worst offenders, the analysis by the The Economic Council of the Labour Movement (Arbejderbevægelsens Erhvervsråd) found. 

“Foreign workers often don’t know what wages are common in Denmark or what rights people have, because maybe they don’t know the culture in the Danish labour market,” Emilie Damm Klarskov, the council’s head of analysis, told The Local. 

She said that she was worried that the recent increase in the number of foreigners coming to Denmark for work risked slowly making Danish society less equal.  

“I think it’s a bigger problem in many other countries, but I’m concerned that it’s developing in Denmark, because what I don’t want is for there to be an A-team and a B-team, where the A-team has all the rights and a high wage level, and then we have the B-team [of foreign workers] that don’t have the same rights, because then we’ll increase inequality in the whole society.” 

In the agriculture, forestry and fishing segment, which is heavily reliant on seasonal labour from abroad, more than two-thirds of workers (66.4 percent) in the lowest quintile were foreign, compared to well under half (44 percent) in the industry as a whole.  

In transport, more than half (50.7 percent) of workers among the lowest-paid 20 percent were foreign, compared to well under a third (30.2 percent) across the industry as a whole. There was a similar situation in the cleaning industry, where 45.3 percent of the lowest paid were foreign, compared to 30.2 percent across the industry. 

The hotel and restaurant industry was also heavily reliant on cheap foreign labour, with foreigners accounting for 41.9 percent of the worst-paid fifth of employees and only 31.2 percent of employees as a whole. 

The other industry that employes a lot of low-paid foreigners was construction, with 37.8 percent of those in the lowest paid 20 percent coming from outside Denmark, compared to only 18.5 for the industry as a whole. 

The only industries where foreigners were slightly underrepresented among the lowest paid quintile were in energy supply and in raw material extraction. 

Damm Klarskov said that she would encourage all foreigners working in Denmark to join a union, even if their employer does not have a collective bargaining agreement, as unions could provide guidance on what constitutes a fair wage and advice on how to push for better pay. 

READ ALSO: EXPLAINED: What is a Danish collective bargaining agreement?

“It’s what I would recommend everyone to do because then you can get good advice from the union about what would be fair wage for you and what rights are normal in a job like the one that you’re offered.”

The overrepresentation of foreign workers among the low paid was even more marked among businesses with ten or fewer employees. Fully 56.2 percent of the lowest paid 20 percent of workers in hotels and restaurants with ten employees or fewer were foreign, 49.6 percent in agriculture, and 45.6 percent in cleaning, compared to 40 percent, 35.9 percent and 25.7 percent in the industry as a whole. 

"The thing about these industries is that there are a lot of small businesses, which makes it harder for the unions to reach them," said Damm Klarskov. "There are a lot of cafés that open with maybe five to ten employees and then close a year after they launch, so it's quite hard to make sure they are good employers." 

The study also highlighted that the same industries which had a high proportion of foreign workers in the lowest-paid quintile, also tended to have a lower share of employees who were members of an A-kasse employment insurance scheme, or who were part of an employer-administered pension scheme. 

"In industries where unions have more power, we see that foreign workers are not as dominating in the bottom of the wage distribution, and on the other hand, in industries where fewer of the workers are members of a union, we see that it's more 'Wild West', so every worker has to bargain for his or her pay level." 

She said it was unclear whether the higher proportion of foreign workers in these industries was undercutting unionisation, or whether instead, a lower level of unionisation made these industries more accessible for foreign workers. 

"It's hard to know what comes first. We know that foreign people are not as often unionised as Danish people. So maybe they seek jobs in industries where unions have less power, or maybe they end up there because they can't get a foot inside other industries." 

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