A review from the Confederation of Danish Employers (DA), which represents 11 different private sector employers’ organisations, has found an annual wage increase of 4.9 percent compared with 12 months ago.

During that time, inflation in Denmark has dropped to around 1 percent.

This means that the ‘real’ wage increase – the increase in purchasing power after interest is taken into account – is positive.

An expert told news wire Ritzau that the final quarter of 2023 alone gave a real wage increase of 4 percent in Denmark’s private sector.

“It’s very high from ahistorical viewpoint,” senior economist Jeppe Juul Borre of Arbejdernes Landsbank said.

“Wages have reached their highest pace for 15 years. We have to say that the pace of the labour market with record high employment and collective bargaining agreements are making their mark on wage growth,” he said.

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Real wages suffered in 2022 as inflation began to take hold in Denmark, but collective bargaining agreements the following sought to address the spending deficit felt by consumers.

“In the ten years prior to the decline in real wages, Danes as a whole have experienced their wages increasing faster than prices, and that they thereby got more for what they earned,” Borre said.

The analysis from DA comes ahead of a new round of talks over renewed bargaining agreements this spring.