Radikale: Lower wages to impede job losses

Coalition partner the Radikale urges reducing wages to increase employment though far-left party Enhedslisten argues it is not the solution to the Danish labour market’s woes

August 3rd, 2012 9:21 am| by admin

A story about a restaurant owner standing up to the unions over his rights to set his employees working conditions has sparked a greater debate about the problems facing the Danish labour model.

While it has managed to secure favourable working conditions for hundreds of thousands of workers, the Danish labour model has a dark side. In 1985, 688,000 Danes of working age were not a part of the labour force. In 2010 that number rose to over 900,000.

Nadeem Farooq (Radikale) believes that the model is expensive and dysfunctional and needs to change.

“While I would love to see wage increases in Denmark, we are challenged by lower German wages and must follow suit,” Farooq told Jyllands-Posten newspaper. “Otherwise it could mean a massive migration of jobs to Germany.”

High wages during the European economic downturn has coerced many Danish companies to outsource jobs to cheaper countries such as Poland and Germany. With record unemployment numbers, the incumbent government has been campaigning for Danes to work more and increase the number in work by 180,000 in 2020.

But Stine Brix (Enhedslisten) does not concur with the idea that working more will solve the problem, believing it will only serve to apply more pressure on wages.

”It’s ridiculous when De Radikale suggests that we should compete with German wages. The minimum wage in Germany is 55 kroner an hour. Nadeem Farooq can go down in wages if he likes but it’s not a sustainable strategy for Danish workers,” Brix said in a press release. “We shouldn’t be competing with German or eastern European wages, but with quality and premium knowledge. If wages are pushed down the Danish society will suffer.”

Per Clausen (Enhedslisten) agrees with his colleague that escalating labour output and reducing salaries won’t make the Danish business sector more competitive, but only increase profits for the company owners.

“A labour increase and wage reduction will expand inequality in Denmark and mean that the downward spiral which has affected workers and welfare in the EU countries will only further intensify,” Clausen said in a press release.

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