More work, less pay: Welcome to the new Danish workplace

Experts see the signs of a sea change in Danes’ expectations about work; staying competitive in the new global marketplace is at stake

A significant increase in the working week has been a central theme of the collective bargaining agreement (overenskomst) negotiations currently being hammered out by business leaders and trade unions for some 600,000 employees across all industries.

A longer working week, fewer public holidays, and pay freezes are all on the table.  And, remarkably, business and labour appear to be aligned in a plan to work more for less.

Adding to the picture, 2012 began with broad reforms made to the expensive, national early retirement programme (efterløn) and legislation that will gradually raise the retirement age from 65 to 69.

The situation has led to the influential think-tank Mandag Morgen, which specialises in public policy and social trends, concluding that the three-party labour law negotiations between business, labour and the government that are to follow this spring could be the most important Denmark has seen in 25 years.

Over the past quarter century those three-party negotiations have produced some of the most labour-friendly working conditions in the world. But the tide may now be turning.

By the government’s own reckoning, Danes today work fewer hours than citizens in nearly all other EU countries. Among developed nations, only Belgians put in fewer hours per day of paid and unpaid work, according to a study released last year by the Organisation for Economic Co-operation and Development (OECD).

We enjoy one of the shortest working weeks in the world – 37.5 hours – and get five weeks of paid vacation, nearly a dozen public holidays, and a year of paid parental leave. 

The evening rush hour starts at 3:30pm and there is more stigma in staying at the office until 6pm (and thus neglecting the family) than in leaving early to take the baby to swimming lessons.

However, while the gross salaries might sound sky-high to the uninitiated, once the 40 to 65 percent personal income taxes are deducted, they are, in fact, comparable to salaries in other EU countries.

But all that could be about to change.

“Let’s be straight. Our competitive position compared to Germany and Sweden is complete bollocks,” Erik Jylling, the chairman of Akademikernes Centralorganisation (AC), an association representing 200,000 professional and managerial workers, told Jyllands-Posten newspaper.

AC’s members were ready to do their part to make Denmark competitive again, the chairman suggested.

“Anyone can see that the trees don’t just grow all the way up to the clouds. That’s why I can imagine accepting, for example, a five-year collective agreement with zero pay rises,” Jylling said.

When annual inflation is taken into account, those five-year pay freezes will actually equate to pay cuts.

“We have to find a solution that won’t only carry us through to the next election, but also through to the next generations. Salary restraints are an important part of that,” Jylling explained to Mandag Morgen.

Other proposals being seriously discussed are eliminating a public holiday or two – such as May 1 or Store Bededag (Prayer Day, held on the fourth Friday after Easter) – and lengthening the working week for public sector employees by eliminating their 30-minute paid lunches.

“The so-called ‘free lunch’ is something public sector employees negotiated for themselves in past collective agreements. In reality, it means they work half an hour less each day than private sector employees do,” Aalborg University professor Flemming Ibsen, a specialist in the labour market, explained to Berlingske newspaper.

“If that’s eliminated, it means that public employees will work half an hour more per day. And they won’t be paid for it,” Ibsen continued. “The point is to get more work out of people.”

Public sector employees comprise more than a third of the labour market. The conservative think-tank Cepos estimates that ending their paid lunches would save the state nearly ten billion kroner annually – a sum that far outstrips the government’s goal of saving four billion kroner per year on labour.

When Helle Thorning-Schmidt (Socialdemokraterne) began campaigning for her job as prime minister last year, she proposed working 12 minutes more per day for pay. Now it appears that people may accept working 30 minutes more per day – and without pay.

But if labour is going to give way on pay and hours, they are expecting business to meet them part way.

Labour is demanding greater influence both on and off the job, in the form of better and more education and skill development, more paid internships for students, and an end to the councils’ dreaded ‘activation’ schemes, whereby the unemployed are forced to attend remedial job-seeking courses in exchange for unemployment benefits.

It might seem like labour and business have lost their will to fight each other in the face of permanent crisis, but the week’s news also brought out a reminder of their fundamental differences – with an ironic twist.

When the European Commission proposed claiming the right to outlaw strikes and lockouts that could threaten the EU’s internal market, both labour and business reacted with a unified and resounding ‘no’, with both sides agreeing to defend their right to disagree.

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