Business Round-Up: Economic experts call for foreign recruitment to ease labour shortage

Meanwhile, Denmark’s top-tier stockmarket index, the OMX Copenhagen 25, sees the biggest one-day rise for seven months

The acute labor shortage in Denmark has been pegged by Dansk Industri as the “biggest recruitment crisis in Danish history”.

Last month, the government presented the reform ‘Denmark Can Do More‘. Last week, the government entered into an agreement with national recruitment associations to reinforce efforts to match the unemployed with available jobs and to recruit European workers.

But according to De Økonomiske Råd (the Economic Council), it’s not enough. In its latest report – one of two published annually by the independent economic advisory body, the council called on the government to make the market more open to foreign labour.

Tough entry requirements
Non-EU workers must be earning at least 445,000 kroner a year to be eligible for a Danish work visa. That requirement prevents many workers – who could otherwise ease the labor shortage – from entering the country, contend the council.

“The minimum salary for entry should be lowered. It will encourage more workers to join the workforce and our previous analyses show that the knock-on effect on Danes’ wages and employment is minimal,” said the chair of the Economic Council, Carl-Johan Dalgaard.

Denmark’s largest business organisation, Dansk Industri, was amongst the first to openly insist on increasing foreign labour.

“The Economic Council have hit the nail on the head with its proposal to lower the foreign-worker salary limit so companies can access extra employees,” said DI policy chief Emil Fannikke Kiær.

Figures equivalent to those before financial crisis
The Economic Council predicts a rise of 60,000 unemployed this year, bringing the ‘unemployment gap’ – a figure that expresses how far unemployment is above normal levels – up to 0.75 percent this year.

The unemployment gap is predicted to reach 1.75 percent in 2022. “This is roughly equivalent to the pressure on the labour market in 2006, just before the boom really peaked,” according to the Economic Council report.

Severe as the Economic Council’s warnings are, DI’s are more so. It asserts that the council underestimates the rise of the economy – and therefore also the scale of the labour problem. DI predicts GDP growth of 4.4 percent this year, and the council 3.9 percent.

Danish banks lend billions to Israeli companies in occupied Palestine
Danske Bank is among Europe’s largest creditors for companies operating in illegal Israeli settlements, according to a new report by a coalition of 26 Palestinian and European civil organisations. The bank has loaned almost 16 billion kroner to companies with settlement connections since 2018. Nykredit and BankInvest also have financial connections to Israel’s occupation of the Palestinian territories. European cash flows both make the settlements economically profitable and give them political legitimacy, despite being illegal under international law. When questioned by Danwatch regarding the unethical nature of the investments, Danske Bank press officer Claes Lautrup Cunliffe declined to comment.

Close to 10,000 have reported COVID-19 effects as work-related injuries
New figures from Arbejdsmarkedets Erhvervssikring reveal that almost 10,000 workers who contracted COVID-19 have reported it as an occupational injury. Most work in healthcare or as carers, so are among the vulnerable group of frontline workers. The publication of the figures coincides with a major political battle over how employers treat healthcare professionals who were unable to return to their jobs full-time due to the lasting effects of their COVID-19 infection.

Danish farm robot company, FarmDroid sees surge in demand
A Danish company called FarmDroid, which has sold more agricultural robots than any other company in the world, has recorded growth figures of 1,000 percent between 2019 and 2020. The founders, brothers Kristian and Jens Warming, have sold 150 seed-sowing and de-weeding robots, which are solar-powered and self-sustaining. FarmDroid recently moved some of its testing activities to Ravnholtgård in Vejen. It expects to increase its production capacity from ten robots per week to 25.

Microchip shortage impacts car and iPhone production
In a survey of 121 car dealers by Autobranchen Danmark, over 50 percent of dealerships reported receiving 40 percent fewer cars than usual, with extended delivery times of 4-6 months on many models. A lack of microchips and other sub-components has impacted production time at car factories, and compounded by the fact that many were closed periodically during the pandemic, they therefore have a backlog of orders. According to Bloomberg News, Apple has been forced to cut this year’s production of the iPhone 13 by 11 percent due to a lack of microchips.

The shoe chain Bianco is closing its last stores
The shoe chain Bianco has, after a long series of deficits, announced the closure of its remaining 23 stores in Denmark and Norway. CEO Thomas Rosenvold Tygesen said the precise closing date is unconfirmed as there are several commercial leases to terminate. Bianco shoes will still be available for purchase through wholesalers, and the possibility of concession outlets inside larger department stores is still on the the table. The Danish Bianco stores are in Aarhus, Horsens, Vejle, Kolding, Randers, Køge and Rødovre.

Danish stockmarket has best day in seven months
The OMX Copenhagen 25 index – a top-tier list of Denmark’s 25 most traded public companies – rose by 2.5 percent on October 13 to 1888.7. It is the highest daily increase since March 9. The rise follows a period of falling value due to the fear that the Chinese real estate giant Evergrande might go bankrupt. Wednesday’s increase may be thanks to the number of “quality shares” in the Danish stock market that have been resilient during the pandemic and have since shown a strong earnings trend. This applies to Maersk, Novo Nordisk, Vestas and Ørsted, among others.

Danish invention adopted for Indian mass-production
Danish wind turbine pioneer Henrik Stiesdal has developed a hydrogen electrolysis machine called ‘HydroGen Electrolyzer’. Electrolysis can be used, among other things, to replace fossil fuels in trucks, ocean-going ships and a number of industrial processes. Stiesdal’s new apparatus will be mass-produced at a new factory run by India’s largest industrial company Reliance Industries. Stiesdal signed an agreement with the Indian conglomerate in connection with Prime Minister Mette Frederiksen’s state visit to India this month. “We aim to achieve our goal of offering hydrogen energy for less than 1 dollar per kilo within a decade,” said Reliance Industries CEO Mukesh Ambani, who is said to be Asia’s richest man.