Michael Jacobsen The Danish Confederation of Trade Unions (LO)

Michael Jacobsen

The Danish Confederation of Trade Unions (LO)

Happy working fools ?

• Danes are the happiest people on earth. Different surveys reveal that from time to time when we try to compare different nations.

• The question is why are the Danes so happy? Is there something we have misunderstood? The Danes work hard for many years. And we as a Trade Union support this approach.

The Danish employment rate

Labour market participation rate - 2005

0

10

20

30

40

50

60

70

80

Kilde: OECD Employment Outlook

Seasonally adjusted unemployment figures in pct.

Unemployment rates DK, UU, Germany

The dynamic Danish labour market

The Danish labour market is extremely dynamic, - around 30% of the workforce change jobs each year.

- Workers do virtually not loose any rights when they change jobs, such as their entitlement to paid holidays, pensions etc., and for companies,

- It is relatively easy to dismiss employees thanks to procedures regarding notification etc. which are very flexible. As a consequence, average job tenure in Denmark is among the lowest in the EU.

- Employers are relatively less reluctant to hire when it is needed.

Unemployment – is not uncommon to many danes!

High mobility does not necessarily lead to lower unemployment, but rather to shorter spells of unemployment. Many Danes experience a period of unemployment during their working lives, but fewer end up in the ranks of the long-term unemployed than in other OECD countries. In Denmark, less than 25% of those out of work have been unemployed for more than 12 months, compared with one-third across the OECD as a whole. In the EU-15, more than 40% of those out of work are long-term unemployed.

Average job tenure

What caracterizes the Danish enterprises

Denmark has a small, flexible economy which relies on pockets of high-tech and generally small and medium-sized businesses.

1/3 of the labourforce in the public

sector.

The Danish Golden Triangle

Labour market

Unemployment insurance

Focus on better qualifications

Right and duty to accept job offers

High degree of compensation

Four years in the insurance system

High flexibility (easy to lay off people)

Many job openings, 1/3 of private workforce changes jobs in a year

Active labour market policy

Lifelong Learning

The Danish model: Flexicurity

The word ”flexicurity” is a combination of the words ”security” and

”flexibility” and signifies the ability to combine social security and flexibility

on the labour market

The one leg of flexicurity - Security in a broad sense

• Security includes concepts such as:

• Active labour market policies and benefits (ALMP);

• Employment protection (regulations concerning dismissals);

• Employability (ability to find a new job);

Unemployment benefit rates

The Danish unemployment insurance system

• Compensation: 90 pct. of wage

• Max. Amount apprx. 22.000 euro per year

• Average compensation degree: 60 – 70 pct.

• Period: 4 years

• Right and obligation to activation or joboffers

• The unemployment insurance funds plays an active role in active labour market policy and are closely related to the Trade Unions.

Labour market spendingsThe Danish system is an“expensive

investment”

The role of the social partners and the collective agreements

The General Agreement The Cooperation Agreement

Collective agreements

Employers’ associations

TU’s and confederations

Local agreements

Companies Workers

Agreement hierarchy:

DA

Degree of Unionisation,- the Three European Models

Development in the degree of unionisation, 1980 – 2001 (pct.).

1980 1985 1995 2001 The Nordic model Island 86 85 Sweden 78 81 85 78 Finland 67 67 78 78 Denmark 80 82 81 80 Norway 57 57 56 52 The Continental model Belgium 57 57 60 61 Nederland 35 28 24 23 France 19 14 10 10 Germany 35 34 29 23 Schweitzer land 31 28 24 22 Austria 52 52 41 36 Italy 50 42 38 35 The Anglo-Saxon model Great Britain 53 44 32 29

The other leg of flexicurity – Flexibility in a broad sense

• Flexibility includes concepts such as:• Numerical flexibility(adjustment by numbers;

number of workers, hours, shifts, types of contract, life-cycle needs, temporary placement agencies);

• Cost-flexibility (wage and non-wage labour cost, cost of hiring and firing);

• Organisational flexibility (lifelong learning, worker-sharing, organisational development).

The Flexible Labour MarketPeriods of notice:

After 1 years employment

After 5 years employment

After 10 years employment

Share of workforce employed in private sector

Construction workers

3 days 5 days 5 days Approx. 10 %

Industrial and transport workers, etc.

21 days 2 months 3 months Approx. 40 %

Salaried workers

3 months 4 months 6 months Approx. 50 %

Degree of employment protection

Combinations of jobprotection and social security

High social security level

Low social security level

High jobprotection

France Japan

Low jobprotection

Denmark USA

The inter-action between the employment rate and economic

security

The inter-action between unemployment rate and economic

security

Globalisation and new technology have led to a fall in demand for unskilled labour, while

demand for skilled labour has increased

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20

40

60

80

100

80 82 84 86 88 90 92 94 96 98 00 020

20

40

60

80

100University

Lower tertiary

Secondary

Vocational education

Upper sec.

Primary school

Pct. Pct.

Employment by educational level

Participation of labour force in lifelong learning

0

10

20

30

40

BE CZ DK DE ES FR IT HU NL AT PL PT FI SE UK

Source: Commission (2006)

Long journey to life long learning”Matthew rules”

Share of employees who have not participated in formal

training within the last two years

0

25

50%

Kilde: LO’s frihedsundersøgelse, 2003

Salary employed

Lowersalary

employed

Skilledworkers

Unskilledworkers

Survival of the fittest in a globalized world

Key challenges seen from the Trade Unions:

• Ability to have a competitive qualified labour force !• Ability to have a society with social cohesion and a high

degree of social security. The ability to secure flexibility !• To maintain and develop the Flexicurity model especially

the part dealing with life long learning. From job-security to employment security!

• To maintain and develop a high-quality public service! • Good infrastructure in a broad sense!