The Danish labour market
Denmark's famous labour market model - Flexicurity - is widely admired for its ability to reflect the needs of employers while, at the same time, safeguarding the welfare of employees.
The model has three core elements:
1. Employers can hire and fire at will, without excessive costs for dismissing employees. Litigation surrounding dismissals is uncommon.
2. Employees who join and pay subscription fees to an A-kasse (unemployment insurance fund) get up to two years' dagpenge (unemployment benefit) after losing their jobs.
3. The Danish government runs education and retraining programs and provides counselling services to get unemployed people back to work as quickly as possible.
Furthermore, the Danish state provides subsistence allowance kontanthjælp (subsistence payments) for people who lose their livelihood due to illness, divorce or unemployment, and who does not qualify under other social welfare schemes such as pension or unemployment benefit.
Flexicurity is based on a century of co-operation
The Danish Flexicurity model is based on a long tradition of dialogue between employer associations and labour unions. Wages and working conditions are based on collectively-negotiated agreements, and the government rarely interferes.
For example, there is no legal minimum wage in Denmark. Instead, the relatively high wages are set as part of the regular negotiations between the employers and labour unions. Around 67 % of Danish workers are union members.
Strikes are uncommon in Denmark, because both sides feel a duty to reach an agreement that will benefit society at large.
Flexicurity makes Danes more open to globalisation
The flexible labour market and reliable safety net have helped make globalisation more palatable for Danes - they feel confident that if one job disappears, another is likely to arise in its place.
This also means Danes feel comfortable changing jobs in order to advance their careers. Each year, about 25 % of the Danes who work in private industry change jobs.
The ease of hiring and firing also make Danish employers more willing to take a chance on people who might otherwise be left outside the labour market.
The EU endorses Flexicurity
Inspired by the success of the Danish labour market, the European Commission has integrated Flexicurity into its employment strategies.
The Danish approach to labour market reforms is a source of inspiration to many countries, France included. Denmark is a role model.
