US presidential candidate Bernie Sanders has often pointed to Denmark as an example to counter what he calls the “obscene” wealth gap in his own country.
“It is immoral and wrong that the top one-tenth of one percent in this country own almost as much wealth as the bottom 90 percent,” Sanders said in last week’s Democratic debate before saying the the US “should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people”.
But income inequality has steadily been on the rise in Denmark. The nation’s Gini coefficient, considered the best tool for measuring a country's inequality, is growing faster than anywhere else in Europe and the think-tank Cevea said last year that wealthiest one percent of Danes – about 46,000 individuals – own nearly one third of the country’s total wealth.
See also: Denmark's one percent problem
This week, Denmark’s Economic Council of the Labour Movement (Arbejderbevægelsens Erhvervsråd – ECLM) released a new report showing that income inequality has been increasing since the mid 1980s and really took off after 2003.
According to ECLM, the richest ten percent of Danes saw their incomes rise by 30 percent between 2003 and 2013 while the poorest ten percent saw their actual wages fall over the same period.
Since 1985, only the wealthiest 20 percent of Danes have seen their disposable incomes increase, while all other groups have experienced a financial setback. The hardest hit are the nation's poorest ten percent, who had a relative difference of -14.1 percent over the period.
“Put simply, there has been a significantly larger difference between the top and the bottom and the explanation is that the people at the top of the income pyramid have had a large combined income growth while the poorest have experienced an actual decline in their income,” the report read.
ECLM’s report also showed that Denmark has been overtaken by several other European countries when it comes to equality.
“In an international perspective, inequality in Denmark is relatively low – particularly if one uses the OECD’s analysis. According to Eurostat however Denmark is not among the most equal societies in Europe. Many of the countries we normally compare ourselves with have lower inequality, for example Sweden, Norway, Iceland, Belgium and Austria,” ECLM wrote.
The economic council added that Denmark is failing to meet point ten of the UN’s newly-approved 2030 goals which calls for a reduction of inequality within and among countries. Specifically, the goal calls for the income increases of a nation’s poorest 40 percent to be greater than that of the entire population.
“If you look at historic Danish data, that hasn’t been the case since 1985. Income increases for the 40 percent with the lowest incomes have, especially in the last ten years, been significantly less than those of the entire population,” it stated.
The ECLM said that if Denmark is to meet the UN income equality goals the country needs “to change course”.
“The latest initiatives from the government – an ‘integration benefit’ for an amount corresponding to the [student stipend] EU and a new cap to [the unemployment benefit known as] kontanthjælp go in the completely wrong direction,” the report’s authors wrote.
The ECLM recommends increasing education amongst the lowest income groups and investing in enhancing the qualifications of unskilled workers in the labour market.