Employment in Denmark grows for ninth consecutive month but is it sustainable?

The number of people on the jobs market in Denmark increased in October for the ninth consecutive month, but analysts have raised concerns about the sustainability of labour shortages.

Restaurants were among businesses in Denmark to increase employment figures in October 2021.
Restaurants were among businesses in Denmark to increase employment figures in October 2021. Photo: Niels Ahlmann Olesen/Berlingske/Ritzau Scanpix

A further 12,000 people were hired on October, meaning the overall employment figure ticked upwards to 2,895,000. The data were published by Statistics Denmark.

Although the trend has been described as “impressive”, analysts have also raised concerns about its potential to limit economic growth.

“This gives fuel to a growing concern over whether the speed (of employment growth) is too high for the Danish economy. We are not currently in an overheating, but the risk is growing,” senior economist with Arbejdernes Landsbank, Jeppe Juul Borre, told news wire Ritzau.

The current place of employment is not sustainable due to the demand for labour, another expert said.

“The labour shortage is a genuine obstacle for (economic) growth in Denmark and there’s also quite a clear risk that we will come into a period with unsustainable wage increases, which could be the basis of the next crisis,” Danske Bank senior economist Lars Olsen said.

Sectors to have hired the most people in November include the hotel and restaurant industry, where employment figures had been recovering from the impact of the coronavirus crisis.

Recently-announced Covid-19 restrictions are set to impact other sectors, notably the culture and leisure sectors, throughout the winter.

READ ALSO: The new Covid-19 restrictions now in effect in Denmark

Senior economist Tore Stramer of the Danish Chamber of Commerce (Dansk Erhverv) said he did not expect the closure of businesses including cinemas and theatres during the winter to have a significant impact on employment.

“Our expectation is that businesses generally will refrain from letting staff go as a result of the general labour shortage,” Stramer said.

“Finally, experience from earlier waves (of Covid-19) shows that activity quickly increases again once restrictions are lifted,” he added in a written comment to Ritzau.

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Danish study concludes women earn less than men for same jobs

A Danish study has concluded that women are often paid less than men for doing the same job.

Danish study concludes women earn less than men for same jobs

The study, from Copenhagen Business School, analysed the salaries of 1.2 million people in Denmark aged 30-55 years.

On average, women earn 7 percent less despite having the same profession and same job as their male colleagues, researchers concluded.

CBS professor Lasse Folke Henriksen, one of the report’s co-authors, said the results suggests that the overall disparity between the wages of men and women in Denmark is not solely a result of the pay grades in the professions in which they work.

“The equality debate has for some time focused on wage hierarchy in female-dominated and male-dominated professions,” he said.

“But this suggests there is also a wage gap between men and women with the same job function,” he said.

The study does not specify reasons for the wage gap. Henriksen said further research will address this, but existing research offers potential explanations.

“Family relations mean a lot. Women who have children put more work into home care and so on. That could help to explain it,” he said.

Denmark is not the only country looked at by the study.

The study uses data registered from 2015 and finds an overall wage gap for all countries of 18 percent, with women therefore earning considerably less than men on average.

Along with France, Denmark has the smallest wage gap (7 percent) of all countries analysed. Nordic neighbours Norway and Sweden are close behind with 9 and 8 percent respectively.

The largest wage gap found by the study was 26 percent in Japan.

“So Denmark is well placed,” Henriksen said.

“We also have analyses from further in the past so we can see that the wage gap has shrunk over the years. That’s very positive, and that has also happened in other countries,” he said.