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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Copenhagen Municipality demands payment from company accused of underpaying drivers

The Copenhagen Municipality wants the company Intervare, owner of online shopping firm, to pay back millions of kroner amid accusations it underpaid drivers.

Copenhagen Municipality demands payment from company accused of underpaying drivers

A new report on social dumping, undertaken by Copenhagen Municipality, states that the city has demanded 4.7 million kroner from Intervare for unpaid wages for 72 drivers who delivered shopping to residents in the city, political media Altinget reports.

The company was subcontracted by Copenhagen Municipality to deliver goods to vulnerable residents.

According to the city council, however, Intervare systematically underpaid staff while also requiring them to work for 12 hours without breaks and denying them sickpay, Altinget writes.

“Although most companies behave properly, it is clear that there are still some bad eggs amongst the companies the municipality works with,” the Mayor of Copenhagen, Sophie Hæstorp Andersen, told Altinget.

“In that light, I’m happy that our control checks ensure a record high rebate to the workers who have been let down,” she said.

Intervare has repeatedly denied underpaying drivers who made deliveries on behalf of Copenhagen Municipality., owned by Intervare, is Denmark’s biggest online grocery shopping service and experienced considerable growth during the Covid-19 crisis.

Social dumping is the practice of employers using cheaper labour than is usually available at their site of production or sale, for example by using migrant workers and paying them less than local minimum wages or outside the terms of local bargaining agreements.

READ ALSO: EXPLAINED: What is a Danish collective bargaining agreement?