Rise in Danish unemployment ‘sign companies letting staff go’

The number of people out of work on the Danish labour market continues to creep upwards, and data suggests it can no longer be written off to the arrival of job-ready Ukrainian refugees. 

Rise in Danish unemployment 'sign companies letting staff go'
File photo showing entrance to a Danish job centre. Unemployment has crept upwards for the third consecutive month. Photo: Søren Bidstrup/Ritzau Scanpix

According to data from Statistics Denmark, about 2,800 more people were unemployed in July than in June.

Recent increases in unemployment numbers have been attributed to the arrival in Denmark of refugees from Ukraine who are declared fit to work shortly after being granted residence.

But the number of unemployed Ukrainians increased by only 200 in July. 

The latest figures are instead a sign that “companies have quietly started to get out the redundancy notices,” Sydbank chief economist Søren Kristensen told news wire Ritzau. 

Despite what appears a concerning trend, overall unemployment remains low. The unemployment rate of 2.7 percent, or about 77,800 people out of work, is among the lowest ever recorded in Denmark.

The number of people considered long-term unemployed – not in employment for 80 percent of the previous year – is currently the lowest it has been since records of the metric began in 2007.

An increase in the number of unemployed could indicate a healthy cooling of the red-hot Danish employment market, in which companies have struggled to fill open roles, Kristensen said. 

“We have to recognise that the risk of overheating in the economy is quite real. The combination of such low unemployment and such high inflation is a breeding ground for unsustainably high wage increases,” the economist told Ritzau in a written comment.

“We can’t say this is what we’re seeing at the moment,” he added, noting that the “risk has fortunately decreased after today’s numbers”.

Economists expect further increases to unemployment numbers in the near future.

“We still expect to be looking at a period in the autumn and winter where unemployment increases further. Not necessarily dramatically, but an increase nevertheless, which will show that the situation on the labour market and in the economy is changing significantly,” he said.

READ ALSO: Danish businesses repeat call for foreign workers amid labour shortage 

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Age charity wants Danish schools opened abroad to solve worker shortage

Age concern charity DanAge (Ældre Sagen) says Danish social care education programmes should be opened in foreign countries to address the chronic labour shortage suffered by the sector.

Age charity wants Danish schools opened abroad to solve worker shortage

Danish welfare courses that take place abroad are a potential solution to a serious lack of staff in elderly care, the CEO of DanAge, Bjarne Hastrup, told newspaper Berlingske.

Germany, Spain, India and the Phillippines are potential locations for the schools, according to the charity.

“And my question to politicians would be: ‘If you’re not going to do this, what are you going to do?’,” Hastrup told Berlingske.

In addition to giving students social care qualifications, the schools would also teach them the Danish language and culture, Hastrup suggests.

Nurses from India and the Phillippines should also be allowed to travel to Denmark and work in elderly care while waiting for the nursing qualifications to be authorised by Danish authorities, DanAge proposes.

READ ALSO: Why does Denmark take so long to authorise foreign medical professionals?

If the foreign nurses are denied authorisation, they should then be offered an alternative nursing qualification, which they would be able to study for in Denmark while continuing to work in elderly care, the charity said.

The proposal comes as DanAge on Thursday hosted a debate with Danish political party leaders at which it hoped to push for more political action on the sector’s labour shortage.

DanAge also wants au pairs – who can be granted temporary work and residence permits in Denmark under special au pair rules – to be offered a new work permit on expiry of their au pair contracts so that they can opt to stay in Denmark and work in the elderly sector.

Hastrup told Berlingske that the idea of training future staff in schools based abroad could be transferred to other areas of the health service which are also experiencing labour shortages.

It is unclear at the current time whether the charity’s proposals will garner political backing or momentum.

Danish work permit rules for non-EU nationals are restrictive, with one of the most popular pathways, the Pay Limit Scheme, requiring employers to pay a minimum wage high enough to prevent hires in many social care roles.

READ ALSO: How can you get a work permit in Denmark if you are not an EU national?