Prime Minister Mette Frederiksen presented the party’s plan for future wage increases in the public sector on Tuesday, one week ahead of the parliamentary election on November 1st.
Spending on public sector pay will be phased in from 2024 and would be subject to so-called tripartite negotiations with trade unions and employer representatives, in line with the Danish labour model.
At Tuesday’s briefing, the government presented seven “principles” relating to how its spending programme would look following labour market negotiations. The Social Democrats did not reveal which professional groups would benefit from pay rises.
The seven principles are better recruitment; more equal pay between professions; more focus on roles with close public contact; making full-time employment more attractive compared to casual or part-time terms; less use of stand-in or vikar staff; pay rises based on reason and objectivity; and economic responsibility.
With regard to economic responsibility, Frederiksen said that the private sector must be involved in setting wages because it is responsible for exports, which are crucial for the economy.
The proposal is somewhat unusual in Danish politics because it appears to break with the established ‘Danish model’ for labour, whereby labour market representatives – trade unions and employers, including state employers like regional health boards – negotiate and agree on wages and other working terms through collective bargaining or overenskomster. This is done without political involvement.
“We have a shared problem. If we don’t do anything, we will see our welfare society crumbling slowly before us,” Frederiksen said. The PM said that the timing of the announcement was not decided with the election in mind.
The need to negotiate wage spending with labour market organisations is the reason for not naming specific sectors that will benefit from pay rises, the government stated during the briefing.
Both private and public sectors are experiencing major labour shortages, so a state-funded pay increase in the public sector must be implemented carefully so as not to destabilise the private sector.
However, Frederiksen noted that there are problems in the “health sector, elderly care, preschool and prison service” and that money must be diverted to areas suffering from a shortage of staff.
As such, some sectors of the public service could receive pay rises under the government plan, but others may not benefit.
As part of the presentation, the government set out three examples by which between 155,000 and 280,000 public sector employees in Denmark could receive between 2,000 and 3,000 kroner extra per month.
Trade unions have generally responded positively to the announcement, with employer representatives critical, according to broadcaster DR, which has spoken to a number of labour market spokespersons.
The leader of trade union branch organisation Fagbevægelsens Hovedorganisation (FH), Lizette Risgaard, told DR the messaging from the government was “important”.
“The problems with finding staff won’t go away on their own. It’s obvious that we need all the tools on the table to find solutions in the public sector because we are faced with a very big challenge,” she said.
The leader of the Danish Nurses’ Union (Dansk Sygeplejeråd), Grete Christensen, said it was “very good to see money put aside to give more in wages to those who have the biggest recruitment difficulties” and to those who “work with people every single day”.
The CEO of the Danish Chamber of Commerce (Dansk Erhverv), Brian Mikkelsen, called the plan “wrong”.
“It’s a destructive way to go and an attack on the Danish labour model. We cannot have a situation where politicians choose some favourite people who get wage rises which others don’t get,” he said.
“If some groups get higher salaries, others will also want that. That means our competitiveness will fall and that can take labour away from the private sector,” he said.