What is in Danish government’s plan for public sector pay?

The governing Social Democrats said on Wednesday that they will set aside up to three billion kroner for potential health sector pay increases, should the party retain power after next week’s election.

What is in Danish government’s plan for public sector pay?
Senior Social Democrats present the party’s plan for public sector wages. Photo: Mads Claus Rasmussen/Ritzau Scanpix

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.

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Moderate party downplays importance of joining new Danish government 

After another round of negotiations with acting Prime Minister Mette Frederiksen, Moderate leader Lars Løkke Rasmussen says it’s beside the point if his party joins Frederiksen’s vision of a ‘broad, central’ government.

Moderate party downplays importance of joining new Danish government 

Rasmussen, who was Prime Minister before Frederiksen when leader of the Liberal (Venstre) party, led the newly-formed Moderates into parliament in their first election on a platform of installing a centrist government.

The Moderates have a relatively strong hand in the negotiations with their 16 seats from 9.3 percent of the vote share in the election, which took place one month ago.

“For us, it’s not a separate ambition to be part of such a government,” Rasmussen said outside of the prime minister’s official residence at Marienborg on Wednesday.

“Whether we are in or not is less important. But we want to put ourselves in a position where we can influence the content. That’s what matters,” he said. 

“It strikes me that Mette Frederiksen and I go a long way towards sharing the analysis of what’s good for Denmark,” he added.

READ ALSO: What does Denmark’s Liberal party want from government negotiations?

Rasmussen has previously backed a potential government involving the Social Democrats and Liberals along with the Moderates, calling it an “excellent starting point”.

But he said on Wednesday that his party could lend support to a central coalition without being part of the government itself.

The Moderates could be influential “by forming the parliamentary basis for a government which consists of parties from both sides of the infamous political centre,” he said.

Although the centrist party is heavily involved in talks led by Frederiksen, it does not have decisive seats which could give either the left or right wings an overall majority. The left wing ‘red bloc’ took a single-seat victory in the November 1st election, meaning a left-wing government could be formed without the support of the Moderates.

But Frederiksen has eschewed the option of a government reliant on the support of the parties furthest to the left, the Red Green Alliance and Alternative, maintaining her pre-election pledge to seek a coalition across the centre.

There is no majority which could put a ‘blue bloc’ or conservative government in place.

READ ALSO: Five things to know about the Danish election result