Are real wages increasing in Denmark after period of inflation?

Ritzau/The Local
Ritzau/The Local - [email protected]
Are real wages increasing in Denmark after period of inflation?
Spring bargaining agreements are resulting in higher real wages and therefore a better chance of avoiding an empty wallet. Photo by Towfiqu barbhuiya on Unsplash

The second quarter of this year saw a general increase in wages for people employed in Denmark, following a series of collective bargaining agreements earlier in 2023.


According to the national organisation for employers, Dansk Arbejdsgiverforening (DA), wage costs for members increased by 3.6 percent in the second quarter compared to the corresponding period in 2022.

The figures, published by DA Monday, are the first to come out since a series of new collective bargaining agreements were reached between employers and trade unions in the early spring, setting a pattern for wage increases in response to last year’s period of inflation.


The annual increase was 0.5 percent higher than that seen in the first quarter.

The trend shows that Denmark’s labour market has coped well with last year’s heightened inflation as well as interest rate hikes, DA’s lead economist said.

“We can also state that the second quarter was the quarter in which the trend for real wages really changed direction,” DA senior economist Ander Borup Christensen told news wire Ritzau.

An increase in “real wages” or inflation-adjusted wages means that wages go up more than inflation, increasing the effective purchasing power of the wage earner.

READ ALSO: What salary can you expect to earn in Denmark?

Price increases on both energy and goods have slowed down in Denmark in 2023 after peaking at around 10 percent late last year.

May’s inflation rate was 2.9 percent, down 2.4 percent from April. This means that prices are 2.9 percent higher on average than a year ago. As such, prices are still increasing but by considerably less than when inflation was 10 percent.


Real wages went up by around 2.75 percent between the first and second quarters, according to Christensen’s estimate.

“The increases Danes’ buying power and will support higher consumption in the coming quarters,” he said.

The changes in real wages between the quarter are evidence that the wage increases provided for by the spring bargaining agreements have begun to manifest. The data are preliminary, however, with final figures not available until August.


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