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Danish private sector wages in ‘real’ increase

People who work in Denmark’s private sector are largely experiencing a ‘real’ increase in their wages, according to a new analysis by an interest organisation for employers.

Published: 15 February 2024 17:48 CET

Danish private sector wages in ‘real’ increase

Wage increases in Denmark's priuvate sector have outpaced inflation over the last year. Photo: Kristian Djurhuus/Ritzau Scanpix

A review from the Confederation of Danish Employers (DA), which represents 11 different private sector employers’ organisations, has found an annual wage increase of 4.9 percent compared with 12 months ago.

During that time, inflation in Denmark has dropped to around 1 percent.

This means that the ‘real’ wage increase – the increase in purchasing power after interest is taken into account – is positive.

An expert told news wire Ritzau that the final quarter of 2023 alone gave a real wage increase of 4 percent in Denmark’s private sector.

“It’s very high from ahistorical viewpoint,” senior economist Jeppe Juul Borre of Arbejdernes Landsbank said.

“Wages have reached their highest pace for 15 years. We have to say that the pace of the labour market with record high employment and collective bargaining agreements are making their mark on wage growth,” he said.

READ ALSO: Danish trade union members vote yes to new bargaining agreement

Real wages suffered in 2022 as inflation began to take hold in Denmark, but collective bargaining agreements the following sought to address the spending deficit felt by consumers.

“In the ten years prior to the decline in real wages, Danes as a whole have experienced their wages increasing faster than prices, and that they thereby got more for what they earned,” Borre said.

The analysis from DA comes ahead of a new round of talks over renewed bargaining agreements this spring.

Member comments

Anonymous - 20 February 2024 at 20:53 CET

Hi do the increased of wages apply to rengøring assistent ?
Ták
Anonymous - 20 February 2024 at 20:54 CET

Hi do the increased of wages apply to rengøring assistent ?
Ták

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ANALYSIS: Is left-wing party’s EU election win good news for foreigners in Denmark?

What happened in the election?

Sunday’s EU elections can be considered a huge win for the Socialist People’s Party (SF).

The party reeived 17.4 percent of the vote, up 4.2 points from 2019, making it the largest Danish party in the EU parliament and giving it 3 of Denmark’s 15 seats.

It also means SF now has as many EU parliament seats as the goverining Social Democrats, who lost 5.9 points to end on 15.6 percent, with their mandate allocation staying at 3.

The two parties are closely aligned in domestic Danish politics, despite SF currently being in opposition and the Social Democrats being the senior partner in a tripartite coalition with the centre-right Liberals (Venstre) and centrist Moderates.

Like the Social Democrats, the Liberals also had a damaging evening. The party lost 8.8 points and is now Denmark’s third-largest in the EU on 14.7 percent and 2 seats – 2 fewer than it had in 2019. However, they remain the largest Danish right-wing party in the EU by some distance, seeing off any challenge from the libertarian Liberal Alliance (LA) along with the far right.

The Moderates, meanwhile, took a single seat in the EU parliament for their lead candidate Stine Bosse with a 5.9 percent share in their first EU election.

READ ALSO: Four key takeaways from the EU elections in Denmark

What is the potential impact on domestic politics?

Speaking on election night, SF leader Pia Olsen Dyhr said the party’s excellent result could be used as a “catalyst” for a new political landscape in Denmark.

The EU election result can fuel further gains for SF when the next general election comes around, Dyhr said in the midst of her party’s celebrations.

“There’s an alternative to this government. There’s an alternative that wants [more] welfare and [to do more for] the climate and we are willing to deliver this in the EU parliament,” she told broadcaster DR.

“It gives us a tailwind and enthusiasm for the party and it means people will be even more ready for local elections next year and the general election further ahead,” she said.

During a press briefing on Monday, chief political analyst at Think Tank Europe Christine Nissen said that the resounding result for SF could indeed have implications for future national elections.

“We won’t see any direct results or change in government right away but there’s no doubt that the power balances are reflected in such a result as yesterday because it was so significant,” Nissen said, highlighting in particular the poor outcome for the Social Democrats.

“I think that looking towards the next national election, the Social Democrats might well have a very strong party on the left. And this will also matter,” she said.

During Prime Minister Frederiksen’s first term between 2019 and 2022, the Social Democrats ruled as a minority government propped up by parties to its left – including SF.

Theoretically, this structure or a similar one could return but with a stronger and more influential SF, if that party can transfer its European vote return to a national one. Neither the Social Democrats nor SF have given any hint of this happening, it should be noted.

Would a more influential SF change anything for foreigners?

The answer to this question is speculative, but SF and Social Democrats are generally allies. SF says it favours a “sensible” approach to immigration and in practice agrees with the Social Democrats more often than not.

SF has, occasionally, set out areas on which it does not agree with Social Democratic policies.

This has included accepting quota refugees from the UN – a question on which the Social Democrats eventually changed stance and agreed with SF.

The smaller party has also advocated more accommodating rules for family reunification of refugees, and opposed some controversial policies such as the “Jewellery Law” which was supported by the Social Democrats (but proposed by the Liberals).

On broad issues such as citizenship and residency permits, SF has not often broken with the Social Democrats during Frederiksen’s time in office – so much so, that the party has been criticised by its own youth wing for taking too tough a line on immigration.

While other left-wing parties like the Red-Green Alliance and Social Liberals, for example, want to change citizenship rules to better accommodate Danish-born non-citizens, SF is yet to explicitly support this.

On work permits, the party sometimes votes against rule adjustments that make it easier to hire from abroad (as can be seen here), ostensibly because one of its core identities is as a workers’ party which protects Danish labour.

It is therefore far from certain, if SF had many more seats in parliament than it does today, that the party would pursue a significantly changed approach on immigration and integration.

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