FEPS 8th May Jan Kaeraa Rasmussen. Chief Economist, LO. Danish Confederation of Trade Unions

Transcription

1 FEPS 8th May 214 Jan Kaeraa Rasmussen Chief Economist, LO

2 GDP/Capita: Top 15 OECD countries Luxembourg Luxembourg Norge Schweiz Schweiz USA USA Norge Holland Japan Sverige Østrig Østrig Belgien Danmark Danmark Australien Island Tyskland Tyskland Canada Canada Belgien Holland Finland Sverige UK Italien Frankrig Australien USD USD

3 Flexicurity in Denmark: A golden triangle Labour market flexibility Unemployment insurance Active labour market policy and life-long learning Social Dialogue & Collective Agreements

4 Evolution, not revolution developement of the model September settlement: Workers organize in unions, employers hire and fire State support of unemployment insurance The state assumes full financial risk of unemployment; improvements in coverage and benefits Active labour market policies take shape Lifelong learning / s 2

5 Labour market Organizations in Denmark Overall union density: 72 pct., down from 77 pct. in 2 The (LO) (Mainly unskilled and skilled workers/clerks in private and public sector) 1 mill. members, 52 pct. The Joint Council for Salaried Employees and Public servants (FTF) (White Collar Workers in finance, teachers, nurses) 35. members, 18 pct. The Danish Confederation of Professional Associations (AC) (Academics) 15. members, 8 pct. Managers og supervisors (LH), Engineers, journalists 175. members, 9 pct. Others (yellow) 13 pct. (up from 6 pct. in 2 L ) Employer organisations pretty stable Private sector 7 pct. Public sector (1 pct.)

6 Regulation arena CA Law Wage Yes No Vacation Yes Yes Paternaity leave (Yes) Yes Wage during leave Yes No Lifelong learning Labour market pension Yes Yes No No Compensation J during sickness Yes Yes, WC Working time Yes Yes - EU Notice and severance pay Yes Yes, WC Apprentice pay Yes No Social dumping Yes Yes

7 True cost of ALMP much smaller than recorded Type of expenses 212 Billion DKK Guidance and upgrading 5,9 Additional expenditure for wage subsidies,6 Other expenses (mentors, aid, transport etc.),7 Activation, total 7,2 Of which: Activation (total) for unemployment benefit claimants (incl. Education of own choice Selvvalg ) 2,3 Other employment arrangements (Adult apprenticeship, job rotation etc.),9 Administration of PES (staff wages, rent etc. ) 3,2 Special contributions/efforts, pools ect.,3 Total, billion DKK 11,7 Total, Per cent of GDP,6

8 Tools Three tools for both the insured and the uninsured: 1. Education and guidance 2. Job training Employed on normal conditions Wage subsidy Both private and public employers 3. Workplace introduction course Employed on public benefit Both private and public employers (Job rotation)

9 FLEXICURITY Flexibility and security are linked Easy to hire and fire - combined with a sound system of unemployment benefits Source: OECD

10 The Flexible Labour Market: Periods of notice After 1 years After 5 years After 1 years Share of workforce employment employment employment employed in private sector Construction workers 3 days 5 days 5 days Approx. 1 % Industrial and transport workers, etc. 21 days 2 months 3 months Approx. 4 % Salaried workers 3 months 4 months 6 months Approx. 5 %

11 Job tenure below one year Pct. 25 Pct Grækenland Italien Luxembourg Tjekkiet Irland Polen Belgien Portugal Ungarn Frankrig UK Tyskland Holland Østrig Spanien Norge Schweitz Island Canada Finland Australien Danmark

12 Dynamics of the labour market: 3% of all workers change job every year 5% of workers only stay in the same job for 3 years 2% of all workers temporary unemployed every year 12% of all jobs are destroyed/created every year Job changes in lifetime: DK 6 EU 4

13 Massive loss of private jobs through 29 never recovered Note: Private employment Source: Danmarks Statistik

14 Real wages dropped the following 1 quarters Pct. Pct Fremstillingsvirksomhed Serviceprægede erhverv

15 Weak Groups pushed out of the labour market

16 Wage increases and unemployment Pct. 12 Frankrig Polen 12 Pct. Arbejdsløshed Sverige Belgien Danmark USA Holland UK Finland Tyskland Norge Arbejdsløshed 2 2 1, 1,5 2, 2,5 3, 3,5 Lønstigning, pct.

17 Total labour cost pr. hour, 212 DKK DKK Norge Sverige Belgien Danmark Frankrig Tyskland Finland UK

18 Share of low-wage workers, 21 Pct. 6 Pct Polen Tyskland Holland Østrig Danmark Norge Belgien Frankrig Finland Sverige Alle Grundskole

19 Fiscal tightening halted danish recovery mia.213- kr Genopretningspakken mia.213- kr BNP prognose Source: AE and Danmarks Statistik.

20 Export has recovered 28Q2 213Q2 pct ,9 1,7 4,9 5, 8,8 1,5 1,9 12, 14,4 14,9 pct ,2 n d n la k e ræ G - 14,7 d n la F in - 7,9 e rg o N - 5,7 n lie Ita - 2,6 e rig v e S - 1,5 s trig Ø a rk n m a D k rig n F ra n ie e lg B K U n d Irla d n la o H d n la y s k T l g a rtu o P n ie a n p S S A U indeks 2 8q1= indeks 2 8q1= Danmark Tyskland Sverige Source: AE, Eurostat and OECD.

21 But internal demand nearly dropped as much as in south Europe (28Q1 212Q2)

22 DYMAMIC EFFECTS OF EDUCATION Number of years in employment Hourly wage Antal år Number of years Percent Antal Procent år unskilled Ufaglært Ttrained Faglært KVU MVU LVU Ufaglært Faglært KVU MVU LVU unskilled trained Note: KVU= short-cycle higher non-university programmes, MVU= mediumcycle university and non-university programmes and LVU= the long-cycle university programmes. Source: AE

23 Life-long learning and employment ratio Beskæftigelsesgrad, pct Island Holland Norge Sverige Tyskland UK Frankrig Belgien Finland Polen Luxembourg Spanien Italien Grækenland Schweiz Danmark Beskæftigelsesgrad, pct VEU- deltagelse, pct. 4

24 BASIC MINDSET BEHIND THE SCANDINAVIAN MODEL: High labour market participation (by both men and women) Even distribution of qualifications Redistribution through progressive taxation (paying for public services within education, childcare, elderly care, health care ect.) Low inequality compared with other countries An efficient public sector where corruption is practically non-existing IS STILL THE WAY FORWARD

25 The way forward in Europe Macropolicy should be more expansive Expanding monetary policy (OECD agree) Expanding fiscal policy/better administration of fiscal pact Coordinated investments in infrastructure etc. Expanding ALMP towards unemployed Fast measures towards the youth upgrading qualifications of low-skilled Enhancing jobtraining in the private sector Education, education, education Youth, including more emphasis on VET Life-long learning and continued upgrading Minimum wages and other working conditions should be lifted Legislation, collective agreements should target these measures Stronger coordination against social dumping

26 The Share of National Income Going to the Top 1 Percent is the Highest Since Share of National Income Earned by Top 1 Percent, Percent Note: Excludes capital gains. Source: September 213 update to Piketty and Saez (23). 212

27 Real Median Family Income Stagnated in the 2s Leading Up to the Crisis, and Fell Sharply in the Recession and its Aftermath Real Median Family Income 212 Dollars 75, 7, 65, 6, , 5, '79 '84 '89 '94 '99 '4 '9 Source: Census Bureau. 27