By Ida Auken / Special To The Washington Post
It must be extremely expensive to eat at McDonald’s in Denmark, or so Americans could be forgiven for thinking after Rep. Alexandria Ocasio-Cortez, D-N.Y., noted that the chain’s workers here in Denmark are paid $22 an hour and get six weeks’ paid vacation a year.
“It is utterly embarrassing that ‘pay people enough to live’ is a stance that’s even up for debate,” she tweeted, as her fellow lawmakers battled over whether to include a $15-an-hour minimum wage mandate in the pandemic relief bill has has been adopted by Congress.
Well, our Big Macs are not that expensive. A burger in Denmark costs roughly a dollar more that it costs in the United States. But this has nothing to do with a minimum wage. We don’t have one. What we have is the Danish labor-market model, also known as “flexicurity” because it offers flexibility and security for workers and employers alike. Ocasio-Cortez is right to look to us Danes for inspiration; she is not right in linking Danish McDonald’s workers’ pay to her call for a government-controlled minimum wage.
The Danish model is a decentralized system in which pay and working conditions are established by collective-bargaining agreements between trade unions and employers’ organizations. Our unions are strong, mostly because employers and employees both gain from the relationship. If the labor agreements are not respected, workers have the right to go on strike and, conversely, the employers have the right to lock out workers. The state interferes only if negotiations break down. They rarely do.
Workers benefit from flexicurity because the social safety net includes universal health insurance and paid sick leave, and collective-bargaining agreements generally include paid maternity leave and a pension plan, as well as good wages. Workers who pay into an unemployment insurance fund get up to two years of unemployment benefits after losing their jobs, and the government runs aggressive training and counseling services to help them return to work quickly. As for employers, they can shed workers easily because severance pay and termination notices are limited, there are few procedural hurdles, and the government picks up the tab on benefits such as health care. That same streamlining allows employers to hire workers back quickly when demand for their products or services goes up. Win-win.
In Denmark, we have very few working poor who can’t sustain themselves and their families with a full-time job. Not even a low-skilled or unskilled worker has to take multiple jobs to make a living, if they work in the parts of the labor market covered by collective-bargaining agreements. All public employees are organized according to such agreements. For the private labor market, they account for three out of four companies. Danes do have industries that aren’t covered by collective agreements, especially those that include companies arising from the growth of the platform — or gig — economy. This is a problem, and we have started looking for solutions.
Yes, Big Macs aside, goods are generally more expensive here, and taxes are high, but the costs are offset by the strong social safety net.
We are a wealthy country with a very high employment rate. In the fourth quarter last year, even during a pandemic, 74 percent of the working-age population was employed, compared to 67.9 percent in the United States, according to the Organization for Economic Cooperation and Development. We recover more quickly from crises because of the flexicurity model, too. Just as companies can easily scale down during economic downturns, they can scale up fast. When covid-19 shut down our society, Denmark saw rising unemployment just as other countries did. But we also saw an immediate positive influence on the statistics as soon our working life got back closer to normal. And the people who lost their jobs did not need to fear for their future because of our high levels of social protection and vigorous labor market policy.
According to the Employment Relations Research Centre at the University of Copenhagen, Danes in general are happy with the Danish model, not only because it makes economic sense but also because it creates a sense of common purpose that ensures the dignity of every citizen. It can also encourage social mobility. For example, my colleague Leif Lahn, a fellow member of the Danish Parliament, grew up in a poor family 50 years ago. His father was an unskilled worker at the harbor in Aarhus, Denmark’s second-largest city. Leif recalls how he lived in an impoverished neighborhood, and how his dad pointed to the rich families in the wealthy neighborhood: “You will never be able to live like them,” he would tell Leif. History proved his father wrong. Leif began his working life driving trucks at the harbor. Because of collective bargaining, he and his fellow workers were ensured decent pay. In 1995, he moved into the very neighborhood his dad had said was beyond his reach. He still lives there.
Leif’s story is not uncommon in Denmark, where the working class can be lifted into the middle class. This mobility stabilizes our society and ensures that our cities are mixed. By and large, we have avoided being split into gated communities and projects. Our kids grow up getting to know children of other economic, educational and social backgrounds, which means less of the political polarization we see in other democracies and reinforced by social media.
The United States, by contrast, is experiencing rising inequality. The median income has risen nearly 40 percent since 1980. But if you look at the median income of just the middle class, it has increased only marginally. Fighting inequality is one of the most pressing tasks facing world leaders today. Is a mandated minimum wage the answer? Not in Denmark. And perhaps not in the United States, either, if other economic policies do not change, as well.
Ida Auken is a Social Democratic Party member of the Danish parliament and author of “Dansk,” a book about Danish identity and values
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
