Labour market regulation in Denmark during and beyond

Labour market regulation in Denmark during and beyond the economic crisis Erling Rasmussen & Jens Lind AUT, Auckland, New Zealand & Aalborg University, Denmark © Erling Rasmussen & Jens Lind, 2013

Overview Focus on the ‘Danish Model’ of ER Includes supporting ‘flexicurity’ approach Successful but under various pressures • Paper points to 3 key types of ‘threats’ • Focus: changes in ER structures & behaviours Part of larger DK-NZ comparative study Regulatory & systemic NZ changes Path dependency & changing key features © Erling Rasmussen & Jens Lind, 2013

How can this work? “Despite high taxes, high unionization rates, and egalitarian income distribution they demonstrated from the mid-1990 s to 2008 that it was possible to improve competitiveness, secure macroeconomic balances, lower unemployment, and engage a high proportion of women, youngsters, and senior people in economic activity, while state institutions played a large role in the economy” (Kristensen & Lilja, 2011: vii). © Erling Rasmussen & Jens Lind, 2013

Contextual & regulatory changes Contextual change Economic & public policy thinking moves away from traditional ‘social democracy’ ‘Flexicurity’ is undermined • Does emphasis on ‘flexibility’ deliver dynamics? Public sector employers change tack ‘collectivism’ v/s management decisions • Cost-cutting aligns with managerial control © Erling Rasmussen & Jens Lind, 2013

DK’s ER regulatory approach DK has a voluntaristic tradition Build on collectively-agreed regulation • More scope & high coverage since 1980 s Strong workplace employee participation structures (eg. OHS Com. , Works Councils) Move to adjust to market & EU changes Growing concerns about non-influence • Issue 1: union ability to influence outcomes • Issue 2: atypical work & workforce migration © Erling Rasmussen & Jens Lind, 2013

4 key ‘threats’ to DK’s ER model Weakening of trade unions Fewer members & new accommodating unionism Decentralisation of collective bargaining ‘ability to pay’ & less solidaric wage setting EU influence & rise in migrant labour More transient workforce limits solidaric behaviour Exploits lack of coverage of low wage work Employment/unemployment policies Less ‘active labour market policy’ & security © Erling Rasmussen & Jens Lind, 2013

Is the end nigh? Too early to call Still high bargaining coverage & union influence ‘Danish Model’ has been under threat before Labour market performance isn’t substandard Change in union role & behaviour This has wider implications re: ‘knowledge society’ Loosing ability to influence on work & workplaces Main worry(? ): employer reactions © Erling Rasmussen & Jens Lind, 2013

Conclusions Danish changes have wider theoretical & empirical labour market implications Successful model is not pre-ordained • Continuation: how much can key hallmarks change? Model highlights alternatives to standard ER & public policy prescriptions from OECD, etc. Have changes undermined ‘Danish Model’? Economic & social context is very important Less union influence on ER processes & outcomes Growing concerns around atypical employment © Erling Rasmussen & Jens Lind, 2013