Danish Labour News. News from June Contents Commissioner Vestager: The trade union movement plays a key role in European democracy

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1 Danish Labour News News from June 2018 Contents Commissioner Vestager: The trade union movement plays a key role in European democracy Competition cannot stand on its own says the Commissioner for Competition. We need welfare systems, unemployment benefits and investments into new jobs in the industries where companies have relocated or jobs have been automated. Promising new agreement on the platform economy The Danish government and three political parties have concluded an agreement on the framework for the platform economy in Denmark. The right steps are now being taken towards automatic reporting to the Danish tax authorities and more funds for tax control. Economic Council report confirms that the economy is in balance The Danish Economic Council has published its spring report on the Danish economy. The report shows an economy with balanced growth where rising employment is counterbalanced by an increase in the workforce. LO s economic forecast: jobs for everyone within reach LO expects that the economy will continue to expand in the coming years with a growing labour demand and growing private consumption. The assessment is that the Danish economy and labour market are in good shape. Danish Labour News is published by the Danish Confederation of Trade Unions. Visit for more information.

2 Commissioner Vestager: The trade union movement plays a key role in European democracy Competition cannot stand on its own says the Commissioner for Competition. We need welfare systems, unemployment benefits and investments into new jobs in the industries where companies have relocated or jobs have been automated. We must strike a balance to ensure both competition and dynamics while also ensuring that no one is left behind. At the annual Summer Reception of the Danish Trade Union Office in Brussels. The Commissioner for Competition, Margrethe Vestager, addressed the audience and gave an enthusiastic speech. A google search for Margrethe Vestager shows a long list of articles about the huge fines she has dished out to tech giants, banks and car parts manufacturers. However, employment is also quite high on the list of objectives for the Commissioner for Competition. She elaborated on this in the following interview to the newsletter fagligt.eu: Competition generates workplaces I don t think as much about preserving workplaces as I do about the companies that want to contribute to the dynamics and economic growth that generate workplaces. Competition is what drives forward new ideas and which motivates companies to go that extra mile to reach their customers. Employee representatives in SME s play an important role Competition ensures that it isn t just huge corporations that have the opportunity to reach new customers. But small- and medium-sized companies also have a fighting chance of using the single market to run a better business and thereby create more workplaces. And it is particularly the smalland medium-sized companies that she places emphasis on in her work. -They are the ones that pay taxes, create workplaces and take in young workers giving them apprenticeships. - The European economy and business-life would look entirely different if not for this type of companies and the strong role they play. And another characteristic of this type of companies is that employee representatives also play a strong role in them, says the Commissioner. Competition cannot stand alone: we need good welfare systems The trade union movement is a fundamental partner in our European democracy.

3 - Both formally in different councils and during the consultation process with input and ideas, but also informally with the role it plays in a Danish context. - I believe that the trade union movement plays an important role in ensuring that Danes are so relatively positive towards the EU and fond of the Danish democracy. -The Danish model ensures that assets are not only accumulated with the few, but that the ones who contribute to them will also get their share, says Margrethe Vestager. And this does not only apply at the workplace. The overall efforts of the trade union movement to ensure a good welfare system are, according to Vestager, in keeping with a European tradition. It is extremely important that competition does not stand alone but that it is also used to build welfare systems, ensure unemployment benefits and invest in new jobs in the industries where companies have relocated or jobs have been automated. It is a good, European tradition and a balance that we try to strike so that we ensure both competition and dynamics while also ensuring that no one is left behind, she says while also commending the trade union movement for its work and its support for the EU. The trade union movement has contributed to making Danes more EU-positive When we conclude modern trade agreements, the trade union movement is good at pointing to what it means to Danish companies and Danish workplaces. And this is where I think that the trade union movement has a very important role to play.

4 Promising new agreement on the platform economy The Danish government and three political parties have concluded an agreement on the framework for the platform economy in Denmark. -The right steps are now being taken towards automatic reporting to the Danish tax authorities and more funds for tax control, says LO s Vice-President, Nanna Højlund. As a consequence of the agreement between the Social-Liberal Party, the Danish Peoples Party and the Social Democrats, DKK 10m will now be allocated to targeted tax control of platform companies. It is really positive that LO s proposal to ensure targeted control with the digital platforms has attracted attention. New technology and new business models are welcome in Denmark. - However, there must be fair competition. To this end, tax payment is, of course, important just as it is important that legislation is actually enforced. The first steps towards this goal are now being taken says LO Vice-President, Nanna Højlund. Automatic reporting is a win-win The agreement also means that the highest deductions for short-term residential letting require automatic reporting to the tax authorities. Automatic reporting to the tax authorities will not only ensure that platforms and their users contribute to society, but will actually make reporting easier for platform companies thus saving time. We would have preferred an approach that includes the stick as well as the carrot when it come to the platforms that choose not to cooperate. However, I note that the parties have agreed to look at the requirements for automatic reporting to SKAT also for foreign companies. Turning a profit is not the definition of sharing With the agreement, a so-called sharing economy council is established. It will involve the social partners. The agreement is a good first step. However, there are still pending issues when it comes to employers liability towards the persons working on the platform. How do we avoid digital day labourers who don t get pension contributions, pay during sickness, maternity leave etc.? Modern business models take on a responsibility for their employees. It is therefore positive that a council has been established with the participation of the social partners. Here, the social partners, the government and experts in this field can discuss how to establish a fair framework for this area. But I still find it odd that people insist on calling it the sharing economy when turning a profit is the main aim of most platforms. This does not amount to sharing in my world. There is nothing wrong with making a profit but let s be honest, says Nanna Højlund who prefers the more objective term platform economy.

5 Economic Council report confirms LO s assessment: The economy is in balance The Danish Economic Council has published its spring report on the Danish economy. The report shows an economy with balanced growth where rising employment is counterbalanced by an increase in the workforce. There are thus no signs that the Danish economy is The data tell us that we have a sound and robust economy. When companies are short of workers, jobless workers rise to the challenge. This is positive, but companies need to face facts and realise that they will have a shortage of skilled workers in the next five to seven years. I would therefore encourage companies to use the boom times to train more skilled workers and to allocate resources to easing in the long-term unemployed on the labour market says LO-President Lizette Risgaard. More flexible budget The economic experts from The Danish Economic Council (DØR) point to the fact that the current budget act imposes more limitations than necessary. Instead, Denmark should have a multiannual focus in its financial management. I m pleased that the economic experts point to the fact that an overly tight budget act represents an unnecessary obstacle for the Danish economy. During the financial crisis, the politicians limited the scope for action in their fiscal policies. This meant that the recession lasted longer than it otherwise would have. Coming generations should make a note of and learn from this. No need to ease access to foreign labour Furthermore, the economic experts suggest easing the access to foreign labour (from third countries). This does not make sense, however. The current minimum pay that a foreigner has to earn in order to obtain a residenceand work permit in Denmark is comparable with the average wage for electricians or blacksmiths, and it is therefore not necessary to lower that threshold even further. In addition to this, there exists an approved list of work functions that are affected by labour shortages. It therefore makes no sense to make it easier for companies to hire workers from third countries on a lower wage. There are still unemployed Danish workers in need of a job. And all employers have access to 250 million European workers. If that is not enough, they might find it useful to invest more in recruitment. The economic experts also predict modest pay rises and declining real wages. If there was an actual lack of manpower, wages would increase markedly more than they do today. This indicates that the Danish labour market is not under pressure, concludes LO-President, Lizette Risgaard.

6 LO s economic forecast: jobs for everyone within reach LO expects that the economy will continue to expand in the coming years with a growing labour demand and growing private consumption. The assessment is that the Danish economy and labour market are in good shape. These positive circumstances should be used to ensure jobs for everyone, says LO s Chief Economist, Allan Lyngsø Madsen. The Chief Economist s comment is based on LO s economic forecast May 2018, which has just been published. Here, LO predicts a 2 pct. growth in GDP the coming years. At the same time, labour force participation will increase by 90,000 persons from There are many indications that the positive development in economic growth and employment will continue. We do not expect that there will be any risks of overheating in the coming years even though employment will reach an all-time high of 3 million in a few years, says Allan Lyngsø Madsen. The workforce will be growing steadily these years and the potential for further growth in employment is therefore strong. The majority of companies get the workers they need and labour shortages are very modest and almost unchanged compared to last year. In certain areas, however, there are challenges when it comes to attracting employees with specific qualifications, including skilled workers. No one must be left behind The most important thing for the Danish economy now is to ensure that we make use of the favourable situation to ensure jobs for everyone and solid, long-term growth. policy efforts, says LO s Chief Economist. We need to invest in training, education and skills upgrading. This will also contribute to a better match between the qualifications that are in demand and the qualifications held by the workforce. And we also need to remember that the private and public sectors are mutually dependent. We have to set aside funds for accommodating the rising need for public services in keeping with the growth in population and wealth. Public welfare services help create the necessary framework for growth and prosperity. It is absolutely crucial that we invest in those who are marginalised and without a foothold on the labour market. At the moment, we have a golden opportunity to include everyone through social- and employment