Denmark: Integration of refugees in the labour market

In September 2015, Denmark's Prime Minister invited the social partner confederations to tripartite discussions about the integration of refugees into the Danish labour market.

The invitation from Prime Minister Lars Løkke Rasmussen (Liberals) follows a government proposal to introduce a scheme of ‘phased-in wages’ (indslusningsløn) for refugees, designed to facilitate their entry into the Danish labour market. According to the government, a wage below the sector minimum wages would make it more attractive for employers to hire refugees.

The meeting took place on 24 September, and on the same day the social partners published their views on the introduction of phased-in wages.

In a common letter to the daily paper Berlingske Tidende, the chair of the Confederation of Danish Employers (DA) and the chief executives of its two largest member associations – the Confederation of Danish Industry (DI) and the Danish Chamber of Commerce (Dansk Erhverv) – declared that in principle they were not against introducing a scheme that would facilitate a speedier entrance to the labour market for refugees. They pointed out, however, that ‘wage setting’ was solely a matter for the social partners through collective bargaining, not for the government to decide through legislation nor a matter for tripartite discussion. And in any case, such schemes were already in place.

For instance, the so-called ‘staircase’ (or transitional) model is directly aimed at introducing refugees to the Danish labour market in a step-by-step process. The first step (4–8 weeks) is to identify the competencies of the individual refugee, combined with Danish language lessons. The second step is a trainee placement in an enterprise without expenses for the employer, followed by more Danish lessons. At this point, the refugee is ready to enter a job with a wage subsidy (duration 26–52 weeks).

The point is, the employers say, that company training is free for the employer and even when the refugee enters a wage-subsidy job the expenses for the employer are still lower than the suggested phased-in wage of around €9 an hour. For this reason, the employers argue that a phased-in wage is not a preferable alternative to the existing scheme.

The two employee confederations, the Danish Confederation of Trade Unions (LO) and the Confederation of Professionals in Denmark (FTF), claim that a phased-in wage in a worst case scenario will maintain refugees in poverty. The only alternative, they believe, is education and upskilling. LO Secretary, Ejner Holst, argues that 'a phased-in wage is not a tool for better integration – it embodies a general interest in forcing down wages in the Danish labour market.'

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