Unions oppose reduction in minimum wages in order to increase integration of immigrants

A report published in January 2002 by a 'think tank' set up to examine the integration of immigrants in Denmark states that old systems and procedures have to be reconsidered if integration through attachment to the labour market - considered a key factor - is to become a reality. One proposal is to reduce collectively agreed minimum wages for new immigrant workers, but this has been rejected by the trade unions.

In 2000, the then Social Democrat-led government set up a so-called 'think tank' to examine the integration of immigrants. The intention was that the appointed members of the body were to look at integration in Denmark in a broad perspective, both by making projections about the number of foreign national in Denmark over the next 20 years, and by coming up with new proposals for better integration methods.

On 28 January 2002 – the day before the new Liberal-Conservative coalition government tabled its proposal for the 2002 Finance Act – the think tank published a new report entitled The demographic development 2001-21 – possible scenarios. One of the conclusions of the report is that the number of immigrants in Denmark will increase by 88.4% over the next 20 years (from 396,000 in 20001 to 746,000 in 2021). About 60% of all immigrants will come from less-developed countries such as Turkey, Pakistan and Somalia. No matter how restrictive an immigration policy the government pursues, there will in all cases be a considerably higher number of persons with a different ethnic background in Denmark in 20 years' time.

In an article published on the same day, the chair of the think tank, Erik Bonnerup, presented a possible example of how the 'necessary labour market integration' of immigrants can take place. The main argument presented in the article – as in the report – is that integration measures must be much more flexible if the objective of labour market integration is to be achieved. In a broader perspective, successful labour market integration can be achieved only through a strong labour market attachment. In order to ensure access to the labour market for immigrant groups, it will be necessary urgently to introduce specific measures which break with former practice and rules. Openness and flexibility are the keywords for both employers and employees. It is recommended that:

  • immigrants must have contact with the labour market shortly after their arrival in Denmark;
  • teaching of the Danish language must be strengthened and take place in the enterprises;
  • greater recognition should be given to the skills and qualifications which immigrants already possess;
  • collective agreements should allow the possibility of paying a special 'integration wage' to new immigrants; and
  • the municipal authorities should grant a flexible wage subsidy to enterprises in order to make it more attractive to recruit foreign nationals, irrespective of their qualifications

According to the report, the financial motivation for immigrants to take up a job is not sufficiently strong. For example, in the case of a married couple, one of the partners will have to earn a very high wage if it is to pay for them to take a job instead of both partners being on social assistance. This might indicate that it would be a good idea to lower the level of social assistance, states the report, but the introduction of new rules for the calculation of deductions from social assistance in the case of earned income, or the introduction of a special minimum basic tax allowance, could also be possible instruments in the efforts to make work pay.

For their part, according to the report, immigrants must show a will to comply with workplace standards on gender equality in Denmark.

In other interviews, the chair of the think tank added that provisions in collective agreements should abolish contractual minimum wages in order to make it possible to introduce the abovementioned special integration wage for new immigrants. He argued that it is not appropriate to demand that these groups should receive the full contractual wage from their first day on the labour market.

Except for the proposal to reduce the minimum wage, the think tank's other proposals are more or less identical with those contained in a joint proposal on integration published by the Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO) and the Danish Employers' Confederation (Dansk Arbejdsgiverforening, DA) on the same day (DK0201166F). Instead of interfering with agreed minimum wages, LO and DA propose using apprentice wage rates for immigrants at the start of their employment.

The think tank's proposal to reduce the minimum wage is flatly rejected by the trade unions. The president of the General Workers' Union (Specialarbejderforbundet i Danmark, SiD), Poul Erik Skov Christensen, says that the contractual minimum wage is already effectively a labour market integration wage. The minimum hourly wage in the industrial sector is DKK 84.40 (EUR 11.36), which is DKK 25 lower than the actual average wage for SiD members in industry. The trade unions further argue that no highly specialised enterprises would currently recruit employees 'irrespective of their qualifications'- as proposed by the think tank for immigrants - even if there were a substantial wage subsidy from the municipal authorities.

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