Increase in working time and employment levels in 2006

A recent survey by the Economic Council of the Labour Movement reveals that both working time and employment have increased in Denmark. In 2006, all employed people worked, on average, 20 minutes longer each week, compared with 2005. From 2005 to 2006, the total actual working time rose by 2.6% due to employment growth of 1.9% and an average increase of 0.7% in the number of working hours per employed person. The council concludes that labour market flexibility is increasing.

The national working time accounts – which are the new chief source of data on employment and working time, contained in the national accounts of Statistics Denmark (Danmarks Statistik) – show a rise of 2.6% in actual or performed working time from 2005 to 2006. This percentage covers an overall rise of 1.9% in the number of people employed, corresponding to an increase of just over 50,000 persons; moreover, it reflects a rise of 0.7% in the number of working hours per employed person, corresponding to an additional 12 hours a year, or 20 minutes a week, per employed person. In all of the main sectors in the economy, employment has risen, with the largest increase recorded in the building and construction sector. These are among the findings of a survey published in April 2007 by the Economic Council of the Labour Movement (Arbejderbevægelsens Erhvervsråd, AErådet), on the basis of the national working time accounts published by Statistics Denmark. According to AErådet, the figures largely reflect the high flexibility of the Danish labour market.

Employment levels

If the average working time had not increased in 2006, employment should have risen by 70,000 persons in order to obtain the same progress in actual working time of 2.6%. In other words, the rise in the average working time in 2006 is equivalent to 20,000 employed persons (70,000 minus 50,000 persons). The development from 2005 to 2006 represents a continuation of a trend that has emerged in the two preceding years. Between 2003, when the upswing began, and 2006, the average working time rose by 31 hours a year, corresponding to 53,000 employed persons.

Table 1: Number of and increase in employed persons, 2003–2006
Table 1 shows a total increase of 1.9% in employment from 2005 to 2006.
  2003 2004 2005 2006 2005–2006
.Sector .No. of persons employed (thousands) Increase in no. of persons employed (thousands) % increase
Building and construction 166 168 177 187 10.3 5.8%
Transport, postal services, telecommunications 173 171 170 172 2.1 1.2%
Agriculture, etc 110 107 106 107 1.1 1.1%
Manufacturing industry 417 400 392 392 0.5 0.1%
Finance, business services 372 379 393 410 17.2 4.4%
Trade, hotels and restaurants 489 495 500 517 16.2 3.2%
Public and personal services 959 969 971 974 2.9 0.3%
Total 2,685 2,688 2,708 2,759 50.2 1.9%

Source: AErådet based on Statistics Denmark, National Accounts, December 2006

The results in Table 1 show how employment is broken down by main sectors and how it has developed between 2003 and 2006, with the focus on the increase between 2005 and 2006. Although employment rose in all sectors, the highest increase can be found in building and construction, where employment has risen by 5.8% or 10,300 persons. The next highest increase can be found in the finance and business services (including temporary agency work) sector, where employment rose by 4.4%. The level of temporary agency work is still increasing and now constitutes 1% of the total workforce (DK0610029I, DK0212103F).

Working hours

As the findings in Table 2 show, employees in the building and construction sector worked the most number of hours (1,795 hours) in 2006. This is equivalent to 40 hours a week, or three hours more than that collectively agreed at national level – that is, 37 hours a week or 1,665 hours a year. Nevertheless, the increase in working hours in this sector is not very significant. The largest escalation in working hours in building and construction was recorded between 2003 and 2004, amounting to an increase of 49 hours, or from 1,710 to 1,759 hours. In 2006, the largest rise in the number of working hours took place in agriculture, where an increase of 21 hours was recorded compared with the previous year. The reason for this rise could be attributed to the fact that the terms of the transition scheme concerning workers from eastern Europe have been made easier for companies since the beginning of 2006, in relation to the hiring of workers from these countries (DK0605029I). In fact, Denmark’s agriculture sector, followed by building and construction, are the main employers of workers from these countries, in particular from Poland and the Baltic countries.

Table 2: Number of and increase in working hours per employed person, 2003–2006
Table 2 shows a total increase in working hours of 12 hours per employed person from 2005 to 2006.
  2003 2004 2005 2006 2005–2006
  .Total no. of working hours Change in no. of hours % change
Building and construction 1,710 1,759 1,796 1,795 -1 -0.1%
Transport, postal services, telecommunications 1,735 1.760 1,773 1,781 8 0.4%
Agriculture, etc 1,719 1,725 1,751 1,772 21 1.2%
Manufacturing industry 1,599 1,618 1,646 1,659 14 0.8%
Finance, business services 1,543 1,550 1,553 1,567 15 0.9%
Trade, hotels and restaurants 1,515 1,507 1,522 1,540 18 1.2%
Public and personal services 1,502 1,496 1,506 1,513 8 0.5%
Total 1,562 1,566 1,581 1,593 12 0.7%

Note: The calculations take into account five official weeks’ holidays, five special holidays and one week of staggered holidays for all.

Source: AErådet based on Statistsics Denmark, Working Time Accounts, December 2006

Flexible labour market

Overall, therefore, an increase in both employment and average working time levels has been observed. Against this background, AErådet does not believe that the Danish labour market will restrict economic growth in the short term. The survey concludes that not only is unemployment low, moreover labour market participation is growing, while the average working time is rising. According to AErådet, these factors reflect the emergence of a highly flexible labour market, particularly in 2006.

Carsten Jørgensen, FAOS

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