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The Danish model and the pressure from internationalisation and differentiation
FAOS' research programme 2014-2018
The Danish model, centred on the collective bargaining system, is still standing strong in the mid-2010s. The rate of unionisation is high by international standards and has not decreased significantly in recent years. The scope of matters governed by labour market parties in collective agreements has never been greater. Not only basic employment conditions, such as wages and working hours, are regulated but also welfare issues, such as pensions, education, wages during sickness and maternity, senior systems etc. Furthermore, in recent years we have faced an economic crisis of historic proportions, yet so far, the social partners have managed to conclude agreements – a major conflict between public employers and teachers on working time being the only exception. It was different during the 1970s’ oil crisis, when three bargaining rounds in a row ended up in political intervention and a collective bargaining system crisis.
Despite this immediate power of the collective bargaining system, there is an increasing pressure on the system specifically, as well as on the Danish model in general. Two forms of pressure can be identified. The first is the pressure from internationalisation in the form of increased competition and changes in European regulation. The second is in the form of an increasingly complex labour market.
Internationalisation concerns the outsourcing of the production of goods and services, changes in European labour market regulation, and labour migration, where workers especially from the Eastern European EU member states pose a challenge for the Danish model. The effects of economic internationalisation on the Danish economy and employment became clear following the financial crisis. More than 200,000 private sector jobs disappeared. In the years since, it has been hard to kick-start growth in employment, in fact more difficult in Denmark than in many of our neighbouring countries. This has brought attention to competitiveness and productivity, and a tight financial framework is therefore what both the public and private sectors must expect for some years to come. This puts collective bargaining under pressure and increases the need to find creative solutions.
Furthermore, the Danish model is challenged by multiple forms of increased differentiation. One form of increased differentiation is traditional trade unions being challenged by ‘yellow’ unions. Competition concerning trade union members and unemployment fund members has risen. The increasing presence of foreign workers in both unskilled and skilled jobs, including high-skilled jobs, also creates greater differentiation in the Danish labour market. A third form of differentiation, one particular to the Danish labour market, is the difference, as well as the interaction, between the political system and the social partners. It is a balancing act that from time to time causes dispute and discussion about the demarcation between collective bargaining and legislation and about the level of involvement of the social partners, as well as their ability to deliver solutions in agreement with politicians. A fourth type of differentiation is about the function of HR in companies. New trends in management training do not emphasise the role of negotiation and cooperation with employees as much as earlier. Hence, managers in the private and public sectors (key persons in the Danish model of collective bargaining) may not become carriers of the standards on which the Danish model is built to the same extent as before.
Internationalisation and differentiation will be addressed in different ways in FAOS’s research programme 2014–2018.
Although Danish conditions are central to the analyses, a range of international comparative studies will also be conducted. Here, Danish conditions will be compared to those of other countries, mainly EU member states. This also applies to some of the following issues. All research areas will cover the private and public sectors, although the main focus is on the private sector. Finally, accompanying research in all research areas will be conducted in the form of brief analyses of current issues as well as more theoretically based empirical projects.