5 ms·

Denmark does not have a minimum wage. And the unions are certainly not as strong today as they were in the 80es. What keeps the wages high are high unemployment

Denmark does not have a minimum wage. And the unions are certainly not as strong today as they were in the 80es. What keeps the wages high are high unemployment benifits or alternatives such the government grant for education, ease of hiring, and general very high cost levels.

geewee 5y ago
The minimum wage part is true (but the article never claims Denmark has) - I'm not 100% sold on your thesis - unions still definitely have real power, look at the nemlig.com scandal that's currently going on. It's probably definitely less than previously though.
fogihujy 5y ago
> unemployment benifits For those unaware, social benefits in Denmark can be as high as 2000€ per month, depending on the circumstances. It's simply not viable to pay employees less, as they'd have no reason to come to work.
- pedro2 5y ago
  You can keep unemployment benefits forever?
  - wodenokoto 5y ago
    Yes and no. There are different tiers. The lowest tier is kontanthjælp (cash assistance), and it is way less than what is referred to as unemployment benefits. The rules about these changes constantly as it is hot political topic, but I do believe you can keep kontanthjælp forever, given that you don’t hold too much cash/valuables and that you don’t actively say no to employment.
    - fogihujy 5y ago
      Pretty much. One has to stay unemployable which probably isn't as easy as one would think.
  - throwaway4good 5y ago
    In theory no. If you can get a job at MCD, you don't qualify for these benifits as they are an insurrance. But in practice, you can stay on benifits forever. The legislation governing this is extremely complex.
  - jopsen 5y ago
    Nope, unemployment insurance lasts for 2 years. And requires you to: (a) pay membership fees, and, (b) be actively looking for a job. They'll give you some flexibility, so you might not have to accept the first job. If you're not a member or two years are up options are: join and work to regain coverage, work for something around a year or so -- lots of special cases. Or get unemployment benefits from government. Much less ~1400 USD, requires lots of activities like hunting for jobs, and not have assets exceeding ~10k USD.
    - pistolpeteDK 5y ago
      minor correction; It’s 10k DKK (about 1500$) in cash equivalents… So you have to “eat your bricks first” (as the saying goes for those who own property).
      - jopsen 5y ago
        Oh, I thought it was higher.
BurningFrog 5y ago
What makes high wages possible is high worker productivity. Or in other words, an employer can't pay more in wages than they make in income.
- deleted 5y ago
  [deleted]
- boomlinde 5y ago
  The mere possibility of high wages is of little use. The employer will tend to optimize towards paying as little as possible for as much productive work as possible. With disincentives to work for very little, "as little as possible" grows. In the worst case for the employee it becomes unaffordable, but in many industries there's a lot of headroom. Other industries may have to make headroom by moving costs to e.g. consumers.
  - BurningFrog 5y ago
    Unless you have monopoly/strongly cartelized employers, wages will reflect worker productivity. > The employer will tend to optimize towards paying as little as possible Yes, of course.
    - pydry 5y ago
      >Unless you have monopoly/strongly cartelized employers, wages will reflect worker productivity. This was more or less the case until 1981 when Reagan bust the ATC union (followed by multiple private sector union busting attempts). Worker productivity only puts a ceiling on wages. The actual wage is determined by workers' leverage, of which productivity is just one component. This is how Denmark can have lower overall productivity and still have $22 / hr wages. McDs just isnt as profitable there.
      - Aunche 5y ago
        Any individual McDonald's restaurant is just as profitable in Denmark as in any other nation. There are just a lot few McDonald's in Denmark (89), which ensures high demand at each restaurant, so each one has sufficient cash flow to support Denmark's wages. Denmark's relatively high tech economy and highly educated workforce has historically meant that they do not need to worry about creating a lot of lower skill jobs, like those found in McDonald's. >The actual wage is determined by workers' leverage Yes, and the easiest way to increase worker's leverage is to restrict the supply of new workers. The most powerful unions are the ones that are able to do so to the greatest extent. SAG-AFTRA for example, restricts union eligibility to those who star in a "union position", but also forces productions to give most of the union positions to union members. Likewise, with Denmark, you're seeing increasing anti-immigrant sentiment.

geewee 5y ago

The minimum wage part is true (but the article never claims Denmark has) - I'm not 100% sold on your thesis - unions still definitely have real power, look at the nemlig.com scandal that's currently going on. It's probably definitely less than previously though.

fogihujy 5y ago

> unemployment benifits For those unaware, social benefits in Denmark can be as high as 2000€ per month, depending on the circumstances. It's simply not viable to pay employees less, as they'd have no reason to come to work.

pedro2 5y ago
You can keep unemployment benefits forever?
- wodenokoto 5y ago
  Yes and no. There are different tiers. The lowest tier is kontanthjælp (cash assistance), and it is way less than what is referred to as unemployment benefits. The rules about these changes constantly as it is hot political topic, but I do believe you can keep kontanthjælp forever, given that you don’t hold too much cash/valuables and that you don’t actively say no to employment.
  - fogihujy 5y ago
    Pretty much. One has to stay unemployable which probably isn't as easy as one would think.
- throwaway4good 5y ago
  In theory no. If you can get a job at MCD, you don't qualify for these benifits as they are an insurrance. But in practice, you can stay on benifits forever. The legislation governing this is extremely complex.
- jopsen 5y ago
  Nope, unemployment insurance lasts for 2 years. And requires you to: (a) pay membership fees, and, (b) be actively looking for a job. They'll give you some flexibility, so you might not have to accept the first job. If you're not a member or two years are up options are: join and work to regain coverage, work for something around a year or so -- lots of special cases. Or get unemployment benefits from government. Much less ~1400 USD, requires lots of activities like hunting for jobs, and not have assets exceeding ~10k USD.
  - pistolpeteDK 5y ago
    minor correction; It’s 10k DKK (about 1500$) in cash equivalents… So you have to “eat your bricks first” (as the saying goes for those who own property).
    - jopsen 5y ago
      Oh, I thought it was higher.

BurningFrog 5y ago

What makes high wages possible is high worker productivity. Or in other words, an employer can't pay more in wages than they make in income.

deleted 5y ago
[deleted]
boomlinde 5y ago
The mere possibility of high wages is of little use. The employer will tend to optimize towards paying as little as possible for as much productive work as possible. With disincentives to work for very little, "as little as possible" grows. In the worst case for the employee it becomes unaffordable, but in many industries there's a lot of headroom. Other industries may have to make headroom by moving costs to e.g. consumers.
- BurningFrog 5y ago
  Unless you have monopoly/strongly cartelized employers, wages will reflect worker productivity. > The employer will tend to optimize towards paying as little as possible Yes, of course.
  - pydry 5y ago
    >Unless you have monopoly/strongly cartelized employers, wages will reflect worker productivity. This was more or less the case until 1981 when Reagan bust the ATC union (followed by multiple private sector union busting attempts). Worker productivity only puts a ceiling on wages. The actual wage is determined by workers' leverage, of which productivity is just one component. This is how Denmark can have lower overall productivity and still have $22 / hr wages. McDs just isnt as profitable there.
    - Aunche 5y ago
      Any individual McDonald's restaurant is just as profitable in Denmark as in any other nation. There are just a lot few McDonald's in Denmark (89), which ensures high demand at each restaurant, so each one has sufficient cash flow to support Denmark's wages. Denmark's relatively high tech economy and highly educated workforce has historically meant that they do not need to worry about creating a lot of lower skill jobs, like those found in McDonald's. >The actual wage is determined by workers' leverage Yes, and the easiest way to increase worker's leverage is to restrict the supply of new workers. The most powerful unions are the ones that are able to do so to the greatest extent. SAG-AFTRA for example, restricts union eligibility to those who star in a "union position", but also forces productions to give most of the union positions to union members. Likewise, with Denmark, you're seeing increasing anti-immigrant sentiment.