The Nordics should “stop refusing to discuss a minimum wage”

Stop worrying and join in the debate about a statutory minimum wage across the EU. The message from Bente Sorgenfrey, the new Danish President for the Council of Nordic Trade Unions (NFS), is clear:

“We have to face the music and join the debate about a statutory minimum wage. Everybody would then see the strengths of the Nordic collective agreement system and the value this represents for employees and for society as a whole,” she says. 

NFS represents nearly nine million employees in the Nordic countries, coming from a total of 16 trade union confederations, professional and academic unions — including the Danish Confederation of Professionals FTF, which represents 450,000 public and private employees. Bente Sorgenfrey has been the FTF President for many years, and since 1 January 2015 she has also been at the forefront of a collective Nordic trade union movement as the new NFS President.

Grassroots criticism

She believes it is her duty as NFS President to initiate a debate about how the Nordic countries should relate to the mounting pressure to introduce a statutory minimum wage, like many other EU countries have. But she admits she is facing resistance, also from her own grassroots both in Denmark and elsewhere in the Nordic region. 

“It’s a view which I get a lot of stick for from trade unions both at home and elsewhere in the Nordic region, but we simply have to have this debate. Of course I want the Nordic agreement model to stay and be used widely. But that also means we need to have an open debate about it and see whether we can prepare it better for the future.”

While Nordic trade unions believe a statutory minimum wage would be catastrophic, employees in many other EU countries see it as protection against social dumping and unacceptable labour market conditions. The Nordic trade union movement cannot ignore this, says Bente Sorgenfrey:

“We are under pressure from our European colleagues, many of whom want a European minimum wage as protection against very low wages. I believe it is my responsibility, and that of the other Nordic trade union leaders, to show them that we support this goal.”

Bente Sorgenfrey says much can be learnt from Norway where legislation secures a minimum wage level within certain trades, imposed by a state Tariff Board. This means a minimum wage is secured even for workers who are not covered by collective agreements, as long as they are working in the same trade as the agreement covers. 

FTF underlines that the social partners should be the ones negotiating the minimum wage included in a collective agreement, which then can be extended to cover an entire trade. This model can for instance be applied in the construction industry, where social dumping is well known. 

A recent survey shows many FTF members are positive to the Norwegian model and want to introduce it to the Danish labour market. Bente Sorgenfrey believes this shows many members are very worried about social dumping, and that some members believe universally applicable collective agreements can be used to fight it. 

Get a move on

Several leading Danish labour market researchers believe the social partners need to get a move on and join the debate about a statutory minimum wage. Marlene Wind, Director of the Centre for European Politics at the University of Copenhagen, is one. 

“I personally find it ridiculous that Danish trade unions are fighting against underpaid eastern European workers while they refuse point blank to consider that a minimum wage actually could be an efficient way to do something about the problem.” 

A majority of EU countries consider a minimum wage to be one answer to the many problems surrounding social dumping, and Marlene Wind believes a minimum wage in some shape or form will be introduced in Europe in the long run. The Danish professor thinks the Nordic countries should therefore seek to influence the process and in that way defend the Nordic agreement model.

“The better coordinated the Nordics are, the easier it is to get the message across that the Nordic model is valuable,” she says.

Marlene Wind does not believe there will be a joint Nordic effort until all the Nordic countries understand that a statutory minimum wage does not go against the spirit of the Nordic model.

“The belief that a statutory minimum wage is against the Nordic model is a myth. Norway and Iceland have realised this, but in Denmark it is pretty hard to get politicians and the social partners to see this.”

Unholy alliance

She sees several possibilities for a peaceful co-existence between a statutory minimum wage and the Nordic model:

“There is nothing about a statutory minimum wage which stops the social partners from playing a central part. It has been possible in Norway, where agreements have been made collectively applicable. Another solution is for the labour market to build on top of a statutory minimum wage.”

Still Danish employers and trade unions have entered into what Marlene Wind calls an unholy alliance against any form of a statutory minimum wage; they are opposed to it for very different reasons. Employers are against a statutory minimum wage, she thinks, because as long as there is no such thing they can continue to hire foreign labour at a very low cost.

For trade unions there is even more at stake, says Marlene Wind:

“Trade unions are afraid of loosing members and their entire raison d’être. Some members will ask themselves why they should be part of a trade union if the minimum wage is legally determined. So the unions will face a big task trying to explain to members that there are far more efficient ways of fighting social dumping than to run around construction sites hunting down those who pay too little.”

The Nordics must stand together

Many Danish politicians are also opposed to a statutory minimum wage and to the Norwegian model with collectively applicable agreements. One of them is Ulla Tørnæs from Venstre - The Liberal Party of Denmark. She is an MEP and Vice Chair on the EU Committee on Employment and Social Affairs.

“I support neither the Norwegian model nor a statutory minimum wage, and I want to fight any attempt from the EU Commission to force through a statutory minimum wage. We are better served with the Nordic agreement model where the social partners negotiate wages and working conditions with no political interference.” 

Ulla Tørnæs has previously predicted that a European minimum wage would be introduced. Now she no longer believes it. She thinks the EU Commission’s view has softened considerably. 

“There is still a desire within the EU Commission to introduce a minimum wage for all EU countries, but I don’t think a statutory minimum wage is just around the corner. If it should become a reality, however, the Nordic region must stand together and protect the Nordic region,” says Ulla Tørnæs.