New employment policy for Denmark

Too many Danes are moving in and out of unemployment in parallel with market fluctuations, and one reason is failing employment policies says the Danish government. Now it has asked an expert committee to review the country’s entire employment policy. 

“We need a thorough review of our entire employment policy. It would seem something is just plain wrong when we have both jobs to fill and unemployed people,” Prime Minister Helle Thorning-Schmidt (Social Democrats) said as the review was announced.

Minister for Employment Mette Frederiksen (Social Democrats) agrees that today’s employment policy is not good enough.  

“It needs a fresh start, because for too long it has been running around in circles. This has led to controls and meaningless activation programmes rather than real skills improvement and permanent work,” says Mette Frederiksen.

Denmark’s employment policy costs nearly 6bn danish kroner (€804m) a year and for the past five years its execution has been in the hands of 94 municipal job centres. It is not the new expert committee’s mandate to come up with a new organisation model for the employment policy, but the committee chair, former Minister of Health and Taxation Carsten Koch (S), does not exclude that the committee might suggest moving the responsibility for executing policies away from municipalities. The former centre-right government gave municipalities this power in 2007.

Today each municipality has one job centre, and unemployed people must go to the one in their own municipality even though many Danes work outside of their own municipality. Job centres have for many years been heavily criticised for having badly educated staff and for spending too much time on administration and documentation and too little on trying to link unemployed people and businesses.

The criticism has increased in the past year, also from the Minister for Labour Mette Frederiksen who labelled the situation “a gigantic systematic failure” which “wastes unemployed people’s time”, and the Prime Minister has highlighted the fact that some businesses have completely stopped using job centres to find labour.

The more than 7,000 job centre employees welcome the review. They say the state’s deregulation of the centres obliges them to spend all their energy checking whether the unemployed really are available for the labour market. Municipalities also hope the review will sort out excessive macro management and red tape. The law regulating job centres alone is more than 22,000 pages long. 

In addition to commissioning the review, the government will also seek the views of a group made up of trade union representatives, who welcome the committee’s work as well. 

The review will result in two reports. The first will look at the existing measures for unemployed people who are ready to get back into work. The second will look at measures aimed at those who are not yet ready to enter the labour market, i.e. people on cash benefits, sickness pay, unemployment benefit or rehabilitation. The first report and the committee’s recommendations are expected this autumn, while the second report is scheduled for publication in the autumn of 2014, according to the Ministry of Employment.