Transcript TCC
The Danish Flexicurity Model
The Danish Wonder Drug against Economic
Troubles -- a win-win situation?
Jette Steen Knudsen
The Copenhagen Centre for Corporate Responsibility
The Copenhagen Centre for
Corporate Responsibility
Independent think tank founded by the Danish
government with a focus on the changing role of
business in society and corporate responsibility (CR)
initiatives. Independent board of directors
Secretariat for the Danish National Network of
Business Leaders which advises the Minister of
Employment
Target group: key decision-makers in business and
government
The Copenhagen Centre
Mission
Generate knowledge, stimulate public debate and raise awareness
about the changing social role of business in society
How we work
Applied research: the Centre undertakes research and practical
studies
Outreach activities: the Centre regularly convenes seminars and
workshops, and continuously engages decision-makers and the media
in dialogue and debate
Practical tools: develop practical advice for firms and government
Focus Areas
1) Employment trends: the Danish understanding of CR
• Globalization and outsourcing: impact on vulnerable groups
• National Network of Business Leaders: new forms of social
employment due to 1) globalization; 2) juvenile crime
2) Risk management
• SMEs and ethical supplier standards
• Non-financial reporting
• Corporate image and CR initiatives
• Institutional investors and social initiatives
Implicit assumptions of the CR Agenda which
focuses on inclusive employment
• Economic burden-sharing perceived as necessary
for maintaining social welfare
• Business included in problem-solving in order to
solve problems from the ”bottom up” rather than ”top
down” (business needs are a great motivating
factor..)
New labour market initiatives during the
1990s
• The Danish National Network of Business Leaders
(1996) + Regional Networks / “Inspirators” (2000)
• Tools employed: Different kinds of subsidized
employment programmes (i.e. ”sheltered” jobs)
• The Network Award for Social Inclusion - initiatives
that ”make a difference in every day life to
employees, the company and to society”
Types of CR Initiatives
1) Integration of employees excluded from the labor
market
(training, sheltered jobs, testing the ”capacity to
work”)
2) Pre-emptive measures
(with the goals to reducing absence due to illness,
improving physical and psychological working
environment, sheltered jobs for employees etc.)
Study of CR initiatives:
Netværksprisen set i Bakspejlet
• Integration of groups at the edge of the labour market:
qualitative study from The Copenhagen Centre
•
•
•
•
What works?
Possibility of getting a real job in the end
Company must have a real need for workers (business case)
Optimal framework conditions such as supplementary salary
scheme, training and education)
• Mentors
Examples:
• Danish Crown
• Specialisterne
• TDC
Read more at www.copenhagencentre.org
http://www.copenhagencentre.org/graphics/CopenhagenCentre/Publica
tions/Papers/pilotundersoegelse_full_report.pdf
Crucial features of the Danish
welfare model
• Universal service provision
• Financed through general taxation
• Requires high taxes and high
employment levels
Successful model
• High employment levels, low
unemployment
• High average income level
• Little poverty
• Government budget in surplus
Den danske flexicurity model:
the golden triangle
Flexible
labor market
ALMP: Improved labor
market qualifications
Aktive labor
market
policies
Generous
welfare
support
ALMP: motivating
factor
Kilde: Thomas Bredgaard, Flemming Larsen og Per Kongshøj Madsen,
2005
(ALMP)
Background for flexicurity model
• Flexibility: Consensus that employer
has the right to hire and fire
• ALMP: Labor market reform from 1993 active labor market policies (training
and education schemes have been part
of social partner agreements since mid
1990s)
• Social security
Flexibility
1) high internal numerical flexibility (regulate
working time, overtime, etc.)
2) high external numerical flexibility (regulate
the number of hires and fired)
3) high functional flexibility (organization/work
functions)
4) salary flexibility
Active labor market policy
• Improvement of qualifications
• Separation of social security and active labor
market policy so that ALM-period does not
count towards right to unemployment
• Individual action plans
• Training after 12 months unemployment
• Young people after 6 months - reduced
earnings during training.
Security
• Collective agreements b/w social
partners
• Combination of work/personal life (i.e.
maternity leave, education leave, etc)
• Public welfare - universal provision
Social Security – Income Compensation
Two challenges
Ageing: desirable but problem for public
finances
Globalization: desirable but need
adjustment pressures
Options for adjusting to spending pressures
related to ageing
•
•
•
•
Higher taxes
Cut spending
Pre-save
Delay retirement (and finish education
faster)
Share of cohorts with a further education
(source Jørgen Elmeskov, OECD)
Pct.
60
Pct.
60
0
0
Kilde: Education at a Glance 2004
25-34
D
N
EU
D
D
EC
O
U
FR
SW
FI
C
45-54
EU
10
LD
10
15
20
K
20
K
30
A
30
E
40
N
40
JP
N
KO
R
U
SA
50
AN
50
Globalization
• Demand for low-skilled workers might
drop but effect is not clear
• Some tax bases become more mobile
• More emigration of high-skilled
workers?
• Pressure to improve integration of
immigrants (Denmark is relatively more
attractive to low-skilled immigrants)