DENMARK'S EXPERIENCE WITH MIGRATION IN EUROPE

UNCLAS COPENHAGEN 000213

SIPDIS

E.O. 12958: N/A
TAGS: PINR ECON ELAB DA

SUBJECT: DENMARK'S EXPERIENCE WITH MIGRATION IN EUROPE
PROMPTED BY THE FINANCIAL CRISIS (C-RE9-00762)

REF: STATE 43864


1. The Confederation of Danish Industry (the functional
equivalent of the U.S. Chamber of Commerce) estimates that
30,000 migrant laborers work in Denmark. The overwhelming
majority of this group are Polish nationals engaged in
skilled and unskilled construction work. There is no
evidence to suggest that this number has fluctuated greatly
since the onset of the economic downturn, though the
construction industry has been among the hardest-hit
sectors.


2. Observers attribute Denmark's smooth labor relations
regarding migrant workers to a provisional five-year migrant
labor law enacted in 2004 by the Danish parliament that
required Danish firms to afford the same pay and treatment
to migrant workers as that granted to Danish workers. The
five-year duration of the law was fixed deliberately to
allow parliament an opportunity to evaluate the effect of EU
enlargement on Denmark's labor situation. Denmark's major
labor unions were closely consulted prior to the law's
passage, and many Polish construction workers have
reportedly joined Danish labor unions.


3. The provisional five-year migrant labor law expired on
May 1, 2009 and we understand that the parliament has no
plans to enact follow-on legislation. Some observers
suspect that employers may now seek to exert downward
pressure on migrant labor wages, particularly for non-
unionized unskilled workers. Denmark does not have minimum
wage levels, since wages are set through labor accords
between employers and labor unions. Local economists have
raised a worst-case scenario of a two-tiered labor market
consisting of well-paid unionized Danish and foreign workers
who in some cases may have to compete with a relatively
poorly-paid class of non-unionized migrant workers, a
scenario that could result in strikes and labor unrest.
Prospects for this scenario are probably highest in the
unskilled labor market: the Rockwool Foundation, a well-
respected local think-tank, reports that the presence of
migrant workers has already decreased wages for unskilled
Danish workers by 5.5 percent since 2004.


4. In past years, Denmark has experienced few incidents of
anti-migrant worker sentiment. There has been no effort
from the government to discourage or limit the influx of
migrant workers, and no steps to return them to their
countries of origin after the onset of the economic
downturn. The Rockwool Foundation recently published a
study that concluded that migrant labor on average has
contributed positively to the Danish economy and that
migrant workers add more to the economy than they subtract
from it. The Confederation of Danish Industry has reported
similar findings.

McCulley