Denmark Prepares to Fight EU’s Proposal for Minimum Wage

Denmark has lashed out against the European Union’s plan to establish a minimum wage, arguing it would undermine a national labor-market model that’s popular with both unions and employers.

Denmark “wants to clarify whether the Commission has the legal authority to put forward its proposal,” the Social Democrat government of Prime Minister Mette Frederiksen said in a statement on Wednesday. In a separate statement, Sweden’s government voiced similar concerns.

The European Commission’s proposal, which is intended to help the working poor and reduce inequality, has its merits, Danish Employment Minister Peter Hummelgaard Thomsen said. But he also said that elements of the plan might make it impossible for Denmark to maintain a model that has protected workers’ rights in the country for over a century.

A key concern is the extent to which the proposal allows political intervention, according to Lizette Risgaard, chairman of Denmark’s biggest trade union, FH.

“Even though the commission has tried to shape its proposal so that it respects the Danish model, it unfortunately hasn’t succeeded,” she said.

Denmark’s labor market sets wages based on negotiations between trade unions and employers’ groups. The model has existed since at least 1908, and has become a cornerstone of a society that boasts one of the world’s highest levels of income equality.

The EU plan still needs to be approved in the European Parliament and by member states in the European Council.

©2020 Bloomberg L.P.

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