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16 April 2018

Denmark: successful labour market integration policy attacked by populists

A labour market integration scheme, created after the social partners and the government came to a tripartite agreement, is seriously under threat. The scheme that helps refugees to find paid work combines vocational training and internship and leads to substantial savings for municipalities. The populist party wants to get rid of the program in exchange for its support to tax cut proposals.

The social partners and the government agreed in 2016 to create a work-based training programme for refugees (integrationsgrunduddannelse or IGU). At the beginning, the take-up has been slow. However, after an initial period, a rising inflow of refugees in integrative training programmes in companies was realised. Almost 500 more refugees found an IGU-job during the first six months of 2017. The social partners expressed their satisfaction after one year of functioning. They are convinced that, within another year, many more refugees will be enrolled in the integrative vocational training programme.

The 3-years integrative vocational training programme allows refugees to enter the labour market by means of traineeships in companies. IGU combines a traineeship and vocational training with language skills’ upgrading and should guide refugees into active employment. The basic integration training module is a mixture of classroom training and participation at the workplace. The agreement provides more possibilities for companies to employ refugees without qualifications and with a level of low productivity, which are not subject to the minimum wage agreed by collective bargaining. Besides, a cash bonus scheme is introduced for private companies that employ refugees in ordinary non-subsidized employment.

Recent assesments made clear that the IGU scheme offers considerable economic benefit for the country’s 92 municipalities. Cities earn substantial savings if refugees receive income through IGU rather than the state income payment for refugees. Although different employment schemes have different degrees of success, the IGU model is strong since private businesses are generally responsible for paying participants' wages.

Conservative parties, like the anti-immigration Danish People's party, have strongly criticised the scheme. The People’s party announced that they want the IGU-scheme to be cut from immigration provisions in exchange for its support of the government’s tax cut proposals.

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