A secure labour market - for a just green transition

The green transition will benefit the climate and holds possibilities for Denmark and workers in general: More exports, higher employment and better jobs.

The green transition will benefit the climate and holds possibilities for Denmark and workers in general: More exports, higher employment and better jobs.

As the same time, however, the transition increases the need for labour market security. Some risk becoming negatively affected as job functions disappear.

Others will need the courage to embark on new trainings and projects. Both of these groups must be supported through an effort to increase security. This will not only benefit the individual worker – it will also strengthen general support for the green transition towards 2030 and 2050.

Security for those who are negatively affected

Meeting the 2030 target for a 70% emissions reduction, and subsequently the 2050 target of climate neutrality, requires a transition of many activities in many sectors. As described in the chapter on circular economy, we need to find new ways of producing and consuming.

When we develop and disseminate climate-friendly materials, electric cars and heat pumps, this is ultimately to replace goods and technologies that are based on fossil fuels.

This can result in the loss of some job functions, and this carries the risk of affecting people negatively. The transition is not just about climate. It is also about those people and their living conditions, incomes, homes and families.

There must be security on the labour market. We should not protect job functions, but we must protect the people who occupy them.

danish trade union confederation

Security will promote development

Greater security will not just benefit those who risk being negatively affected by losing existing job functions. It can also boost the morale of those who consider a new type of training or business project in spite of an uncertain outlook.

They must enjoy security on the labour market so that they are more willing to take risks. Because in five or ten years, the skills and new projects they embark on now may be the ones that form the basis for the new solutions that are needed.

Security will promote support

Social justice is necessary in order to ensure long-term support for the green transition. There will be bumps along the way towards 2030 and 2050. The corona crisis has already taught us this.

When crises come along, it is important that the support for the green transition is robust. And it will only be robust if it is experienced as being socially just – as a lever, not as an added threat or something that needs to be paused.

Box 17: FH proposes

  1. In the future, unemployment benefits should be adjusted according to the development in wages so they dont’s lose value.

Focus on flexicurity and unemployment benefits

The transition’s consequences for employment, skills and financial security must be addressed by means of a combination of security, transformation of skills and flexibility. In other words: Flexicurity.

The single most important element in this connection is unemployment benefits. They must protect the workers who risk losing their jobs and the ones who are contemplating a road with uncertain employment prospects. Higher unemployment benefit compensation for loss of earnings would provide greater security.

The unemployment benefit system must be improved                   

The wage compensation rate reflects the economic difference between being employed and unemployed. As shown in figure 23, the gross compensation rate has dropped from 57% in the mid-1990s to 48% today. With expected reductions, the gross compensation rate will drop further to approximately 45%.

It is crucial for the individual worker and the support for the transition that the unemployment benefit system is rectified and that the past 30 years of hollowing out the unemployment benefits is brought to a stop.

Furthermore, there is a pressing challenge due to the corona crisis.Many workers have lost their jobs as a direct consequence of the corona crisis, while others have kept their incomes because their employers have made use of crisis packages.

Just as the crisis packages are now protecting companies and those in employment, there is also a need for a rescue package to protect the unemployed who have loyally paid their membership fees to their unemployment insurance fund.

It is unfair that the ones who are most severely affected by the crisis by having lost their jobs, do not receive a helping hand in the form of economic assistance.

danish trade union confederation

In FH’s economic recovery plan “Invest in climate, technology and security” we propose an emergency relief package for the unemployment benefit system.

This includes a temporary corona allowance to supplement the unemployment benefit rate and easier eligibility rules for freelancers and solo self-employed and that people who have yet not accrued entitlement to unemployment benefit will have access to the system through a lower rate.