FlemmingLeer´s english blog: Rotten Denmark pt. 2 - 100.000 forced labourers used to distort competition    
 Rotten Denmark pt. 2 - 100.000 forced labourers used to distort competition0 comments
21 Jan 2004 @ 02:10, by Flemming Leer Jakobsen

As part of the government employment policy, people on kontanthjaelp (social welfare) have to work for the money they get. Often they work on projects, where they assemble parts or do packaging for various companies. They get no extra pay other than their welfare. Of course this benefits the companies involved. Like Bodum coffee makers , Dandy (Stimorol) (Subsidiary of Cadbury Schweppes, Gumlink (various gum products private labels be sold in Aldi, Germany), Jema Plast, Hvidbjerg Vinduer and Aquafresh toothbrushes (Subsidiary of Smithkline Beecham) .

In some instances kommuner (local city councils) even defy the law in order to save money. In one instance in Skelskoer kommune was forced to pay back Dkr. 32.000 ,- (US$ 4600) to one individual and LADK (Organisation of unemployed Dk) had to insert an ad in the local newspaper to announce that people activated in the kommune the past year under the current law was liable for redemption. The city council refused to contact the people concerned via direct mail to inform them.

Brande Kommune rejected paying social welfare to former refugee

Brande kommune also refused to pay an refugee on social welfare money and implied that the individual could return to his home country instead. (The Danish government is a liberal government, but has a strict policy concerning refugees. More strict in many ways than the Australian. Denmark offer repatriats money including paying the shipment of their belongings.) Coincidently the council head is a member of the same ruling party as the current prime minister. The individual moved to another kommune with a more humane attitude towards people on social welfare.

Hungerstrike to get social welfare in Thyholm kommune


After that the local newspaper Dagbladet Holstebro*Struer started writing about the consistent underpayment and competitive practices that distorts competition. In one instance a forced labourer was run out of the kommune after critising the forced labour publicly. (A forced labourer on social welfare can get up to a staggering Dkr. 35,- per hour where an union paid labourer gets about Dkr. 105,- minimal.) The landlord was contacted by an anomyous influential person and persuaded to quit the rental. Also her husband was fired from a local company due to job shortage. The exact same company had just recently won a licitation for new buildings.

Total numbers of forced labourers could amount to 100.000 !

In a midsize town like Vejle with 53.000 inhabitants, there are some 400 activated in different projects (Latest official figures august 2000). Nationwide with 271 kommunes this number could be close to or above 100.000!

Another finesse to this is that people in forced labour activities are not part of the jobless rate, which officially is at some 180.000 (december 2003).

Add to this the number of people in the dagpenge system (Self insured unemployed) in various jobs as part of educational or jobrelated subsidised situation. In october 2003 this number was 34351. A number that also is not part of the jobless rate. Often companies use these people for shortterm work in order to keep their costs down. Also because of how the employment areas are operated companies can use people from different amter without risking being blacklisted for abusing workers. (Which is not allowed by law).


These activities cost the Danish society between 6 to 18 Billion Dkr each year. (Approx. 1 til 3 Billion US$). The exact figures are unknown, because social welfare is paid by the local city councils and the self insured are paid by the government.

This system is dysfunctional, but is kept in place part out of political as well as economical reasons. Local city councils would have to employ more people in health care for elderly as well other areas. But currently the liberal government has imposed a zero rate tax policy forcing the councils to saving costs by either firing or making areas more efficiently (more work per employed).

Former selfemployed forced to package exact same products as packaged by his firm

In one case a former selfemployed, who went out of business because of competition from unfair competition from city council forced labourers, was forced to work with packaging the exact same Bodum coffee makers that was the basis of his former firm. He has forwarded claims to 8 city councils of Dkr. 500.000 each (Approx. 100.000 US$) for loses sustained from unfair competition practices. He now awaits promised free legal help by the government to sue the city concils involved.


Outlook for the future

Allthough the social law in Denmark permits educational help for people on social welfare, only a small number of people are eligible for this. The law has a very technical definition which gives access to help with getting re educated. And the kommunes have to pay for this, so with the zero tax policy there is no actual intention from the city council to helping people out of social welfare and into a steady tax paying income.

Another side of the story is that people on social welfare are not able to get low rent bank loans. The banks simply do not deem them as a steady reliable source of profit. They then only have credit card companies to finance an education. Allthough they are eligible for government sponsored education grants, people with families and debt cannot afford to lose any income. So it is a catch 22.

Within the last year some 40.000 people have become unemployed in Denmark and only a minority among the 18-25 year old are self insured due to low dagpenge. People above 25 get a considerably higher self insured dagpenge. These are then forced into the social welfare forced labour programs. Also they get a considerably lower social welfare than people above 25.

The bad side of this is a study in December showed some 35.000 people living under the minimal living income set forth by the EU. This affects some 100.000 children with them not being able to participate in social activities in connection to the public schools.

Allthough some people on social welfare suffer from alcohol and other abuse, some of them that during last 5 years had ended up on social welfare find it extremely difficult to get in contact with the labour market due to prejudice towards them. This constitutes actually a Danish counterpart to the Indian Caste system. People on social welfare are actually the untouchables, both in peoples mind and work related issues.

Denmark surely is a wealthy country if they can afford to keep so many people away from the jobmarket. But what the country has in wealth, it lacks in mental surplus.

Something will change. It has to.

One way could be to grant access to education much broader and on a economical scheme that would involve both city council, banks and government. Maybe a government approved bank loan that could give people access to financial ressources to allow them to reach their personal goal. A goal that I think is lower than most of the people currently employed in the jobmarket. This could be as self employed or part of a educational program.

Just a hint....

Current Danish Kr. / US$ rate 1 $ for Dkr. 5.94

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