• Corpus ID: 155425997

Low-Wage Work in Denmark

@inproceedings{WestergaardNielsen2008LowWageWI,
  title={Low-Wage Work in Denmark},
  author={Niels Westergaard-Nielsen},
  year={2008}
}

• N. Westergaard-Nielsen
• Published 2008
• Economics

This book attempts to describe the functioning of the Danish labor market mainly from the perspective of a low-wage earner. In describing conditions for low-wage workers in Denmark, the contributors to this volume focus especially on labor market institutions. There are many differences between being a low-wage worker in Denmark and a low-wage worker in the United States. The low-wage level in Denmark is measured in this book at and below two-thirds of the median earnings, which by coincidence is just at the level of the median hourly earnings in the United States. If we adjust for lower purchasing power in Denmark, the Danish low-wage threshold is of course reduced. The main reason for this equality is that the wage distribution in Denmark is much more compressed than in the United States, which means that the difference between being in the lowest earnings decile and being in the highest is much smaller in Denmark. There are other important differences between Denmark and the United States: all Danish low-wage earners are covered by health insurance, and the effective marginal tax even for low-wage income earners is about 44 percent. In the United States, low-wage earners do not pay federal tax, and they often receive an income subsidy when they have a family to support, the Earned Income Tax Credit (EITC). In Denmark, there is a small tax deduction that works in the same way; in addition, most public services are free of charge because they are paid out of the public budget and financed by high taxes. Most importantly, education and health care are almost always free in Denmark. Although the wages of low-wage Danish workers are high compared to the median wage in the United States, the average American still earns more than the average Dane because he or she works longer hours—on average about one-fifth more. Danes work a little less than the average European, and in Europe only Germans work