Danish Median Incomes Decrease as Wage Inequality Increases Significantly

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"Gimme a holler"

Looks like Denmark's gonna see a bump in wages for workers in 2023 and 2024, but a new study shows thatfor a big chunk of the Danish workforce, real cash has taken a hit from inflation. 💸💰

The Gig's Up

Denmark's collective bargaining system for wage negotiations between employers and unions locked in pay raises in the labor force in both 2023 and 2024, due to inflation.

But while the big kahunas in the Nordic nation saw their greenbacks grow, a sizable portion of the populace now has less purchasing power thanks to inflation, according to a new analysis from the thinktank Economic Council of the Labour Movement (ECLM).

The rich-poor divide is widening, says ECLM. And it's not just been happening this year. For the past ten years, it's been the same story. 🙁

The analysis, based on data from Statistics Denmark, reveals that the top 1% in Denmark saw their income skyrocket by 14.8% in 2023. That's more than enough to exceed the rate of inflation. Not so for people in the middle-income sector; their real income took a nose-dive. 🔼🔽

The median income, post tax, dropped by 0.6% in 2023, according to ECLM.

The Rich Just Keep Getting Richer

"Income inequality's creeped up pretty clearly in recent times," said ECLM senior analyst, Sune Caspersen. "While the top dogs have seen significant earnings boosts, your average Dane's real income's been tanking."

Even the 40% with the lowest incomes experienced a decline in real income by 0.3% after tax in 2023, too. Since the newest data is from '23, the raises agreed on for '24 don't factor into ECLM's calculations.

So What's Up With That?

Caspersen thinks the trend's a cause for concern for Danish workers. "The richest have left everyone behind like this," he said, "and it's all because the stock markets have been doing great, while regular Danes' deals have been getting crushed by inflation."

The study also shows that the incomes of the richest 1% have climbed by nearly 60% since 2013, which translates to roughly one million kroner after tax. During the same stretch, the median Danish income increased by only 9%, or about 23,000 kroner.

"The income gap between the richest Denmarks and the rest of the populace widening like this is a continuation of the trend from the last decade," Caspersen said.

The organization slammed government tax policies, such as hiking the top tax bracket for stock market returns and decreasing inheritance tax for family-owned businesses.

"The government's tax policies are whack if they want to tackle income inequality," Caspersen said. "Politicians have the tools to battle inequality with tax reform, but instead, they've chosen to slash taxes for stock market returns and inheritance for family-owned businesses, which usually helps wealthier Danes."

What Now?

#Money#Working in Denmark### Sound Off

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Despite the predicted wage increases for Danish workers in 2023 and 2024, a study by the Economic Council of the Labour Movement (ECLM) suggests that many workers have experienced a decrease in purchasing power due to inflation.
The publication, based on data from Statistics Denmark, indicates that the top 1% in Denmark saw a significant income boost of 14.8% in 2023, surpassing the inflation rate, whereas the middle-income sector's real income decreased.
Sune Caspersen, ECLM senior analyst, expressed concern over the growing income inequality, stating that while the top earners have seen substantial earnings growth, the average Dane's real income has been declining.
ECLM's analysis revealed that even the 40% with the lowest incomes experienced a decline in real income by 0.3% after tax in 2023, and the increases agreed upon for 2024 were not yet factored into the calculations.
Caspersen criticized the government's tax policies, asserting that tax reform could be a useful tool to combat income inequality, but politicians have instead chosen to lower taxes for stock market returns and inheritance for family-owned businesses, which generally benefits wealthier Danes.

Danish Median Incomes Decrease as Wage Inequality Increases Significantly