Akademik

n.

Labor practices that give companies the flexibility to fire workers as needed and offer fired workers the security of government-backed benefits and retraining opportunities. —adj. [Blend of flexibility and security.]

It is Denmark's exceptional performance on jobs that has attracted most attention. Over the past three years the Danes have shaved the public payroll by almost 1% while boosting private-sector employment by 3.7%. Latest estimates suggest that 34,000 private-sector jobs will be created this year.

The government cannot take all the credit, but many economists fulsomely praise "flexicurity"—a peculiarly Danish blend of a flexible labour market, generous social security and an active labour-market policy with rights and obligations for the unemployed. Workers pay high taxes, but trade job security for a guarantee, should they be laid off, of time-limited but generous unemployment pay that they can live on and a promise that they will get new jobs fast. Hiring and firing can happen from one day to the next, which gives Danish companies a decided competitive edge over rivals in Sweden and Germany. About a fifth of Danish workers lose their job in any given year but most find a new job quickly.

—"Flexicurity; Denmark's labour market," The Economist, September 9, 2006

The Danes have also embraced labor flexibility, or what they call "flexicurity." This Third Way tradeoff gives employers the right to hire and fire easily, while the state guarantees a good wage and retraining for the fired. As the South China Morning Post noted: "The Nordic model apparently manages to combine generous welfare benefits with flexible labor markets, which results in low levels of unemployment." Earlier this year France floated its own flexicurity model but quickly withdrew it when French protesters took to the streets.

—Richard Karlgaard, "The Scandinavian Model," Forbes, July 24, 2006

Cooperation across the factory floor has cushioned workers from the decline of traditional job security. New government proposals introduced under the buzzword of "flexicurity" give even temporary workers the benefits of long-term employees.

—Paul Ames, "Dutch model offers flexible approach to job creation," Associated Press, November 14, 1997