As a Moroccan (studying in France), I decided to discuss some of the most important contrasts that exist between the Danish and Moroccan labor markets ; between a developed country and a developing coutry. Moroccan market policies are based on the French model (inheritance of the French protectorate over Morocco, 1912-1956). So as the Danish model is concerned, it combines labor market reforms, flexibility, security, skilled workforce and a tripartite cooperation that made it the “miracle model”.
In opposition to the Moroccan labor market, the Danish market almost never employs the term “precariousness”. After a brief review of some stylized facts concerning the labor market in both countries, the second section will focus on unemployment. At the end, a synthesis will highlight the differences and challenges for both countries that emerge from the analysis, especially for Morocco.
Labour market policies
The Danish model of labor market is called “flexicurity” model as it combines flexibility in hiring and firing for employers to a generous social safety and extended to employers. The employer is free to adapt its need for labor market requirements through a procedure for simplified dismissal and the employee is guaranteed a minimum income during unemployment. It also includes education rights and job search duties and finally a compensation rate of unemployment.
The Moroccan labor market is represented by a dual structure composed of two markets: formal and informal, with two different operating modes.
- Employment Policies
Since the employment policy in 2002 that launched plans of action, “more active,” to promote the reintegration of unemployed people and facilitate access to employment for many people as possible, the rate of employment increased . Note that this increase is also due to the fact that the public sector assumes a part of child care and care for the sick and the elderly (in other countries, these tasks are the responsibility of families). 77.8% of people aged 16 to 66 years are employed on the regular labor market (employed or independant workers).
The Danish rate of participation in the labor market is very high compared to most other EU countries ; the participation rate of married women is one of the highest in the international level.
In Morocco, salaried employees are the main type of employment: mostly in the private urban sector, but also in the public sector (central government, local authorities, public companies). The remaining workers are unpaid family workers, apprentices, employers and homeworkers. The public sector represents over 20% of the GDP of Morocco: the public sector is characterized by monetary compensation 8% higher than the private sector. If we include non-cash compensation (job security, pension funds, generous, lower return to work), the divergence between public and private sectors is more important : it is to say that an government official will receive a salary of 1 ,5 - 2 times higher than a private sector worker. Employment in Morocco is hardly consistent with the standards of decent work: one worker out of three is graduated, nearly 2 out of three employees working without contracts, unpaid employment represents 23% of national employment and 42% in rural areas, less than 20% of the employed population has medical coverage.
- Involvement of Social Partners
The social partners play an essential role in the labor market in Denmark. We observed an increase in unionization since the 1970s (from 60% to 80% in the late 1990s). There is an increasing union influence because of voluntarism of the Danish system combined with an informal social dialogue and a social contract between representatives of labor, capital and state. The objective of the social partners is to ensure business competitiveness and maintain employment opportunities for employees. At the central level general issues are negotiated concerning pensions and duration of working time, etc., and the fixing of minimum wages in different areas. Individual salaries are then dealt in a decentralized manner.
In Morocco, there are three unions at the national level: their bargaining power is derived from the close relationship with political parties (the legacy of their involvement in the struggle for national independence). They are very active and play an active role in implementing the various collective agreements in specific sectors (banking, transport) but also in the formulation of work rules in the administration and public companies while contributing to compliance with the implementation of regulations on minimum wages and terms of dismissal.
After declining steadily, especially in 2004-2005, the unemployment rate in Denmark has risen from 6% of the workforce in 2009 to 7.2% in 2010, affecting the female population. However, despite its fluctuations, the unemployment rate remains enviable by Denmark’s European neighbors.
According to international standards, the unemployment rate in Morocco has declined during this decade: from 13.4% to 9.1% nationwide. It remains high among first-time jobseekers, who represent about 50% of the volume of unemployment.
When a Dane looses his job and is a member of an unemployment insurance fund, he can benefit from this voluntary plan organized and run by unions recognized by the State. Members of unemployment funds range from ages 15 to 65: they must be a member of an unemployment fund for at least a year and have worked before becoming unemployed to gain access to these funds (except for those who have completed vocational training lasting one and a half year at least). Collective agreements cover about 80% of private sector employees. In the public sector, coverage is estimated at 100%. These agreements are renegotiated every 2-3 years on average (never more than 4 years).
In Morocco, the employee who loses his job keeps all his rights including social allowances and health insurance, and also the benefits of the ANAPEC (National Agency for Promotion of Employment and Skills) for his reintegration into the labor market.
But there is no unemployment compensation: the Commission of Social Protection of the private Sector calls for the establishment as soon as possible of a Fund for Compensation for loss of employment. The government seems to have abandoned, for now, the possibility of such an initiative.
Although the crisis has left marks on the labor market, youth unemployment in Denmark remains lower than elsewhere. It seems that the Danish model is primarily characterized by the constant strengthening of employability. Unlike in Morocco where this process begins early in student life, despite relatively generous students benefits . Students do not remain inactive and don’t depend on their parents (as many Moroccans).
Plus, the Danish vocational training system is based on constant interaction between companies and social partners, and the state offers subsidies for companies to recruit and train apprentices. Morocco would have much to gain if it put up this type of system, especially when we know that the Danish State has launched various forms of activation of the unemployed who can not find employment on their own. For example, for those under 25 years old who are unable to find employment for a period of six months, training must be initiated or they have to accept the reduction of half of their daily allowance of unemployment.
Furthermore, The Moroccan government is now in a difficult position in a context of the “Arab spring” that has been spread in all arab countries. The protests in Morocco have lobbied the government to accelerate social reforms. In this sense, this may suggest that in future, the government will finally put in place a system of unemployment benefits for those who suddenly lose their jobs.
Also, unlike the Danish employees who report high levels of satisfaction in terms of job security, Moroccan employees live their jobs as a form of disguised unemployment or a solution waiting in hope of more stable jobs, better paid or fulfilling their professional presentation. The concept of “decent work” is just beginning to emerge within the Moroccan government: Moroccan employees are either seeking better pay or see their jobs as inadequate in terms of educational attainment, or consider their employment unstable. An element not found in the Danish labor market where workers have rights to work and where there is a high mobility of employees and a significant discontinuity career paths, without causing stigmatization of employees concerned. Morocco is undergoing a division between the formal and informal which causes limited mobility of labor, because despite the existence of excess labor supply, wages in the formal sector do not adjust and the informal sector doesn’t absorb all job seekers.
Fiscal restraint and debt levels of Morocco do not, unfortunately, move towards the Scandinavian model in which it is for young to “find itself” (as opposed to “place itself” in Morocco) . Not only the focus is on personal relationships as on diplomas or professional experience (personal relationships play a crucial role in obtaining a job: only 9% of job seekers use strategies such as formal written requests, etc..), but the young graduate is often forced to perform the obstacle course to get a stable job. The risk is that young Moroccans continue to see their aspirations for independence not met.
Finally, given the structural challenges to come as the division of labor at the international level, the impact of new technologies on the labor market, demographic changes, etc., Morocco, as Denmark, should develop a model based on the use of skills development in order to enhance mobility in the labor market. This model slowly appears in Denmark but not in Morocco. The Moroccan government must make efforts on developing the education system in order to make it more flexible by, for example, developing equivalencies and bridges between the different formations and through a strengthening of elitist trainings.
The Danish model is characterized by a flexible labor market with high mobility of employees, low job protection reinforced by constrained collective agreements, a system of unemployment benefits, an active policy of employment, an significant effort in favor of ambitious programs of education, training and retraining of adults.
The Moroccan model is moving towards an evolution of employment rates closely linked to changes in economic life. But there are still many fundamental challenges in the labor market, such as reducing unemployment and increasing the women participation rate.
Morocco should use the example of the Danish model in strengthening the activation of the unemployed in order to fight against unemployment, while combating illegal practices such as illegal workers in the informal sector and the practice of obtaining employment through personal relationships. Also, it must, within a context of population growth and thus the work force growth, create a significant number of “decent” jobs to avoid the persistence of high urban unemployment rates in the future as does Denmark (grants companies to train apprentices etc.).
All these market labor differences are important challenges for Morocco in an international context of capital mobility and technological diffusion, but Morocco has many other social, political, economic, and cultural challenges for improving levels of eduction, for economic growth and productivity growth of human capital.
- J. Peder Pedersen: “Economic Life and Labour Market”
- Jens Lind: “Labour and Employment Regulation in Europe”
- Patrick Chops: “Denmark: still the century of trade unionism” (Economy of Labour and Employment in DMECs).
- French Ministry of Foreign and European Affairs website
- Christelle Meilland: “Denmark: Flexibility without insecurity?”
- Press conference of Ahmed Alami Lahlimi, High Planning Commissioner: “The employment situation and unemployment in Morocco and its structural determinants and policies in a context of transition” (11/05/2011)
- P. Agenor and K.R. ElAynaoui, “Labor Market Policies and Unemployment in Morocco: A Quantitative Analysis”, World Bank - No. 3091.
- L’Economiste, moroccan newspaper