1 00:00:00,280 --> 00:00:04,040 Speaker 1: Imagine a country where all the immigrants suddenly returned to 2 00:00:04,080 --> 00:00:07,600 Speaker 1: their native land. Train lines under construction might have to 3 00:00:07,640 --> 00:00:11,320 Speaker 1: come to a complete stop, Hotel rooms would go uncleaned, 4 00:00:11,800 --> 00:00:14,720 Speaker 1: and worst of all, there would be nobody to make 5 00:00:14,800 --> 00:00:18,000 Speaker 1: the bacon. No, it's not an episode of Black Mirror. 6 00:00:18,280 --> 00:00:22,680 Speaker 1: It's a conceivable scenario today in one European country and 7 00:00:22,760 --> 00:00:26,960 Speaker 1: potentially others. The big surprise, it doesn't even have much 8 00:00:27,000 --> 00:00:39,600 Speaker 1: to do with immigration policy. Welcome to Benchmark. I'm Scott 9 00:00:39,680 --> 00:00:43,360 Speaker 1: landman and economics editor with Bloomberg News in Washington, and 10 00:00:43,479 --> 00:00:47,760 Speaker 1: I'm Daniel Moss, economics writer and editor at Bloomberg View 11 00:00:48,200 --> 00:00:52,400 Speaker 1: in New York. So Dan, debates over immigration are royaling 12 00:00:52,520 --> 00:00:55,400 Speaker 1: much of the Western world. Here in the United States, 13 00:00:55,440 --> 00:00:58,920 Speaker 1: Donald Trump won the presidential election in part by promising 14 00:00:58,920 --> 00:01:02,120 Speaker 1: to build a border wall and clamped down on illegal immigration. 15 00:01:02,720 --> 00:01:06,200 Speaker 1: In Europe, similar kinds of sentiment helped fuel the Brexit movement, 16 00:01:06,520 --> 00:01:09,320 Speaker 1: and in other countries there's been an influx of refugees, 17 00:01:09,680 --> 00:01:12,320 Speaker 1: particularly from the Middle East, and that's fueling the rise 18 00:01:12,360 --> 00:01:16,800 Speaker 1: of populist anti immigration parties. You know, immigration is a 19 00:01:16,840 --> 00:01:21,360 Speaker 1: bit like trade. It's become a proxy for whatever people 20 00:01:21,600 --> 00:01:26,000 Speaker 1: feel ales society generally, it often has nothing to do 21 00:01:26,640 --> 00:01:31,000 Speaker 1: with the economic merits of the argument, something that we've 22 00:01:31,040 --> 00:01:34,640 Speaker 1: definitely seen lately. And so the country we're actually going 23 00:01:34,680 --> 00:01:38,200 Speaker 1: to talk about today is Denmark. Even with a tightening 24 00:01:38,200 --> 00:01:41,959 Speaker 1: of immigration policy, their foreign workers have kept coming in 25 00:01:42,280 --> 00:01:45,200 Speaker 1: and now account for almost one tenth of the country's 26 00:01:45,280 --> 00:01:48,480 Speaker 1: labor force, with Eastern Europeans making up a good chunk 27 00:01:48,520 --> 00:01:51,640 Speaker 1: of that. And yet their native countries such as Poland 28 00:01:51,680 --> 00:01:54,560 Speaker 1: and Hungary are getting richer. People there can make more 29 00:01:54,600 --> 00:01:57,640 Speaker 1: money and that is learning a lot of these migrants back. 30 00:01:58,120 --> 00:02:00,560 Speaker 1: Joining us today to talk about this situation Asian is 31 00:02:00,640 --> 00:02:05,400 Speaker 1: Karen Hagroup. She's the CEO of Danish Agriculture and Food Council, 32 00:02:05,640 --> 00:02:10,120 Speaker 1: and she was previously the country's Justice minister, among other positions. 33 00:02:10,160 --> 00:02:13,520 Speaker 1: She joins us by phone from Copenhagen. Karen, thanks for 34 00:02:13,560 --> 00:02:17,240 Speaker 1: speaking with us on Benchmark. You're welcome. So let me 35 00:02:17,280 --> 00:02:19,280 Speaker 1: get something out of the way. First of all, tell 36 00:02:19,320 --> 00:02:23,760 Speaker 1: us a little bit about Denmark's famous bacon. Denmark's famous bacon. 37 00:02:24,320 --> 00:02:27,040 Speaker 1: I think Denmark is a farming country. It's known to 38 00:02:27,080 --> 00:02:29,680 Speaker 1: be a farming country. We have been working in the 39 00:02:29,760 --> 00:02:34,440 Speaker 1: farming industry for many centrists, and we did something differently 40 00:02:34,520 --> 00:02:37,840 Speaker 1: than lots of other countries because instead of competing against 41 00:02:37,840 --> 00:02:41,880 Speaker 1: one another, we actually joined up and made corroboratives and 42 00:02:41,960 --> 00:02:45,280 Speaker 1: we learned to share knowledge and know how with one 43 00:02:45,280 --> 00:02:47,359 Speaker 1: another so that we could compete with the rest of 44 00:02:47,400 --> 00:02:50,400 Speaker 1: the countries in the world. So we have in Denmark 45 00:02:50,480 --> 00:02:55,080 Speaker 1: now for many minis centries have have a an export 46 00:02:55,560 --> 00:02:59,360 Speaker 1: not only with bacon, butter or famous brands that is 47 00:02:59,400 --> 00:03:02,520 Speaker 1: known well white and where we have very high food 48 00:03:02,600 --> 00:03:05,720 Speaker 1: security and food safety and traceabilities, so that we have 49 00:03:05,840 --> 00:03:10,160 Speaker 1: gained access to export markets around the world. But because 50 00:03:10,200 --> 00:03:12,760 Speaker 1: we have worked together in this area for so long time, 51 00:03:13,080 --> 00:03:15,840 Speaker 1: and because we are now also very highly acknowledged for 52 00:03:15,919 --> 00:03:19,280 Speaker 1: what we do. Approximately twenty five percent of the total 53 00:03:19,320 --> 00:03:22,200 Speaker 1: exports of goods from Denmark actually comes from the Danish 54 00:03:22,200 --> 00:03:25,600 Speaker 1: agriculture and food sector. And what role do foreign workers 55 00:03:25,680 --> 00:03:29,440 Speaker 1: play in this industry, They play a very significant role. 56 00:03:29,960 --> 00:03:32,959 Speaker 1: The number of unemployed in denmarkus generally at a very 57 00:03:33,040 --> 00:03:35,480 Speaker 1: low level, and in many parts of the country we 58 00:03:35,520 --> 00:03:38,240 Speaker 1: already would have what what you would actually call full 59 00:03:38,240 --> 00:03:41,200 Speaker 1: employment because we have so few people who are not 60 00:03:41,320 --> 00:03:44,720 Speaker 1: in the workforce to begin with, that you could characterize 61 00:03:44,760 --> 00:03:47,840 Speaker 1: it as full employment and in those parts of the countries, 62 00:03:48,320 --> 00:03:51,840 Speaker 1: and those parts are often far away from the large diseases. 63 00:03:52,360 --> 00:03:54,760 Speaker 1: That is where a lot of my companies are located. 64 00:03:54,840 --> 00:03:57,560 Speaker 1: So that's the places where it's even more difficult to 65 00:03:57,720 --> 00:04:01,280 Speaker 1: attract people to actually get to move there, to get 66 00:04:01,320 --> 00:04:03,600 Speaker 1: them to take a job there. And that is where 67 00:04:03,600 --> 00:04:06,720 Speaker 1: we have been very very fortunate with the foreign labor 68 00:04:06,880 --> 00:04:10,040 Speaker 1: that we have been able to attract to Denmark because 69 00:04:10,080 --> 00:04:13,080 Speaker 1: they have had the possibility of having a real high 70 00:04:13,080 --> 00:04:16,480 Speaker 1: waves and also very very good job. So since two 71 00:04:16,520 --> 00:04:18,600 Speaker 1: thousand and fourteen, we can see that the increase of 72 00:04:18,640 --> 00:04:21,440 Speaker 1: the total labor force in Denmark for a big part 73 00:04:21,440 --> 00:04:23,520 Speaker 1: of it actually has been because we have had a 74 00:04:23,600 --> 00:04:26,000 Speaker 1: large increase of foreign labor, and of course in the 75 00:04:26,160 --> 00:04:29,680 Speaker 1: food and agriculture sector we have had our share of 76 00:04:29,680 --> 00:04:33,680 Speaker 1: those people. What kind of labor shortages are there now 77 00:04:33,839 --> 00:04:37,080 Speaker 1: in the food and agriculture industries. It is in the 78 00:04:37,200 --> 00:04:39,680 Speaker 1: DAIRYUS sector that we see the issues, but it is 79 00:04:39,720 --> 00:04:43,000 Speaker 1: also in the agro industry. We have a large, large 80 00:04:43,040 --> 00:04:46,200 Speaker 1: acro industry where they actually make the machineries that are 81 00:04:46,279 --> 00:04:49,000 Speaker 1: needed in the in the processing companies and also in 82 00:04:49,040 --> 00:04:52,599 Speaker 1: the farms. So it is also people who have high 83 00:04:52,760 --> 00:04:57,680 Speaker 1: educations when it comes to using data to be just 84 00:04:58,080 --> 00:05:03,560 Speaker 1: in a normal educated um plants where they can make 85 00:05:03,640 --> 00:05:06,320 Speaker 1: things that are working together in a in a different 86 00:05:06,360 --> 00:05:08,359 Speaker 1: way that they used to. So it is people with 87 00:05:08,440 --> 00:05:12,799 Speaker 1: high education that we also need. Could the Danish agriculture 88 00:05:12,839 --> 00:05:18,760 Speaker 1: industry be what it is today without immigrant workers, No, 89 00:05:19,040 --> 00:05:21,640 Speaker 1: we couldn't if you look at it, and totally we 90 00:05:21,720 --> 00:05:25,080 Speaker 1: employ more than two hundred thousand foreigners. They come from 91 00:05:25,160 --> 00:05:27,279 Speaker 1: many different parts of the world, and they also have 92 00:05:27,520 --> 00:05:31,279 Speaker 1: very diverse backgrounds and education and skills. But if all 93 00:05:31,279 --> 00:05:35,240 Speaker 1: two hundred thousands of them tomorrow said we are going 94 00:05:35,279 --> 00:05:38,400 Speaker 1: back to where we came from, the Danish Agriculture and 95 00:05:38,400 --> 00:05:40,919 Speaker 1: Food Council could not produce what we do today, and 96 00:05:40,920 --> 00:05:43,599 Speaker 1: we could not deliver what we do in the total 97 00:05:43,680 --> 00:05:46,960 Speaker 1: export of goods from Denmark, which is approximately twenty five 98 00:05:47,440 --> 00:05:49,520 Speaker 1: of the total goods from Denmark that comes from the 99 00:05:49,560 --> 00:05:52,680 Speaker 1: Danish Agricols and food sator. So if the foreigners were 100 00:05:52,720 --> 00:05:55,040 Speaker 1: to leave, we would be in a very bad position. 101 00:05:56,960 --> 00:06:01,560 Speaker 1: Now we've reported that foreigners are leave thing not necessarily 102 00:06:01,640 --> 00:06:06,120 Speaker 1: because of more restrictive immigration policies, but because their home 103 00:06:06,120 --> 00:06:09,040 Speaker 1: countries are getting richer that wages are rising and that 104 00:06:09,440 --> 00:06:13,480 Speaker 1: the wages in Denmark might not be so attractive relatively 105 00:06:13,520 --> 00:06:17,400 Speaker 1: speaking as they were some years ago. Is this something 106 00:06:17,680 --> 00:06:20,880 Speaker 1: that Denmark is able to fix or that your industry 107 00:06:21,200 --> 00:06:24,080 Speaker 1: is able to deal with the people that comes from 108 00:06:24,120 --> 00:06:28,200 Speaker 1: other countries and work in our factories. They would get 109 00:06:28,200 --> 00:06:31,000 Speaker 1: the same pay as the Danish work force would do, 110 00:06:31,160 --> 00:06:33,720 Speaker 1: and it is the same as you may know, the 111 00:06:33,800 --> 00:06:36,520 Speaker 1: Danish model where we have a pay agreement, so it 112 00:06:36,640 --> 00:06:40,880 Speaker 1: is still relatively competitive. If you see what a Dane 113 00:06:40,880 --> 00:06:44,240 Speaker 1: would get foreigner working in Denmark would get compared to 114 00:06:44,400 --> 00:06:47,320 Speaker 1: what they would get in the UK, it is maybe 115 00:06:47,320 --> 00:06:49,279 Speaker 1: three times as much that they would get in Denmark. 116 00:06:49,720 --> 00:06:51,440 Speaker 1: But what we are seeing now is that the growth 117 00:06:51,520 --> 00:06:54,240 Speaker 1: rates in countries for instance like Poland, where we have 118 00:06:54,320 --> 00:06:57,520 Speaker 1: had lots of our workforce coming from the growth rates 119 00:06:57,560 --> 00:07:01,560 Speaker 1: in Poland last year in just the second quarter was 120 00:07:01,640 --> 00:07:05,839 Speaker 1: about seven points seven presents in the processing industry, so 121 00:07:06,120 --> 00:07:09,960 Speaker 1: relatively the vague wages are increasing and in countrys like 122 00:07:10,080 --> 00:07:12,480 Speaker 1: Poland and of course, if you would like to go 123 00:07:12,560 --> 00:07:14,920 Speaker 1: to Denmark to have a job and you have a 124 00:07:14,960 --> 00:07:17,800 Speaker 1: family back home, you would have to make some sacrifices 125 00:07:17,840 --> 00:07:21,200 Speaker 1: in your personal life. So it is relatively when does 126 00:07:21,280 --> 00:07:25,120 Speaker 1: the balanced tip When is it's no longer attractive to 127 00:07:25,280 --> 00:07:27,920 Speaker 1: maybe away from your family in daw or the week 128 00:07:28,000 --> 00:07:30,240 Speaker 1: and then only be home in the weekends. So, of 129 00:07:30,240 --> 00:07:32,680 Speaker 1: course this is an issue that we have to be 130 00:07:32,840 --> 00:07:36,000 Speaker 1: very much aware of that the growth rapes in for instance, 131 00:07:36,000 --> 00:07:40,120 Speaker 1: Poland are so high and other people in Denmark you 132 00:07:40,200 --> 00:07:43,720 Speaker 1: might be attuned to this because of your political background, 133 00:07:44,320 --> 00:07:46,880 Speaker 1: who look at this and say, hang on a second, 134 00:07:47,560 --> 00:07:53,440 Speaker 1: shouldn't these jobs in an iconic Danish industry be for Danes. Well, 135 00:07:53,480 --> 00:07:55,920 Speaker 1: you know, the situation is that we don't have enough 136 00:07:56,040 --> 00:07:59,000 Speaker 1: labor force to take the jobs. If everyone were to 137 00:07:59,320 --> 00:08:02,280 Speaker 1: go where they came from, we would just be a 138 00:08:02,320 --> 00:08:05,240 Speaker 1: country with companies and with the farming industry that could 139 00:08:05,240 --> 00:08:08,160 Speaker 1: not deliver. Because we deliver most of our goods to 140 00:08:08,200 --> 00:08:11,679 Speaker 1: the export markets. Of course, our companies are very merriable 141 00:08:11,680 --> 00:08:14,680 Speaker 1: reliance on if they can get the workforces they need, 142 00:08:14,720 --> 00:08:16,920 Speaker 1: because then they could actually sell more. And if they 143 00:08:16,920 --> 00:08:20,120 Speaker 1: can't sell more, then they're not competitive and when they 144 00:08:20,320 --> 00:08:24,760 Speaker 1: match themselves up against other companies from other countries. So 145 00:08:24,880 --> 00:08:27,200 Speaker 1: if we can't get the layed workforce with the label 146 00:08:27,240 --> 00:08:30,400 Speaker 1: that we actually need, the companies will be less productive 147 00:08:30,480 --> 00:08:33,600 Speaker 1: and they would be less attractive. So no, we do 148 00:08:33,720 --> 00:08:37,240 Speaker 1: not have two hundred thousand people in Denmark without a job. 149 00:08:38,200 --> 00:08:40,840 Speaker 1: We only have I think it's about four points two 150 00:08:40,880 --> 00:08:44,199 Speaker 1: percent of people without a job in the current situation. 151 00:08:44,880 --> 00:08:47,880 Speaker 1: And because lots of my companies are located in the 152 00:08:48,320 --> 00:08:52,080 Speaker 1: in the countryside, these people that actually do not have 153 00:08:52,120 --> 00:08:55,000 Speaker 1: a job in Denmark, they might live in the largest 154 00:08:55,040 --> 00:08:58,679 Speaker 1: cities very very far away from my companies. So if 155 00:08:58,679 --> 00:09:02,240 Speaker 1: I can't get the foreigners to come still being able 156 00:09:02,320 --> 00:09:05,120 Speaker 1: to give them a relatively high income and pay for 157 00:09:05,160 --> 00:09:07,840 Speaker 1: what they do, I would have a serious problem because 158 00:09:07,880 --> 00:09:10,360 Speaker 1: there are not enough things without a job in Denmark 159 00:09:10,440 --> 00:09:14,280 Speaker 1: to take over. And one last question current, this isn't 160 00:09:14,320 --> 00:09:17,880 Speaker 1: just limited to the agriculture and food industries. I assume 161 00:09:17,960 --> 00:09:21,280 Speaker 1: that with your background and your connections in politics and 162 00:09:21,640 --> 00:09:25,080 Speaker 1: across other industries and other trade groups, that this is 163 00:09:25,160 --> 00:09:29,200 Speaker 1: something that other people and other business leaders are probably 164 00:09:29,240 --> 00:09:33,400 Speaker 1: talking about two right in the processing industry, in the 165 00:09:33,440 --> 00:09:37,720 Speaker 1: construction industry, at the hotels and in special areas. This 166 00:09:37,840 --> 00:09:40,520 Speaker 1: is an issue of very very high importance, and it 167 00:09:40,600 --> 00:09:42,440 Speaker 1: is an issue that is not going to go away 168 00:09:42,480 --> 00:09:45,319 Speaker 1: because if we do not get be able to have 169 00:09:45,400 --> 00:09:47,880 Speaker 1: the workforce that we actually need, then Denmark is going 170 00:09:47,920 --> 00:09:51,200 Speaker 1: to be a more poor country. And if you see 171 00:09:51,880 --> 00:09:54,920 Speaker 1: the way that the wages are created in denmarketing is 172 00:09:55,040 --> 00:09:57,800 Speaker 1: it is very different from other countries. So if you 173 00:09:57,840 --> 00:10:01,079 Speaker 1: actually look at it, you can't say that these foreigners 174 00:10:01,160 --> 00:10:03,920 Speaker 1: have come and they have taken jobs that Dange should 175 00:10:03,920 --> 00:10:07,720 Speaker 1: otherwise have had. You cannot say that because foreigners have 176 00:10:07,800 --> 00:10:11,480 Speaker 1: come than the development in the wages have been less 177 00:10:11,600 --> 00:10:15,320 Speaker 1: or that the pay is bad. Um. Actually everyone is 178 00:10:15,320 --> 00:10:18,280 Speaker 1: getting a higher income because the companies get more productive. 179 00:10:18,360 --> 00:10:22,280 Speaker 1: The country's B and P is rising. So if the 180 00:10:22,280 --> 00:10:25,679 Speaker 1: possibilities of getting the workforce that you need from other 181 00:10:25,720 --> 00:10:28,600 Speaker 1: countries would disappear, then the country would all in total 182 00:10:28,760 --> 00:10:31,840 Speaker 1: be more poor, and the wages would also drop for 183 00:10:31,840 --> 00:10:34,720 Speaker 1: the Danish employees because the companies that they actually work 184 00:10:35,200 --> 00:10:39,000 Speaker 1: at would be less productive. Karen hagger Up, CEO of 185 00:10:39,160 --> 00:10:41,840 Speaker 1: Danish Agriculture and Food Council, thank you so much for 186 00:10:42,000 --> 00:10:49,000 Speaker 1: joining us today. Well, thank you, yeah bye. Benchmark will 187 00:10:49,040 --> 00:10:51,160 Speaker 1: be back next week. Until then, you can find us 188 00:10:51,200 --> 00:10:54,080 Speaker 1: on the Bloomberg terminal, Bloomberg dot com or Bloomberg app, 189 00:10:54,160 --> 00:10:58,160 Speaker 1: as well as wherever you listen to podcasts including Apple Podcast, Overcast, 190 00:10:58,240 --> 00:11:00,640 Speaker 1: and Stitcher. Please take the time to rate and review 191 00:11:00,679 --> 00:11:02,920 Speaker 1: the show while you're there, and you can also find 192 00:11:03,000 --> 00:11:05,720 Speaker 1: us on Twitter. You can follow me at at scott 193 00:11:05,800 --> 00:11:11,400 Speaker 1: Landman Dan, you're at Moss Underscore Echo. Karen is at 194 00:11:11,440 --> 00:11:14,040 Speaker 1: at k A R E n h a e K. 195 00:11:14,559 --> 00:11:17,160 Speaker 1: Benchmark is produced by Tofur for Has. The head of 196 00:11:17,200 --> 00:11:20,760 Speaker 1: Bloomberg Podcast is Francesca Leviy. Thanks for listening. To see 197 00:11:20,800 --> 00:11:21,319 Speaker 1: you next time.