How to make switching jobs not terrifying

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Speaker 1 This is the indicator from Planet Money. I'm Stephen Masaha.
And I'm Darren Woods.

Speaker 1 So, Stephen, there are reports showing that people are pretty worried about their jobs right now. Yeah, it's this sort of labor market freeze that we're in.

Speaker 1 Like, very few companies are hiring right now. Workers, they're clinging to their existing jobs.
I believe job hugging is the word I've heard. Okay.

Speaker 1 Yeah, even if they don't like the job, they're holding on tight. Yeah, the quits rate is really low, and that is not a great sign usually.
Now, there are a lot of reasons behind this freeze.

Speaker 1 You've got interest rates starting to bite, uncertainty about government policy, probably even artificial intelligence automating junior tasks.

Speaker 1 But whatever the cause, there is a set of policies that we in the U.S. could learn from.
Policies that could unfreeze the labor market. It's called flex security.

Speaker 2 Flex security, exactly.

Speaker 1 When the Economics Nobel was announced this year, this term kept coming up as a way to manage a fast-changing economy.

Speaker 2 The Danes, I think, have been very smart. They invented the flex security model.

Speaker 1 This is economist Philippe Aguillon, one of those Nobel laureates. And he explains that flex security means there's flexibility in the labor market.
You can hire and fire easily.

Speaker 1 But there's also security, generous unemployment benefits, training, and help finding a new job.

Speaker 1 And with all the talk about socialism following Zaran Mamdani's mayoral win in New York, it's worth pointing out this type of policy is a key part of democratic socialism.

Speaker 1 So today on the show, Flex Security, we'll meet a woman who left her job in Denmark and how this completely changed her life. And we'll ask whether the Danish model could work in the US.

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Speaker 1 Growing up on the Faroe Islands off mainland Denmark, Rakul Skariner loved hanging out with her school friends.

Speaker 1 School work, less so. By age 15, she was ready to leave.

Speaker 6 I just wanted to go out and have fun with friends and drink some beers and, you know, like living the good life as a teenager.

Speaker 1 So Rakul got a job on a fishing boat. After several years, she moved to the Denmark mainland and got a job in childcare, which worked for a while until she had her own daughter.

Speaker 6 Then I was like, I came home to take care of a child, go to work and take care of another child who also needs my help and care. So

Speaker 6 I thought that it

Speaker 6 became too much for me.

Speaker 1 So she quit, which sounds like a big decision because the family would basically survive on government support. How worried about receiving health care were you?

Speaker 6 No, I did not, no, I don't think that because here in Denmark, we are paying that much in tax that how much you earn and then we are paying that way.

Speaker 1 So you have paid so much tax that you thought the government will pay for this?

Speaker 6 I think so.

Speaker 1 Of course healthcare is publicly funded in Denmark and she got money too. Between all her various allowances from the government she says she got the equivalent of about $1,500 a month.

Speaker 1 Ruckle did have obligations though. She had to show that she was applying to jobs and regularly meet with a jobs counsellor.

Speaker 1 And this was administered through through her old union tied to her childcare job. At least two out of every three workers are part of a trade union in Denmark.

Speaker 6 They were like telling me that I had that an opportunity to get in school. I was like, me to school? Oh my god, no, I don't want to do that.

Speaker 6 And they were like, but listen to me, you are this person, you are full of energy, you have so much positive vibes in your body that we mean that you will be great to this job.

Speaker 6 And I was like, okay, what is this job?

Speaker 1 Her union suggested she train to become a nursing assistant.

Speaker 6 And I was thinking like for like 15 seconds and look up into the ceiling and I was like, hmm, okay.

Speaker 6 But what about money? I'm a single mom. I cannot have afford to pay school.
And he was like, but no, yeah, but you are getting,

Speaker 6 how do you call it, your payments, yeah,

Speaker 6 doing the school.

Speaker 1 The Danish government would pay 110% of the unemployment benefit to people studying in industries where there is a shortage of labor.

Speaker 1 Rakul could get this higher payment from the government by studying social work and healthcare.

Speaker 6 I was like, wow,

Speaker 6 I want to try to do that.

Speaker 1 Raku enrolled and studied for the next five and a half years. And she didn't need to take on an extra part-time job.

Speaker 6 You're living a normal life, and you can give your children food in their mouth without thinking about, oh, we need to save 10 crones for this and 15 for that.

Speaker 6 We did not live like that.

Speaker 1 When Rakwul graduated this summer, she landed that job as a nursing assistant, helping patients.

Speaker 6 Strokes,

Speaker 6 cancer,

Speaker 6 depression,

Speaker 6 everything. So we are like helping them up on the footstep.

Speaker 1 So from Ruckwood's perspective, this whole unemployment situation was pretty good.

Speaker 1 She had the opportunity to leave a job she didn't feel was suitable and retrain for another while getting a decent allowance each month from the government. This is flexicurity in action.

Speaker 1 But for a less motivated person, we wanted to know if there was a risk this safety net might become a hammock.

Speaker 5 So you want to know about the flex security.

Speaker 1 Yes, so we'll talk about that. Morden Graising is a deputy director general at the Danish Agency for Labor Market and Recruitment.

Speaker 1 If the government pays unemployed people fairly well, doesn't that create the incentive for people to quit their jobs and just stay unemployed?

Speaker 5 Exactly. But that's one of the main arguments of having an extensive active labor market system is to create motivation.

Speaker 1 Active labor market system. As in the government helps with retraining and connecting unemployed people with jobs.

Speaker 1 It might even mean the government tops up people's wages at first as they start working again. But there's expectations on the unemployed person.

Speaker 5 Basically, there's an

Speaker 5 unwritten contract that, okay, you receive these social benefits. They are quite generous.
But then you have to participate in activities and be

Speaker 5 active in seeking jobs and document that you you are active pursuing to get a job.

Speaker 1 Unemployment benefits are sanctioned if the person doesn't meet these responsibilities.

Speaker 5 So yeah, this incentive is there and that is why we have a quite intensive and

Speaker 5 some would say aggressive active labor market system because we are pursuing that easy individual are getting back into jobs very, very quickly.

Speaker 1 Morton says this muscular approach balancing rights and responsibilities, has worked.

Speaker 5 It seems like it's performing quite well. We haven't, in many years, we've had a high employment and also our unemployment is very low actually.
So

Speaker 5 well, basically the results are quite good.

Speaker 1 It's true that raising unemployment benefits alone will likely raise joblessness. But the economic literature shows that adding training and job counseling to the mix often helps get people into jobs.

Speaker 1 Results vary on specific programs.

Speaker 1 As for whether a country like the US could copy and paste Denmark's approach to unemployment, well, we already have the flexible part.

Speaker 1 Workers in the US have among the lowest protections from getting fired among rich countries. As for the security part, Morton was actually pretty tempered.

Speaker 5 Yeah.

Speaker 5 It's hard to make a short-term advice because this model, this institutional build-up, takes many years of building up trust and the build up of

Speaker 5 institutions.

Speaker 1 A critical part of the flex security puzzle is unions, like the union Ruckwell was part of that work collaboratively with the government and employers to help their unemployed members.

Speaker 1 If those relationships are acrimonious, then the machine doesn't work as well.

Speaker 5 If you look at the performance of the Danish labor market and the Danish economy,

Speaker 5 one would say that this might be the bumblebee that in theory couldn't fly, basically.

Speaker 1 And that buzzing economy is working for Raku. Her new job is a far better match for her.

Speaker 6 I love my job. Seriously, really much.
So I put 150% in my job.

Speaker 1 You're a people person, so this is a great job for you.

Speaker 6 Yeah, seriously, really.

Speaker 1 You know, this all feels really relevant right now as we talk about how AI is coming for everyone's job, even like white-collar jobs now.

Speaker 1 Yeah, flex security may help ease the pain to transition to a new job. I could use a flex security blanket right now.
And the label, made in Denmark.

Speaker 1 This episode was produced by Cooper Katz McKim and Sierra Juarez with engineering by Robert Rodriguez. It was fact-checked by Tyler Jones.

Speaker 1 Kake and Canada edits the show, and the indicator is a production of NPR.

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