The Two Paths of Social Democracy
In a neighborhood on the outskirts of Copenhagen, a Syrian immigrant who has been working there as a delivery worker for years receives a letter from the government: his residence permit has been revoked because authorities now consider his country of origin safe. In a nearby neighborhood, several Somali families face a municipal decision to demolish their building, which has been included in a program aimed at dismantling ghettos and dispersing their residents. Since 2018, if a neighborhood with a non-Western minority performs poorly on two out of four criteria—employment, crime, education, and welfare dependency—the Danish government seeks to attract new residents; if unsuccessful, it begins demolishing housing to “dilute” the area and renew its habitat and demographics.
Such policies, unthinkable in Spain, are central to the government led by Mette Frederiksen. Since June 2015, when she took over the leadership of the Social Democratic Party, the party has embraced strict immigration policies as a core part of its platform. Under her leadership, Denmark has tightened nationality requirements, restricted social benefits for immigrants, and begun sending asylum seekers to processing centers in third countries while their applications are reviewed. These measures, which prioritize the labor integration of immigrants and encourage the return of those who do not adapt, enjoy broad support among Danish voters and are being imitated by neighboring countries, despite outraging many European progressives. Additionally, the use of the term “Western” as a criterion has been deemed discriminatory by the Advocate General, and a ruling from the European Court of Justice (ECJ) is pending.
Danish social democracy believes that mass immigration undermines equality and threatens its generous welfare state. If voters perceive that an influx of immigrants makes it harder for low-skilled workers to find jobs, housing, and public services, that belief erodes public support for taxation, condemning traditional left-wing parties to irrelevance and fueling the rise of the far right. They recognize that societies need immigrant workers but aim to manage the process by minimizing costs and protecting social cohesion.
This new immigration policy was key to the Danish Social Democratic Party’s return to power in June 2019, after regaining electoral support in the most working-class districts. Since then, it has slightly expanded the Scandinavian welfare model but with structural reforms aimed at ensuring its sustainability. On the one hand, it has introduced early retirement for manual workers, regulated real estate speculation, and taxed methane emissions in agriculture. On the other, it has secured the viability of pensions by linking the retirement age to life expectancy and incentivizing longer working lives.
The contrast with Spanish Socialist Party (PSOE) could not be starker. During the same period, the PSOE government has tolerated massive and uncontrolled immigration, which seems to overwhelm social services, encourage opportunism, and exacerbate the housing shortage. For Danish socialists, such disorder and the fact that most immigrants are low-skilled primarily benefit the wealthy and older generations. These groups employ most immigrants and do not compete with them for jobs, social services, or education. Instead, they merely consume the personal services that immigrants provide, which in Spain is facilitated by highly flexible labor regulations for domestic workers—a divergence from the general labor framework that aligns with the extraordinary political power of pensioners and public employees.
Moreover, in recent years, Spanish socialism has used the welfare state as a short-term electoral tool, favoring immediate consumption by these same affluent and older demographics, even at the expense of future sustainability. Its policies, which have barely allowed it to cling to power, pose significant long-term risks. First, by increasing public employment and salaries in an administration that ranks internationally as highly inefficient. Second, by shifting the burden of public service provision onto private actors, leading them to reduce supply—already evident in rental housing and soon likely in low-skilled employment. Lastly, by weakening the pension system, reversing a previously agreed-upon reform, and indexing pensions above inflation, financing them through higher taxes and debt. Additionally, the low skill level of many immigrants further jeopardizes the long-term sustainability of pensions.
Although adapting institutional solutions between countries as different as Spain and Denmark is difficult, the Danish model suggests that the left can remain competitive without resorting to electoral populism. While the PSOE risks the future of the welfare state it claims to have created, its Danish counterparts offer an alternative that has not only proven more electorally effective but is also far more solid and sustainable.
Social democrats from all parties would do well to take note, including those in Spain’s Partido Popular, which since last fall has proposed measures that are far from “Danish.” The German SPD should also pay close attention as it negotiates the future coalition government with the CDU-CSU center-right.
Ultimately, the viability of Europe’s “social market economy” depends on whether social democracy—still ideologically dominant—can purge its populist tendencies and balance social justice with immigration control and economic realism. The welfare state can only survive with a social contract that sets clear rules on who can benefit from it, preventing its advantages from being disproportionately concentrated among pensioners and public sector workers. Moreover, redistributive policies must not disregard their long-term economic impact.
English version prepared with ChatGPT-4.0