Rethinking the welfare state
COPENHAGEN, DENMARK— Bernie Sanders’ utopia needs fixing.
The Denmark that the Democratic Party presidential candidate wants the United States to emulate is taking a long, critical look at its welfare model as it decides which bits to scale back.
A government commission now says Denmark needs to cut jobless benefits for graduates as part of a series of tweaks to keep other, more basic welfare services affordable. It follows a push by the previ- ous administration — a Social Democratled coalition that was ousted in June — that included the introduction of meanstesting to limit Danes’ access to state support.
“Welfare is under pressure in Denmark,” said Bente Sorgenfrey, a member of the government commission and head of the country’s second-largest trade union, FTF.
“We’re experiencing that all over the place since the crisis, and the absence of funding is putting pressure on payouts.”
Denmark still boasts one of the world’s most equal societies, measured by income distribution. Its fabled welfare safety net is one of the reasons a housing slump rivalling that in the U.S. after the subprime crisis resulted in negligible foreclosure rates for the Danes. As of 2012, Denmark was the European Union’s biggest spender on social protection, at 34.6 per cent of gross domestic product, according to Eurostat data.
Denmark is cutting back state support even as revenue as a percentage of GDP rises. The country’s tax burden, the highest in the rich-world club of OECD nations, was 48.6 per cent in 2013, having grown every year since 2009.
The right-wing Danish People’s Party and the Social Democrats have both said they want more funds allocated to unemployment benefits.
Coming up with a solution that doesn’t change Denmark’s status as a welfare state, while keeping the model efficient, will be key.