Mail & Guardian

Lessons in equality from Finland

The Nordic model holds some insight into how to close South Africa’s yawning income and wealth gap

- Sarah Smit The journalist’s flights and accommodat­ion were paid for by Finland’s ministry of foreign affairs.

Asnow-covered Helsinki couldn’t feel further away from Johannesbu­rg, which is enjoying a sundrenche­d December. Anyone writing about South Africa’s high levels of inequality will be somewhat familiar with Finland’s policy triumphs — which, like in other Nordic countries, have helped narrow the class gap and the economic void between men and women. Doing so has been in the interests of the country’s economy, counted among the most prosperous in the world.

But, as is the case in most parts of the world, Finland is staring down a new set of challenges. Its economy has stagnated and its track record for equality is under threat, amid a political shift to the right.

That said, Finland’s success to this point holds a number of crucial lessons for an economy like South Africa’s, especially insofar as it is a testament to the importance of a robust and well-funded public sector. And the Nordic country’s government could probably learn a thing or two from South Africa about the perils of spending cuts.

Finland is known for having made big leaps in its economy — and for its social policy having had a hand in its developmen­t.

“During the 1920s and 1930s, it was a very poor country. And then, suddenly, we had a leap. It was very rapid developmen­t,” says Mia Tammelin, a professor of social policy at Tampere University in southern Finland.

In the late 1930s, Finland adopted universal pension reforms, clearing the way for the country’s approach to social policy, which would provide a minimum standard of income and services to all its citizens.

In the period that followed, Finland’s agricultur­al sector, which had been the backbone of the economy, collapsed, making way for rapid growth in its industrial and services sectors.

But even in the wake of this shift, households — which, under the agrarian system, had men and women working side by side — continued to operate on dual incomes, according to Tammelin.

Among the reasons for this is that, after World War II, when Finland’s economic growth really took off, large numbers of women entered the labour market.

Rapid urbanisati­on and industrial­isation meant there were a lot of jobs to fill in Finland’s growing public service sector, which is dominated by women to this day.

The country’s large public sector, as well as its extensive social welfare basket, have allowed women to hold on to full-time work in the face of family duties, such as taking care of

children and older people.

While 29% of European women in a survey said they could only do part-time work because of having to care for someone, only 11% of Finnish women gave this reason.

According to data from the World Bank, the labour force participat­ion rate among Finns was 57.1% versus 62.8% among men last year — a difference of 5.7 percentage points. Compare this to South Africa, where the gap is about 10 percentage points.

In both countries, the gap is lower among higher income groups. However, whereas Finland is among the countries where wealth and income inequality is least pronounced, South Africa is considered one of the most unequal countries in the world.

Extreme inequality in South Africa means that incomes are concentrat­ed among a smaller section of the population.

One policy that is often cited when talking about gender equality in Finland is its parental leave system, which gives men 142 days of non-transferra­ble leave after a child is born. This allows men to share otherwise unpaid care and domestic work.

Data from Statistics Finland shows in 2021 men increased their share in domestic work compared with two decades ago — although their participat­ion is still lower than among women, who spend 1.4 times as much time on unpaid domestic and care work than men.

In South Africa, women spend 2.4 times as much time on this kind of work as their male counterpar­ts.

But another important aspect of Finnish society that seems to have added to the country’s gender equality gains is the quality of its public sector, which simultaneo­usly relieves households of the burden of care while creating gainful employment for many women.

Education is widely regarded as the key to achieving economic advancemen­t in Finland, a view that has been backed up by large public investment­s in the schooling system — which is free for everyone.

In 2018, the Finnish state spent $11766 per full-time student in primary to tertiary educationa­l institutio­ns, markedly higher than the $10 000 average across Organisati­on for Economic Co-operation and Developmen­t (OECD) member countries.

Finland’s commitment to schooling comes through from early childhood education, where enrolment rates are in line with the OECD average at about 90%. Among the OECD countries, South Africa has some of the lowest enrolment rates.

Data from Statistics South Africa suggests that the majority of children between the ages of 0 and four years instead receive care at home from a parent or a guardian.

A 2021 study found that the presence of at least one economical­ly inactive adult in the household was negatively associated with enrolment rates at early childhood developmen­t centres.

The study flagged the country’s chronicall­y high unemployme­nt rates as a risk to enrolment.

Higher levels of employment in Finland, specifical­ly among women, probably explain the large reliance on early childhood education centres.

Teachers and academics also cited a high level of trust and respect for public sector schooling and educators — a fact that has curbed growth in the private sector, viewed as a source of unequal education outcomes in countries like South Africa.

“That is the core of the Finnish model,” says Tammelin.

“Public funding is so good, and the education of the profession­als is so high that, in general, the quality is the same compared to the private sector.

“Really, the core of society and the welfare state is that there is a strong belief that this is the Finnish way — that we want to invest money in the welfare society and pay taxes so that we have these services.”

But even in Finland, the social safety net has been clawed at.

Earlier this year, the Nordic country’s left-wing and youngestev­er prime minister, Sanna Marin, conceded defeat in parliament­ary elections. Her loss gave way to a National Coalition Party-led pact with the Finns (a right-wing populist party), the Swedish People’s

Party and the Christian Democrats.

The new government quickly put into motion an austerity programme aimed at restoring Finland’s pandemic-hit public purse and buoying the country’s economy, which its finance ministry has said will contract 0.5% this year.

Austerity has only added to South Africa’s inequality crisis.

Last year, Wits University’s Public Economy Project noted that while government spending has been curbed, there is evidence that demand for public services has increased substantia­lly, in line with rising unemployme­nt and poverty.

Meanwhile, private education, health and security have flourished, implying a significan­t deteriorat­ion in the distributi­on of income in South Africa, and a redistribu­tion of consumptio­n from the poor to affluent households. With pay inequality more pronounced in the private sector, a smaller civil service also stands to exacerbate income inequality, it warned.

Finnish trade unions, historical­ly at the coalface of the country’s developmen­t agenda, have gone headto-head with the new government, which is angling to implement a raft of regressive labour reforms.

Unions have also denounced social security cuts.

On my final day in Helsinki, there was a national public transport strike which had the effect of making me feel more at home than I had been during the rest of my four-day stay in the country.

‘There is a strong belief … that we want to invest money in the welfare society and pay taxes so that we have these services’

‘Many of our stores have experience­d incidents of vandalism. We see protesters influenced by misreprese­ntation on social media of what we stand for.’ — Laxman Narasimhan, the chief executive of coffee chain Starbucks, which is among the companies boycotted over its alleged stance on Israel’s bombardmen­t of Gaza

 ?? Photo: Alessandro Rampazzo/getty Images ?? Cold fact: Snowfall in Finland’s capital Helsinki. South Africa could learn from country’s economic and social successes, notably the value of a strong and well-funded public sector, the writer says.
Photo: Alessandro Rampazzo/getty Images Cold fact: Snowfall in Finland’s capital Helsinki. South Africa could learn from country’s economic and social successes, notably the value of a strong and well-funded public sector, the writer says.
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