Paul L. Caron

Tuesday, July 16, 2019

NY Times: Immigration Tests Sweden's High Tax/Generous Social Safety Net Model

New York Times, The Nordic Model May Be the Best Cushion Against Capitalism. Can It Survive Immigration?:

Swedes have long been willing to pay high taxes for a generous social safety net. But that willingness is being tested by an influx of refugees.

In a global economy increasingly besieged by rage over inequality and the pitfalls of winner-take-all capitalism, Sweden has long stood out as a kinder, gentler sort of country, a potential template for other nations eager to avoid destructive populism.

The so-called Nordic model that prevails in Sweden, Denmark, Finland, Norway and Iceland has been engineered to protect people from the commonplace economic afflictions assailing many developed countries, and especially the United States. There, the loss of a job can swiftly imperil health care, housing, sustenance and mental well-being. Under the Nordic model, governments typically furnish health care, education and pensions to everyone.

The state delivers subsidized housing and child care. When people lose jobs, they gain unemployment benefits and highly effective job training programs. When children are born, parents avail themselves of paid leave that seems unimaginable in most societies — 480 days in Sweden.

“If you’re born in Sweden, you’ve basically won at life,” says Adam S. Posen, president of the Peterson Institute for International Economics in Washington. ...

But the endurance of the Nordic model has long depended on two crucial elements — the public’s willingness to pay some of the highest taxes on earth, and the understanding that everyone is supposed to work. The state ensures that working-age people are prepared with the skills for high-wage jobs, in industries like technology and advanced manufacturing.

Sweden’s sharp influx of immigrants — the largest of any European nation, as a share of the overall population — directly tests this proposition.

At the peak in 2015, 160,000 refugees sought asylum in Sweden, a country of 10 million people. That is equivalent to more than five million refugees arriving in the United States in a year.

Over the last two decades, the share of foreign-born people has risen from 11 percent of the Swedish population to 19 percent. Many of the refugees have little education and do not speak Swedish, making them difficult to employ.

Public opinion surveys show that Swedes remain willing to accept their tax burden. But as citizens absorb the reality that many refugees will rely on welfare for years, some are balking at the cost while demanding limits on government aid for jobless people.

Tax, Tax News | Permalink


It's a shame nobody could have seen this coming...

Posted by: AMTbuff | Jul 16, 2019 8:06:10 PM

I'll have a book on this in the next decade or so.

Posted by: Mike Livingston | Jul 16, 2019 8:29:20 PM