Forwarded message:
>From [EMAIL PROTECTED] Thu Dec 19 15:25:22 1996
From: D Shniad <[EMAIL PROTECTED]>
Message-Id: <199612192325.PAA16663@fraser>
Subject: The situation in Norway (fwd)
To: [EMAIL PROTECTED] (Sam Lanfranco),
[EMAIL PROTECTED] (Michael Perelman)
Date: Thu, 19 Dec 1996 15:25:08 -0800 (PST)
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Gentlemen,
I signed off Labor-l and Pen-l before receiving this forwarded
message. You might want to forward it to your respective lists.
Happy holidays.
Sid Shniad
Forwarded
message: > From [EMAIL PROTECTED] Thu Dec 19 14:18 PST 1996
> From: D Shniad <[EMAIL PROTECTED]>
> Message-Id: <199612192218.OAA04515@fraser>
> Subject: The situation in Norway
> To: [EMAIL PROTECTED] (D Shniad)
> Date: Thu, 19 Dec 1996 14:18:10 -0800 (PST)
> MIME-Version: 1.0
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>
> THE NEW YORK TIMES INTERNATIONAL Dec. 13, 1996 Front Page
>
> WELFARE'S SNUG COAT CUTS NORWEGIAN COLD
>
> By YOUSSEF M. IBRAHIM
>
> OSLO, Dec. 9 - Suffer from rheumatism? The Norwegian
> state will send you to the Canary Islands for a month
> of therapy, all expenses paid. Husband walked out,
> leaving children to raise? Not to worry. As a single
> mother under the generous Norwegian welfare system,
> you will get special subsidies for the children and
> paid leave from your job so you can stay home and rear
> them.
>
> Take Dr. Sidsel Kreyberg, 42-year-old pathologist. When
> her husband left her in 1987, leaving her with two
> young children, she was immediately embraced by the
> state.
>
> For nearly eight years, until both children reached age
> 10, the state paid her a pension. Other support systems
> helped, including free day care, subsidized housing and
> vacations, and free medical and dental care.
>
> The Government also footed the bill for Dr. Kreyberg to
> fulfill her old ambition of getting a Ph.D. in
> epidemiology at the University & Oslo.
>
> Now she is off welfare and has a better-paying job than
> before she went on. The other day, she stood in her
> living room overlooking a vista of snow-covered forests
> and the Oslo Fjord. She beamed at her daughter,
> Karoline, 12, and son, Karsten, 10, and proclaimed,
> "Look at the result." The entire world, it seems, is
> dismantling the welfare state, privatizing the public
> sector, downsizing government, reducing subsidies and
> cutting social programs that were once sacrosanct.
>
> >From Europe to Africa, across most of Latin America and
> even in the once fabulously wealthy Arab oil countries,
> governments plagued by soaring budget deficits are
> everywhere embracing the free-market gospel preached in
> the 1980's by President Reagan and Prime Minister
> Margaret Thatcher of Britain.
>
> Everywhere, that is, except Norway.
>
> Buoyed by an unending gush of oil revenue and guided by
> a national commitment to egalitarianism, Norway's 4.35
> million people are fattening the mother of all welfare
> states.
>
> Even business people -- including those who export
> pulp, paper, lumber, chemicals, fertilizers, aluminum
> and transport machinery to the globalizing world of dog-
> eat-dog capitalism -- join in their nation's adherence
> to social democracy.
>
> In Norway, where individual tax rates can climb above
> 50 percent, citizens benefit from a number of
> entitlements and a shrunken Workweek.
>
> Inflation is below 2 percent. The unemployment rate is
> the lowest in Europe. Economic growth in recent years
> has ranged between 3 percent and 5 percent. Oil exports
> are running at 3 million barrels a day, second only to
> Saudi Arabia's, and the petrodollars are feeding a
> budget surplus this year of $6 billion more than the
> Government's $61 billion expenditure.
>
> The Norwegian welfare cake, surely the sweetest in the
> world today, includes these ingredients:
>
> *Annual stipends of $1,620 for every Norwegian child
> under 17, which rise slightly for every other child as
> a family grows and rise still more if the family lives
> in a remote part of the country.
>
> *Retirement pay, equivalent to industrial workers'
> pensions, for all home-
> makers, even those who have worked outside the home.
>
> -------------------------
> ONE COUNTRY EATS CAKE WHILE
> THE REST OF THE WORLD DOWNSIZES
> -------------------------
>
> *Forty-two weeks of fully paid maternity leave.
>
> *Reimbursement for all medical costs exceeding $187 a
> year per individual.
>
> These benefits may be financed by oil, but they are
> undergirded by the national character.
>
> Norwegians, with their profoundly egalitarian
> persuasion, frown on wide disparity in income. This
> permits one of the highest personal-tax rates in the
> world and provides the Government with vast latitude
> for social engineering.
>
> "It is a sense of solidarity," a Western diplomat said.
> "High taxes enjoy a great national consensus because
> in a way it's like they see them as a way to be saved
> from themselves."
>
> Norwegians have a word for their anti-elitist views,
> Jantelaw, which means nobody should start thinking he
> or she is better than anybody else. Politicians have
> lost their jobs for forgetting this.
>
> The disdain for the trappings of wealth and power,
> which among other things restricts executive pay and
> mandates extensive workplace rules, meets surprisingly
> little opposition from business.
>
> Henning Holstad, owner and president of the Tiny
> Transport Company, says his after-tax annual pay is
> about double the $38,500 his workers average, compared
> with multiples of 10 or more, and sometimes 100 or
> more, in the United States.
>
> In addition to high personal income taxes, Norway
> imposes a 23 percent sales tax; gasoline costs $6 a
> gallon, and a glass of beer in a bar goes for $8.
>
> "It's enough for money to change hands twice or three
> times for it to go back to the Government and the
> welfare state," Mr. Holstad said in an interview.
>
> Business leaders do complain about short workweeks
> and high overtime rates and paid sick leaves of up to
> two weeks. But they have made peace with the system.
>
> "We would like to fine-tune some attitudes on sick
> leave, working hours and minimum wage," said Karl Glad,
> director general of the Confederation of Norwegian
> Business and Industry, "but I don't believe many
> businesses here think it is worth taking the social
> risks associated with radical change."
>
> In fact labor in Norway, defying a world trend,
> continues to wring con- cessions from management.
> Having won agreement to lower the retirement age to 64
> from 67, the unions are now pushing to lower it to 62,
> at full pension.
>
> The 165-member Parliament, dominated by the Labor
> Party, is expected to approve legislation soon for a
> "Lifelong Learning" program, which would give
> Norwegians a year off their jobs at full pay every
> decade or so to hone their work skills. The employers
> and the state would split the cost of paying their
> salaries.
>
> Even with so many social programs, Norwegian business
> is doing quite well for itself. It doesn't hurt that it
> has one of the best educated and technologic- ally
> savvy work forces in the world. It certainly helps
> that Norway reduced the corporate tax rate to 28
> percent from 50 percent four years ago.
>
> To save on labor costs, Norwegian companies have
> rapidly computerized their operations.
>
> "Ten years ago I had 750 book- keepers," said Stein-
> Erik Hagen, 40, chief executive of the Hakon Group,
> Norway's largest supermarket chain. "Today I employ
> only 150. Our goal is to reduce much more."
>
> In Hakon's ultramodern office building just outside
> Oslo, pots of free coffee and plates of free fruit and
> cakes are placed at strategic locations as an extra
> perquisite for employees who work in a building
> decorated with fine paintings and sculpture.
>
> Mr. Hagen recited the familiar business complaints
> about high costs and extensive regulations in Norway.
> But, asked if he would favor abandoning his country's
> approach for a British-style model, he shook his
> head.
>
> "We are a very social democratic society," he said,
> "and we don't know another system. It may be costly,
> but there is social peace. There are no poor people in
> Norway, and I don't want to see any. There are no
> strikes, and no high demand for salary increases. I
> want to adjust the system, but only to preserve it."
>
> Health Minister Gudmund Hernes, who also served in the
> Education and Finance Ministries and who is considered
> the Government's welfare guru, said the country would
> never abandon its social programs.
>
> "Even if we didn't have oil," he said, "we would not
> rethink the notion of the welfare state."
>
> Protecting workers against the vagaries of the
> marketplace is only part of it, Mr. Hernes said. In his
> view, the state's investment in workers' health,
> financial security and education pays big economic
> dividends. For that reason, he is a pioneer of the
> Lifelong Learning plan.
>
> "The most powerful drug you can supply a person is
> education," he said. "In Norway, we are schooling our
> population to be at the forefront of postindustrial
> society."
>
> He scorns Britain's experiment in downsizing government
> and world-wide union-busting over the last quarter
> century.
>
> "They are producing such dissatisfaction and enormous
> strains on society," he said. "That will come back to
> haunt you."
>
> Such talk might seem facile coming from a Government
> that is propped up by the exportation of more than a
> billion barrels of oil a year to a thirsty world. But
> what will happen when the oil money runs out?
>
> If policy makers have their way, it never will.
> Starting this year, Norway will divert its budget
> surplus -- $6 billion of a total of $10 billion in oil
> revenues -- to a new Petroleum Fund. The money is to be
> invested outside the country to avoid over-heating the
> economy. By 2005, the Government hopes to have
> accumulated $100 billion.
>
> It is money that the conservative minority wants to
> keep away from welfare benefits proponents.
>
> "My party wants to lock it up," said Ansgar Gabrielsen,
> a leading member of the Conservative Party and
> Parliament's social affairs committee.
>
> "I don't trust politicians who have money at their
> disposal. Here, if you have money or no money, it
> doesn't make a difference," he said. "We all go to the
> same doctors; we all get the same services."
>
> "That is the good side of Norwegian society," he added.
> "But it remains good as long as people say, 'What can I
> do for the community?'
>
> "Now, if everyone starts saying, 'What can the
> community do for me?' and if this goes on without
> limits, the system will go 'poof.'"
>
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 916-898-5321
E-Mail [EMAIL PROTECTED]
