Vikings IRL – Farewell to welfare?

Vikings IRL – Farewell to welfare?


Hi. My name is Lisa Nordbo and this is Vikings In Real Life. Throughout the financial crisis, the Nordic welfare states how gone from being seen as overly socialistic societies with high taxes to maybe becoming the future role model for welfare systems. The Scandinavian countries do well in almost every survey when it comes to economic growth, wellbeing and equality and other countries look to us to copy what we’ve done. But is the Nordic welfare model really the welfare model of the future? Recently, a Nordic group of scientists published a report commissioned by the Scandinavian unions, to see how the Nordic model is doing. And the conclusion? If the Nordic politicians don’t act now the welfare states as we know them won’t exist in 2030. To understand what is happening, let’s first take a look at the Nordic welfare model. Here in Scandinavia we have progressive tax systems. This means that your tax rate is dependant on your income, or in short – the more you earn, the more you pay. This gives us the ressources to have universal welfare, meaning that everybody gets the benefits. such as free education, free healthcare and paid maternity leave. But the Scandinavian group of scientists pointed out, that Nordic welfare model runs the risk of giving in to social and financial challenges when we look towards 2030. To explain why this is happening and what we can do, I’ll call an expert or – as we like to call them – a talking head. Today’s Talking Head will be Jon Erik Dølvik, senior researcher and leader for comparative research at the University of Oslo. Hi Jon. Hello. So what are the major challenges when we look towards 2030? There are several challenges, but first of all I would like to stress, that when we have analysed the Nordic models we have a much broader perspective than the welfare system as such. A major point in our analysis is that it’s the entire interplay between economic governance, the organisation of the labour market and the welfare state and the interplay between these three basic pillars of the Nordic model, as we call them, has been crucial for the succes of the Nordic model in the past and in our review will be a major precondition for mastering the challenges ahead. But when looking at the particular challenges, there are of course obvious changes that have been going on for a while and that are likely to be reinforced That is a strong ageing of society, meaning that the share of the really old and elderly will more than double within 2030 while the labour force, or those in the age of the labour force, will shrink or stagnate, it differs a little bit between the various countries. At the same time migration, on-going migration which is likely to increase with climate change and further globalization will make society more diverse and more multiple. All together implying that there are challenges especially when it comes to securing the high employment rate that has been the basis of the funding of the welfare systems in the Nordic countries and a basis for the egalitarian distributional structure. With changing work force, were we see tendencies of stagnating participation in working life I think, we point out that as a major issues, major trend that has to be turned and that means that inclusion of the new immigrant population, that is growing and likely to continue growing is a key factor, both to secure the viability of the welfare state, to turn the trend towards higher inequality that we point towards which also shakes many of the basic foundations in the Nordic model. And on top of that we have to renew and reorient the economy towards a climate friendly system of production and this is really a triple adjustment challenge. It’s the combination of these different pressures which, I think, will imply a tougher ride in the coming 15 years. So, with these major challenges it seems like the Nordic model is failiing, but is it failing? No, that would be a vast exaggeration. In the report we analyse the development in the Nordic countries over the past 25 years and what is striking is actually how well the Nordic countries have fared compared to any other grouping of countries in Europe and in the world, acutally. And what is striking is that the Nordic countries since their deep crisis in the early 90’s have managed to adjust during a periode of major turbulence in the surroundings. Think about what’s been going on in Europe, globalisation, the digitalisation and so on and so forth and contrary to all predictions in the early 90’s the Nordic model have managed to adjust and to climb back to the proper international rankings of efficiency and equality in many respects. So the model is by far not failing, but we see cracks and weaknings in the important preconditions for continuing this success. So what should the Scandinavians do when we look towards 2030? We have to do a lot when it comes to providing and laying the conditions for the inclusion of people with a different background, different compentencies, different language, different cultures within the – so far – fairly homogenous Nordic working life. That’s one thing. On the welfare state front, the growing expenses for elderly people will of course mean that we have to look at the ways of financing and the ways of spending and all the Nordic countries will sooner or later also have to look at how to strengthen the tax base for this common good, in a way, which the welfare state is. There is a strong support in the Nordic populations for retaining the welfare state but that’s mostly a matter of finding smart ways of expending and changing the tax system and make it conducive to participation in working life, conducive to investment in real production and in forward looking production and not just speculating in financial assets. I think there are many things to be done on many fronts and the proof of the pudding is whether you manage to convince the people that you have a credible strategy that assures people that this will lead to renewal that is in the interest of the common good and if people lose that faith, if the trust that has distinguished the Nordic countries, if that is evaporating, then it’s a huge loss and it will be very difficult. So there you have it. But even though the Nordic countries aren’t great, we’re doing better than most. Thank you for watching, please leave a comment and follow us on Facebook for more real stories on vikings in Scandinavia.

Daniel Yohans

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