Denmark is the liberal utopia of Europe. Here are some of the government benefits afforded to its citizens:
Free health care
Free child care
Free education through six years of college
Four years of unemployment benefits
Free maid service for the elderly
Lifetime disability benefits
Government retirement pensions starting in your 50's
A minimum wage of $20 an hour--with short work weeks and extended vacations
By the way, these benefits are provided to everyone--regardless of their need for government assistance or their ability to pay on their own. And of course, all of this is funded by the highest personal and corporate tax rates in all of Europe.
But now all of that [i.e. the generous welfare state] is threatened not by the global recession but by the growing attitude among the populace that it no longer "pays to work". The article describes how a single mother of two makes 47-thousand dollars in government benefits--without having to think about looking for a job.
COPENHAGEN — It began as a stunt intended to prove that hardship and poverty still existed in this small, wealthy country, but it backfired badly. Visit a single mother of two on welfare, a liberal member of Parliament goaded a skeptical political opponent, see for yourself how hard it is.
It turned out, however, that life on welfare was not so hard. The 36-year-old single mother, given the pseudonym “Carina” in the news media, had more money to spend than many of the country’s full-time workers. All told, she was getting about $2,700 a month, and she had been on welfare since she was 16.
The poster child of the new Danish attitude has become "Lazy Robert" Oleson--who is quoted in the article as boasting about having lived on welfare programs exclusively since 2001--and is pictured sitting in a curbside lounge chair, with his feet up, along the curb on a bright sunny day. Lazy Robert says most available jobs are "demeaning".
Add to that, the graying of of the Danish population and you run into the same problem every other nanny state reaches--too many on the dole, and not enough working to foot the bill.
So Denmark is making some changes to "encourage" people to actually get back to work and contribute to their society.
As you can see above, both before and after the global economic downturn the share of the Danish population that works is substantially above the OECD average. The United States, which has one of the stingiest welfare states in the OECD is also above average in this regard. But Denmark exceeds even the United States in terms of the share of the population that's working.
It goes unmentioned in the [NYT] article that Denmark remains apart from the sovereign debt crisis in the Eurozone by possessing its own currency, the krone, and had strict banking regulations which insulated the country from the worst of the 2008-09 Financial Crisis. Furthermore, besides Denmark's AAA credit rating noted in the [NYT] article, Denmark possesses low inflation (2.6%), unemployment levels comparable to the U.S., a labor force participation rate comparable to the U.S., public debt (45% of GDP in 2012) at around half that of the U.S., Canada, or Germany, and is considered to be the 5th easiest country in which to business in 2013 (right behind the U.S.) by the World Bank.
Denmark has long held the title of the best place on earth to be laid off. With an expensive, generous welfare state, and the world’s most lavish unemployment insurance scheme, virtually no one falls through the cracks upon losing a job.
But the government unveiled an unpleasant surprise in June , when it halved the country’s whopping four-year unemployment benefits period to help mend its finances after the financial crisis.
The reason: Danish studies show that the longer a person goes without a job, the harder it is to find work. Many people get a job within the first three months of entering the system, but many more wait until just before benefits expire to take anything available.
“So you need to have a period of unemployment that is as short as possible,” Claus Hjort Frederiksen, the finance minister, told me recently in Copenhagen.
I love this quote from the nation's Minister of Social Affairs who oversees the welfare state:
"They think of these benefits as their rights. The rights have just expanded and expanded. But now we have to go back to the rights and the duties. We all need to contribute."
Doesn't that sound eerily familiar to the arguments that were used for the Affordable Care Act and increased spending for colleges and universities "Every American has a right to cheap health care" and "Everyone has a right to a low-cost college education." You never seem to hear that "Everyone has an obligation to pay for that" too.
The most ironic thing in how the nanny states are collapsing under their own weight, is that we here in America are being told all the time how we need to be "more like Europe"--when Europe is finding out they needed to be "more like us".
The "flex" part of flexicurity is a flexible labor market. Workers can be fired with little notice. Roughly 800,000 Danes, or about 30% of the labor force, switch jobs each year, government statistics show. Only 10,000 of the turnover is attributed to layoffs. Most move on to what they see as better jobs.