Danes rethink a welfare state ample to a fault

It began as a stunt intended to prove that hardship and poverty still existed in this small,wealthy country,but it backfired badly

Written by New York Times | Copenhagen,denmark | Published: April 30, 2013 2:31:30 am

SUZANNE DALEY

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 sceptical 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.

In past years,Danes might have shrugged off the case,finding Carina more pitiable than anything else. But even before her story was in the headlines 16 months ago,they were deeply engaged in a debate about whether their beloved welfare state,perhaps Europe’s most generous,had become too rich,undermining the country’s work ethic. Carina helped tip the scales.

With little fuss or political protest —or notice abroad—Denmark has been at work overhauling entitlements,trying to prod Danes into working more or longer or both. While much of southern Europe has been racked by strikes and protests as its creditors force austerity measures,Denmark still has an AAA bond rating.

Denmark’s long-term outlook is troubling,though. The population is aging,and in many regions of the country people without jobs now outnumber those with them.

“Before the crisis there was a sense that there was always going to be more and more,” said Bjarke Moller,the editor in chief of publications for Mandag Morgen,a research group in Copenhagen. “That is not true anymore. There are a lot of pressures on us right now. We need to be an agile society to survive.”

Denmark has among the highest marginal income-tax rates in the world,with the top bracket of 56.5 per cent kicking in on incomes of more than about $80,000. In exchange,the Danes get a cradle-to-grave safety net that includes free health care,a free university education and hefty payouts to even the richest citizens.

Few experts here believe that Denmark can long afford the current perks,however. So Denmark is retooling itself,tinkering with corporate tax rates,considering new public sector investments and,for the long term,trying to wean more people—the young and the old—off government benefits.

“In the past,people never asked for help unless they needed it,” said Karen Haekkerup,the minister of social affairs and integration,who has been outspoken on the subject. “My grandmother was offered a pension and she was offended. She did not need it.”

Students are next up for cutbacks,most of which are intended to get them into the workforce more quickly. Currently,students are entitled to six years of stipends,about $990 a month,to complete a five-year degree which,of course,is free. Many of them take even longer to finish,taking breaks to travel and for internships before and during their studies.

In trying to reduce the welfare rolls,the government is concentrating on making sure that people like Carina do not exist in the future. It is proposing cuts to welfare grants for those under 30 and stricter reviews to make sure that such recipients are steered into jobs or educational programs before they get comfortable on government benefits.

Officials have also begun to question the large number of people who are receiving lifetime disability checks. About 240,000 people—roughly 9 pe cent of the potential workforce—have lifetime disability status; about 33,500 of them are under 40. The government has proposed ending that status for those under 40,unless they have a mental or physical condition that is so severe that it keeps them from working.

Carina was not the only welfare recipient to fuel the sense that Denmark’s system has somehow gotten out of kilter. Robert Nielsen,45,made headlines last September when he was interviewed on television,admitting that he had basically been on welfare since 2001.

Nielsen said he was able-bodied but had no intention of taking a demeaning job such as working at a fast-food restaurant. He made do quite well on welfare,he said. He even owns his own co-op apartment.

Unlike Carina,who will no longer give interviews,Nielsen,called “Lazy Robert” by the news media,seems to be enjoying the attention. He says he is greeted warmly on the street all the time. “Luckily,I am born and live in Denmark,where the government is willing to support my life,” he said.

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