When we, as Americans, look at such a social welfare system, our invariable first response is, "With benefits like that, who would want to go to work?" We would wonder how many people are playing the system. When—in an extensive interview with a Finnish social worker—I tried to voice that concern, she at first literally didn't understand what I was getting at. She finally responded that in their city of 60,000 people, their system knew of approximately one hundred people whom they thought "should have been working." She went on to say, however, that they had just done a more in-depth study of these one hundred individuals. Extensive medical and psychological testing had determined that approximately half had subtle disabilities that really did prevent them from working. In the end, no more than 0.08% of the population was abusing the system.
Because virtually all Finns belong to the same racial and cultural group,
racial segregation is not an issue. Neither is there much
economic segregation. The richer and the poorer live in the same neighborhoods; their children go to the same schools. As a result the disparity in services provided to rich and poor that is so prominent in the United States is largely absent.
The result of this system is that Finland has little poverty as we would define it in the United States. There are certainly poorer people, but their incomes would generally not be allowed to fall below our poverty levels. Even the poorest would not be "poor" by the United States definition.
There is, of course, a cost to such a way of conducting government. In the United States, average Federal and local
taxation (not including social security taxes) is about 21%. The range in the other Western nations is between 40% and 50%, although not all of that increase is due to social insurance programs.
The problems in the United States, of course, are quite different from those in Finland. Finland is a small country; the overwhelming issue of segregation (and the legacy of slavery) does not exist. The population is much more homogeneous and people tend to identify with one another.
But there are several take-home lessons:
- It is possible to create a social insurance program that does not allow the income of people to fall below that which is considered necessary. So defined, poverty is not an inescapable fact of human nature, political science, or even capitalist economy.
- Creating such a system is expensive. It requires significantly higher levels of taxation than Americans have been willing to subject themselves to.
- There is nothing intrinsic in this kind of social insurance that leads to lack of motivation or laziness. Given the proper support, virtually everyone will use the program appropriately (although it is important to recognize that the enormous physical and psychic damage already done to many poor people would demand much more intensive support for the first generation or two).
How might we, then, build such a system in the United States?
