Balancing Bootstraps and A Helping Hand
In many European countries we are discussing how to preserve a sustainable level of welfare benefits and social services. The debate has been spurred not only by the economic crisis, forcing many European governments to tighten their belts and implement rough economic reforms, but also the EU enlargement and the free movement of EU citizens making use of the benefits of the single market. This is especially true for my country, Denmark, where very unpopular reforms of our unemployment scheme to cut down public expenditure have led to a fundamental debate about the future of our welfare system.
Welfare systems in Europe and the U.S. are very different animals, based on fundamentally different principles and approaches. Still, the debate in the U.S. is in some ways related, asking the same question we are trying to answer in Europe: how should wealth be redistributed?
During the last decades, income inequality in the U.S. has increased significantly, resulting in unequal access to education, healthcare, and other services. While social issues are often complex and affected by many factors, the consequences are quite evident: an increasingly high number of homeless people, as is the case for Denver, alcoholism, suicides and domestic abuse in Anchorage, and the “Tale of two Cities” in Chicago, where segregation and poverty, particularly in the African-American neighborhoods, is a huge challenge.
And let’s not forget the much discussed and publicized riots and demonstrations in Baltimore. As a Chicago Police Officer said during a ride along in one of the poorest districts in Chicago: “This is not only a reaction against us, the police, it is an act of frustration and desperation. It is about poverty, unemployment and inequality. But they should still not destroy their own communities”.
The decision of Baltimore´s State Attorney to file charges of murder and false imprisonment against police officers in the death of Freddie Gray has calmed things down in Baltimore and throughout the US. But it can easily be a “long hot summer” as long as the root causes remain unaddressed.
The question is: how to address the underlying issues of inequality in a country where self-reliance is veritable gospel, and everyone is deemed able to climb the ladder of success “if they only pull themselves up by the bootstraps”, where social services are mostly provided by nonprofit organizations and philanthropy, and taxes and public administration are largely seen as a necessary evil that should be kept to a minimum? This view of minimum taxation is exemplified (to the extreme) by Colorado´s Taxpayer’s Bill of Rights (TABOR), the most restrictive tax and spending limitation in the U.S., restraining growth in government, and by Alaska, where state taxes aren’t collected at all.
While many European countries are making more use of “bootstraps” in our welfare systems, the U.S. might need to extend the helping hand. This balancing act will be crucial for continued prosperity and stability in both Europe and the US, and to me it seems that we have a lot to learn from each other.
Mercan-Ellen Nielsen, a Spring 2015 Euroepan Marshall Memorial Fellow, is Denmark's Chief Negotiator to the UN Climate Change Negotiations.
The views expressed in GMF publications and commentary are the views of the author alone.