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Poverty and Single Motherhood in Sweden

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    So, we have found the same general patterns of family breakup and destitution amongst Native Americans as we have seen among African Americans. In fact, through the Pine Ridge Indian tribe, we've been able to isolate the devastating effects of welfare to an even greater extent than with African Americans. 

    Let's look at one more group before moving on. So far we've only looked at the United States, but Europe, especially the Scandanavian countries, are infamous for their extensive welfare system. Wouldn't we have to see the same pattern there? The following Chart roughly illustrates the percent of money redistributed to segments of the population through government programs. Chart 48 (84):

    Wow, look at Sweden. What effect does all that welfare, government assistance etc.. have on Swedish family structure? Chart 49 (85), (corroborated) (237):

      Percentage of Births to Unmarried Mothers            

    The same pattern holds. According to nationmaster.com, Sweden also has the 2nd highest divorce rate in the industrialized world (236). However, there are some key differences in the way the Swedish system works. Sweden is a 'Welfare State' and practices what is known as Institutional Welfare:

An institutional system is one in which need is accepted as a normal part of social life. Welfare is provided for the population as a whole, in the same way as public services like roads or schools might be. In an institutional system, welfare is not just for the poor: it is for everyone. (86)

    For this reason we don't see the same high levels of unemployment and poverty as those exhibited by welfare 'beneficiaries' here in the United States. People aren't punished for working, benefits aren't taken away as soon as one begins to pull out of poverty. Neither poverty or single motherhood is subsidized by the government. Healthcare, childcare are provided free to all, and every family with children receives a monthly check from the government. There is generous government unemployment insurance of up to 80% of the former salary, but this can only be accessed if one was previously employed. But there is a small catch. Single parents receive an additional payment for each child and there are some programs that are means tested (based on income) (87)

    It is curious that Swedish rates of teen pregnancy is amongst the lowest in the world. A large percentage of these older never married women with children live with the father of the child. Cohabitation rates are very high in Sweden and women often marry sometime after the birth. We can only guess that the cash benefit is not sufficiently tempting for young Swedes, or perhaps the extensive network of counselors and support groups present in the high schools and other local programs discourage this activity. Sweden has a population of 8.8 million, ranking it in between that of New Jersey (7.7) and Michigan (9.3) (21). Having more local control and operating on a smaller scale, doubtlessly gives Sweden advantages in efficiency over the lumberings of our Federal Government. In fact, as we saw from the various charts (most notably Chart 10), when states were given more flexibility in running their own programs (1992) and when block grants were utilized during Welfare Reform (1996), progress resulted. Which makes sense, just like in business or in the military, people who are face to face with the situation, often come up with the best solutions. Of course, this is assuming that situations of prejudice and discrimination aren't occurring in local communities. As previously stated, this occurred in equal and opposite ways in the 30s with blacks being targeted for welfare by white farmers and industrialists and unfairly denied in other situations. 

    One other possible explanation for the odd combination of low teen pregnancy rates with high never married motherhood birth rates might be that the financial and social benefits of the welfare state eliminate the financial need/security of a husband. In other words, because the state pays for all the costs associated with childrearing, the need for another (or just a single male) paycheck has declined. The state has become the pseudo dad. While some may argue that women's independence from being 'financially pressured' to marry is a good thing, studies continue to show, even in Sweden, the overall mental health and standards of living are lower for children of single parents. In fact, perhaps a significant portion of the rise in divorce rates and single motherhood in the United States (and in most parts of the world), might be attributed to rising standards of living, which enable single mothers to do well enough financially to raise their children without the necessity of a father. While some may find this troubling, one would think it would be better for this to occur because of rising prosperity then through 'state Dads'.

     In any case, the main argument of this paper is against the United States government sanctioning/subsidizing poverty, unemployment and teen births. In Sweden, even if out-of-wedlock births are still sanctioned, it is still exponentially better than the incentives and disincentives present in our welfare system. So should we then adopt parts of the Swedish system as an imperfect yet necessary way to combat poverty? Not so fast. If people can raise themselves out of poverty, as is happening in welfare reform, what need is there for sweeping, expensive and burdensome state welfare programs? The Swedes pay a high cost for their style of living:  

....they also have one of the heaviest tax burdens in the world. Today, an average Swedish working family pays about half its earned income in national and local taxes. Swedes also pay taxes on investment income. In addition, Sweden has a national 25 percent sales tax that is built into the price of consumer goods. Beyond this, employers must pay corporate taxes and make payments into government pension, unemployment, and other social welfare funds. The resulting tax burden is so heavy that Swedes have a special word for it, skattetrat, which means "tax tiredness." (87)

Government spending currently equals about 60 percent of Sweden's gross domestic product (the value of all goods and services purchased in a year). U.S. government spending by contrast accounts for about 20 percent of the U.S. gross domestic product. The Swedish government's fastest growing spending areas are health services and old-age pensions. Furthermore, public employment has rocketed to account for about one-third of all jobs in Sweden. (In the United States, the government supplies less than 5 percent of all jobs.) (87)

    The (Libertarian) Cato institute offers this historical analysis of Sweden's economy (88):   

 Recall that by the early 1950s Sweden was by far the richest country in Europe. Its per capita GNP was twice the European average and 25 percent above that of Switzerland, which ranked second.

Sweden's dismal economic performance from 1970 to 1990 was no less striking than its high growth from 1870 to 1930.

After the collapse of communism, some Swedes (especially the Social Democrats) thought the Swedish model would be an attractive choice for the newly emerging democracies of Central Europe. But it has not been. Poland, Hungary, and Czechoslovakia have wisely chosen to look for free-market solutions. Other nations in that region show little interest in the Swedish model.

What should be recommended to anyone who hopes to succeed with the Swedish model? Follow the first hundred years of capitalist growth and avoid the subsequent mistakes. (88)

    Today Sweden has lower per capita GDP then the European counties of Germany, Netherlands, Austria, Denmark, Ireland, Belgium, Iceland, Switzerland, Norway, San Marino and Luxembourg. The United States ranks second amongst all countries in the world with $35,991 per capita GDP. Sweden ranks 21st with $25,985 per capita GDP. So, despite the fact that the US government creates an underclass of destitution and poverty in this country, we are still, on average, much more prosperous then the Swedes. (89)

    Despite the effusive praise by some praising of the 'equality' and the 'elimination of poverty' in Sweden, the remarkably low poverty rate in Sweden might not accurately described the conditions there. A Syracuse University study explained (90):

For example, the European Union has chosen an official line equal to 60 percent of the mean income for measuring poverty (Eurostat, 2000). However, the approach of using the average to establish a poverty line means that changes in the incomes of the richest persons affect the poverty threshold, which many scholars reject on theoretical grounds (Jäntti and Danziger, 2000: 327). Therefore, many researchers prefer using the median to establish a relative poverty line. For example, the most widely used definition of a relative poverty line establishes the threshold equal to 50 percent of the median income (Rainwater, Smeeding and Burtless, 2002). Regardless, a clear consensus is lacking and relative poverty rates based on various fractions (40, 50 and 60 percent) of either mean or median income are often reported. (90)

    The international poverty figures we hear cited all the time do not measure poverty at all! (245)  The only thing they measure is inequality. For example, by calculating the percentage of people below 50% of the median income (median is middle not average [mean]), the Syracuse study found poverty rates of 6.6% for Sweden and 16.9% for the United States. But this says nothing about what the median income is! For example, if the median yearly income is $10,000 in Sweden, but $100,000 in the United States, which country suffers the most poverty? Perhaps this is why that Heritage study showed that our 'poor' citizens are better off than the average citizens in some countries (who probably have lower 'poverty' rates!). [note: the Census Bureau's poverty figures are not measured this way; as Chart 34 shows the Census Bureau's poverty rate is 12.1. It would be interesting to measure poverty rates of other countries using the Census Bureau's methods.]

    The Australian treasury department did a study which looked at world per capita income levels Chart 50 (91):

    Using the commonly used poverty standard, more impoverished people exist in 2000 then 1900. This is a ridiculous notion, and the study warns: 

If the erroneous belief that international inequality is still worsening is not contested, it can damage confidence in open global markets for trade and investment. History has shown open markets to be the best vehicle for accelerated global and regional growth in income and living standards for the poor, and thereby for improvements in Australia’s own security and living standards. (91)

    But even so, inequality is nothing to run away from (99). It is the natural result of human progress. This is why it has been said 'a rising tide raises all boats'. The richest societies are, almost by definition, the most unequal: 

From the dawn of human history to the mid-18th century, the world was a much more equal place than today. Productivity levels across the world were very low and fairly uniform. (91)

    Economist Jane Jacobs once said: 

    "Poverty has no causes. Only prosperity has causes... Poverty can be overcome only if the relevant economic processes are in motion." (92)

    Economist Nathan Rosenberg proclaimed:

"The perception of poverty as morally intolerable in a rich society had to await the emergence of a rich society." (92)

    And Winston Churchill once profoundly stated:

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries. (93)

    Perhaps this is what we are seeing take place in Sweden...

 

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Posted 6/13/06 (by Dobber)

Welfare experiment in Sweden failing

6/12/06 Investor's Business Daily

 

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