Everett, Wash.
Published: Wednesday, October 31, 2007

Finns show how prosperity, broad safety net can co-exist

By John Burbank

 Earlier this month I led a group of policy makers to Finland to study how early childhood care is practiced in that country. It was a return trip for me. After high school I worked in Finland for a year. Back then, Finland was a rural country. Many of the roads were dirt. We used an outhouse. A big farm had 20 cows. It was an economy on a different scale than in America. I returned 10 years later and hardly recognized the country, with new roads, new houses, new prosperity. And I returned a decade later, in the middle of a severe recession. But I didn't see one homeless or hungry person. The community centers and swimming pools were in great shape. The trains ran on time, and quickly. The ski tracks were well maintained. Most of all, there was an almost palpable sense of opportunity and hope for the future.

I have gone back several more times since then, and each time the country is more prosperous, the people are more educated, and their quality of life is better. You can't help but be impressed by the politeness of the people, how good the city of Helsinki looks, and especially people's shared sense of stewardship and pride in their public infrastructure. The Finns have made it easy to bicycle and walk to work. For every new highway, a new bicycle path is built. The Helsinki train station is the heart of downtown Helsinki, with high-speed trains coming and going throughout the day. The metro system was built in anticipation of population growth, rationalizing that growth around subway stations.

The robust Finnish private economy is embedded in a democracy that emphasizes work, entrepreneurship, economic security and opportunity, and educational advancement. What this means is that as a resident of Finland, you don't have to worry about health coverage, the cost of child care, higher education tuition, a good vacation or a decent pension. So many of the things we worry about are not even up for discussion at the kitchen table of a Finnish household.

For a country that trumpets freedom, think how freeing it would be to know that you could take a new job offer and not lose your health coverage. Think how freeing it would be to know that when you have a child, you are entitled to paid leave from work to care for that child. Think how freeing it would be to know that your child had the right to high quality child care and pre-kindergarten. Think how freeing it would be to know that when your child goes on to the university or technical school, as a greater proportion of Finns do now than Americans, the tuition won't come out of your take-home pay.

The Finnish social system isn't free. A middle-class worker pays an income tax of 28 percent and a Social Security tax of 4.5 percent. Finns also pay a value-added tax of 22 percent on goods and 17 percent on food. Now think about what they get in return: health care, education through the university level, a sustaining and secure pension, assisted living when you need it, early learning and care for all children, guaranteed vacation starting at four weeks a year, an excellent freeway system and a train system that moves people at 100 mph between major cities. It is a cost-benefit comparison that works.

In our country we tend to think that government-funded services and the taxes to fund them undermine economic vitality. But the Finnish model shows that a social democracy that lifts all people up and gives them the foundations of economic security also provides a platform for economic entrepreneurship and growth. It is no coincidence that Finland now holds second place for global competiveness, at the same time it is ranked tops in the world for the quality of its education system, according to the World Economic Forum. (The United States ranks 6th and 15th in these categories.)

Our discussions with the chief lobbyist for Nokia drove home this point. He said, "Sure we complain about taxes. But we all benefit." He just got back from family leave to care for his young son. His colleague just had surgery for which she paid a total of $50 for two days in the hospital. And these benefits don't accrue to just the privileged. They accrue to all. Now that's a democracy that works!



John Burbank, executive director of the Economic Opportunity Institute (www.eoionline.org), writes every other Wednesday. Write to him in care of the institute at 1900 Northlake Way, Suite 237, Seattle, WA 98103. His e-mail address is john@eoionline.org.
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