Europeans blaze a more efficient path to prosperity

By John Burbank

Can you imagine a world in which you receive health care when you need it, and don’t have to worry about losing your coverage when you change jobs? How about when you have a child, being able to take six months to care for your baby at three-quarter pay? Or when you retire, receiving an annual pension worth three-fifths of the average of your best five years’ salary? A place where college tuition costs close to nothing and a train gets you from Everett to Seattle in 15 minutes, every half hour?

In this world, as an employer I do not have to negotiate health insurance. I do not have to figure out how to start a deferred compensation plan. I do not have to cover costs for leave when one of my employees has a baby. I do not have to set up a cafeteria-style program of benefits and hope my employees guess the correct amount of pre-tax dollars to cover their child-care costs.

All these social responsibilities would be shifted from my business, enabling me to focus on one thing: creating the best possible products and services. An educational pipeline provides me a ready supply of talented workers — and I can get back and forth between business meetings in Everett and Seattle without the hassle of sitting in traffic.

Of course, in the largest and most dynamic economy in the world, this isn’t just a fantasy. Wait, aren’t we talking the United States? No, it’s Europe — specifically the European Union — with an economy based on universally available health coverage, higher education, pension security, maternity and paternity leave, and a transportation system that moves goods and people around with speed and efficiency.

I got a taste of this world recently. Our daughter, newly graduated from college, has a job, thank goodness. She teaches English in French elementary schools, and we were lucky enough to visit her. We got our metro passes in Paris, which enabled us to whisk all over the city without a worry about cars and traffic jams. We took a side trip to Amsterdam — traveling 400 miles in three and a half hours, on a train cruising at 186 miles per hour! When my daughter had a medical problem in January, she found a private doctor near her apartment (almost all personal physicians are in private practice), got treated immediately, and had to pay only a small fee.

Shared social policies actually save money for employers. It is more efficient than having each employer figure out their own package of benefits (if they even offer them). And it generates profits. That’s why Europe has more Fortune 500 companies than the U.S. and China combined.

Europe is also corporate America’s biggest target for foreign investment, with U.S. businesses making far greater profits there than anywhere else in the world. So our own corporations, even while they stymie efforts for increasing health coverage and family leave in our country, invest in Europe for profits.

It also saves money for workers and consumers. For their taxes, Europeans receive a seemingly endless list of benefits and services for which Americans must pay extra and out-of-pocket costs via premiums, deductibles, hidden fees, tuition and other charges — in addition to our taxes.

Even Americans who have health care coverage are paying escalating premiums and deductibles, while Europeans receive health care in return for a modest amount deducted from their paycheck. Americans are saving a hundred thousand dollars per child for their college education, yet European children attend for free or nearly so. On this side of the Atlantic, Americans scrape to save the amount they need for retirement beyond Social Security, but the European retirement system is much more generous. Many Americans pay extra for child care, or self-finance their own sick leave or parental leave after a birth, but Europeans receive all of these and more in return for paying their taxes. When you add it all up, it turns out that many Americans pay out as much as or more than Europeans — but we receive a lot less for our money.

This is not a business versus workers equation. What we can learn from Europe is that when we enable all citizens to get a good education, guarantee health care and provide good pensions, we also enable businesses to focus on production, innovation, productivity and profits.

That’s the key to getting out of this recession and unlocking the door to a prosperous economic future.

John Burbank is executive director of the Economic Opportunity Institute in Seattle (www.eoionline.org ). His e-mail address is john@eoionline.org.