The Leanza Bøhnsdalen Social Exclusion Curve!!!
The Leanza Bøhnsdalen Social Exclusion Curve challenges 150 years of modern economic theory, by introducing a new concept not contemplated by modern economists!!! But before that, let’s take a look at some very interesting thoughts about Inequality described in the issue January/February 2016 of the Magazine Foreign Affairs. In his article: Inequality and Modernization, Ronald Inglehart mentions the following: “An expensive welfare state caused inequality to decline for most of the 20th century. The emergence of a postindustrial society, however, changed the game once again. The success of the modern welfare states made further redistribution seem less urgent. Noneconomic issues emerged that cut across class lines, with identity politics and environmentalism drawing some wealthier voters to the left, while cultural issues pushed many in the working class to the right. Globalization and deindustrialization undermined the strength of unions. And the information revolution helped to establish a winner-take-all economy. Together these eroded the political base for redistributive policies, and as those policies fell out of favor, economic inequality rose once more.
NOT ABOUT THE MONEY: Large immigration flows, especially from lowincome countries with different languages, cultures, and religions, changed the ethnic makeup of advanced industrial societies. The rise of religious fundamentalism in the United States and xenophobic populists’ movements in Western European countries represents a reaction against rapid cultural changes that seem to be eroding basic social values and customs – something particularly alarming to the less secure groups in those countries”. We conclude then that, in most developed economies (not just in the Nordics), a welfare state has helped to bring down inequality. However, why does inequality persist even after a country has implemented a public education and healthcare systems and welfare? My revolutionary curve, explains WHY!!! Consider the case of Norway:
The Norwegian economy presents a total of 2.700.000 million people in active age.
However, over 600.000 live off benefits (welfare), representing over 22% of the
total active population.[27] Of these 600.000, today there are 126.000 (4,6%) people that are
considered unemployed, that is: qualified to enter the job market and actively looking for a job.[28] While employment reached a historical minimum of 3% and
was sustained there for a very long period of time, the Oil crisis has increased this
number and is still on the go due to re-estructuring in the private sector. The other
almost 20% is not considered in the statistics, so I give the name: Socially
Excluded. All of these people are clearly below the poverty line, since they get no
income. Now in Norway, this people are called “uføre” (handicap) and are
considered to be “sick”. The truth is, this group is divided in three: 1. The real
handicap 2. Youngsters between 20 – 25 who don’t like to work and abuse the
system 3. Foreigners, refugees and people that are permanently excluded from the
workforce due to discrimination.
Let us focus on the 3rd group, the most important for this essay. In the previous
chapter, I described the situation in Sweden, were 1 of 2 refugees are still outside
the workforce after 10 years in Sweden. In Norway, the situation is exactly the
same.[29] The Social System in Norway makes it so that a starting salary is high, but
then it flats out due to the taxation system. However, not just about anyone can get
a job at the base of the pyramid. Even to work as a waiter, some basic skills are
required: language skills, mathematics, writing, and most importantly: presence.
You have never seen a refugee work as a bartender have you? It will probably scare
away customers. So for people with very low skills few jobs are available: mainly
cleaning jobs. But how many cleaning people can you have? Even getting a
cleaning job is competitive today in Norway. So what do those people that do not
have the basic skills to enter the job market do? They live off welfare… for all their
lives! Discrimination is also at hand. The children of the refugees will be grown up
in bad areas, be around other people in the same situation, have funny last names,
and also struggle in the job market. The example of Norway can be used to many
other nations. In the case of Argentina, the “refugees” would be the Bolivians.
Discriminated in the job market, they live in guettos and mingle only with each
other. Many of them have not even basic reading and writing skills, making it even
more difficult to enter the job market.
The Leanza Bøhnsdalen Social Exclusion Curve reflects that, once public education
and healthcare is in place, there will still be a large percentage of the population
that remains “poor”, by “poor” NOT meaning people living in the streets
(indigent), but people whose basic needs are covered by welfare, and have no
possibility of social ascension, and escaping the welfare system. These “pools” of untapped potential workers will eventually lead to the rise of criminality, rapes and
murders.
But although government efforts are of course in place, there is a big mistake:
trying to make this people move from the “social exclusion” zone to the
“employed”. This switch is light-years away. Even if the people had the skills,
sending 1.000 CVs to get a cleaning job will de-motivate them. They will struggle
in the job market, because the decision makers are of usually private actors. So, for
example, living in the wrong area of town will make them “unemployable”. The
efforts must focus then on switching these people from “Social Excluded” to
“Employable”. Only if they are considered “Employable” will they be able to make
it in the job market. Also, prioritization in the public sector could be a good idea.
The government has of course more control of the public actors.
The issue is that, being permanent clients of the welfare system, they could in the
long term become really “handicap” (or develop psychic issues which they didn’t
have before due to long periods of inactivity). It is proven that the human being
needs to be active, needs to work, needs to be constantly doing something. Being
idle for long period of time will make them slower, dumber, and less attractive for
the job market. Consider that it is not just foreigners that are included in this group.
Being over 40 could also make you already “old” for the job market in Norway.
And again, being outside the job market very long will reduce significantly their
chances of being employed. The same for young people. If for whatever reason
somebody is living off welfare for 5 years, this will put a big question mark on that
person’s CV. Their new employers will be skeptical; their will look at them with
mistrust. This is called “den onde cyrkel” or “the evil cycle”, were the road to
welfare is a one-way street from which there is no coming back.[30]
Consider the following article in the same Foreign Affairs Magazine from
January/February 2016 called “How to create a society of equals” by Pierre
Rosanvallon. “There has been much discussion of rising economic inequality in the
developed world recently, along with a generalized sense that the problem has
grown to intolerable proportions. But at the same time, there has been little
movement to address the situation. The result is widespread discontent together
with practical passivity. (…) If inequality is to be reduced once more, therefore, the
effort will have to be grounded in a solid, shared conception of what equality
involves and why it is worth promoting. There are two visions of the issue:
1. The populist vision: it could be labeled as “national protectionism”, and
should be understood as a solidarity alternative to unbridled capitalism. It is
sustained by forming a community of some by excluding others. The idea of
fatherland implies a kind of inequality, but to the detriment of foreigners. In
a new era of intensive globalization, with economic stagnation among the
middle and lower classes in developed countries and the welfare state in
crisis, xenophobic views are returning on both sides of the Atlantic as a
powerful political force, with outsiders -foreigners, immigrants, refugees–
portrayed as enemies exploiting and undermining existing national
communities.
2. The social-liberal option: it seeks to update and extend the traditional
liberal notion of equality of opportunity, by eliminating barriers of upward
mobility.
The populist vision of equality is more about exclusion than inclusion and has little
attractive positive content. And although the social-liberal vision lays the basis for
a number of valuable practical policies, it is unsuitable for establishing a general
and universal social theory of equality, since it focuses exclusively on individuals.
So something more is needed, a positive theory into which the politics of equality
of opportunity could be embedded”.
This fantastic article describes very well the case of inequality. Whereas the
populists consider themselves “pro-equality”, they really look for an equalitarian
society within their own ethnical group, and not for ALL. This is the case of
socialists both in Norway and Sweden, who are really National Socialists.
Meaning, they want wealth to be well distributed, but amongst ethnical Norwegians
and Swedes. The foreigners (and their children) are not welcome unless from a
group of similar ethnicity (Germanic) and up to a certain degree. This doesn’t make
them REAL socialists in the sense that they look after their own interests and that
of their kind, not for ALL.
Consider the cases of Argentina and Chile. They do have public education so, even
if you are living under conditions of poverty, your children will still have access to
school. Why then don’t they simply finish school and achieve social integration?
“We are not we, but our environment” – I would dare to say. The parents send their
children to ask for money even at age 7. They have of course no long-term
mentality or prospect, and do not value education. The children see everyone
around them turn to criminality and they do the same. They do not value life as
much, they never know what can happen to them. Not to mention, as noted before,
the discrimination in the job market.
Last year, critic showered over Argentina’s former president Cristina Fernandez de
Kirchner, who said that “Today the poverty rate is less than 5 percent, and the rate
of indigence is 1.27 percent, which has made Argentina one of the most egalitarian
countries”. Opposition claims that poverty in Argentina actually reaches 27%. But
again, it all comes to how you measure poverty. Her critics take a minimum
household income, and consider that those who perceive less than that income are
poor. However, that form of calculation does not include public services. Consider
that in Argentina, education and healthcare is public for everyone. Measuring
poverty in a “Scandinavian way” (and all countries should measure alike of
course), it could be considered that poverty in Argentina is 5% plus a 22% of
“Socially Excluded” (who receive as well some sort of Welfare benefit), amounting
to 27%. The Argentinian guettos are slum quarters, a type of poverty that is not
found in Scandinavia. If that 5% was provided a better infrastructure, we could also
say (as they say in Scandinavia), that there is no poverty in Argentina. I will then
now create a revolutionary definition for poverty in the 21th century for developed
nations, but separating poverty into two levels:
The Old Poor: are those you find in Africa (extreme poverty) or India (slum
quarters). They live in unhealthy conditions, and do not have access to basic
services. Education and healthcare is not available to them, with high levels of
analphabetism. You could say there is a 5% of this remaining in Argentina (slum
quarters), although they do have access to free healthcare and education which they
do not use at it’s potential due to a “live by the day mentality”.
The New Poor: are the ones described in my curve “The Socially Excluded”. This
are found today in all developed countries. Norway and Sweden present 20% rates
of socially excluded, even if they sell themselves as “poverty free” countries. This
type of poverty is also found in the US, Canada, Germany… no developed country
is exempt. They are usually immigrants (or refugees), from undeveloped countries
who were too unskilled to be attractive labor for the job market in the developed
world. This is not such a big issue. The issue is that their children, born and raised
in that same country, and with access to all basic services, are raised in violent,
tough environments of social exclusion. They do not develop the same long term
mentality that characterizes the structures and institutions they live in, but form an
internal anger or hatred towards the society that excludes them. Living in “rich
countries”, but being socially excluded, they feel poor and it is easy for them to
turn to the road of criminality and violence.
So, even with a system that offers public healthcare and education, we find that
large percentages (closing 20%) are still segregated. These people are non-existing
to official statistics. You see them on the streets, you wonder who they are, where
do they come from. But nobody knows. The problem of social exclusion has
always existed and will continue to do so, even in the most modern societies. The solution is of course complex, and
does not see any light in the short term. However, the Leanza Bøhnsdalen Social
Exclusion curve can now be applied to any developed nation as a way to measure
21st century poverty.
No comments:
Post a Comment