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xchrom

(108,903 posts)
Tue Jun 24, 2014, 06:21 AM Jun 2014

what wealth gap? danish welfare narrows disparity

http://hosted.ap.org/dynamic/stories/E/EU_WEALTH_GAP_DENMARK?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-06-24-06-09-22

COPENHAGEN, Denmark (AP) -- This is what it's like to live in Denmark, a nation with a narrower wealth gap than almost anywhere else: You've been jobless for more than a year. You have no university degree, no advanced skills. You have to pay a mortgage. And your husband is nearing retirement.

You aren't worried.

If you're 51-year-old Lotte Geleff, who lost her job as an office clerk in January 2013, you know you'll receive an unemployment benefit of 10,500 kroner ($1,902) a month after taxes for up to two years. You're part of a national system of free health care and education for everyone, job training, subsidized child care, a generous pension system and fuel subsidies and rent allowances for the elderly.

And high taxes.

Denmark's sturdy social safety net helps explain why its wealth gap - the disparity between the richest citizens and everyone else - is second-smallest among the world's 34 most developed economies, according to the Organization for Economic Cooperation and Development, surpassed only by the much smaller economy of Slovenia.
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what wealth gap? danish welfare narrows disparity (Original Post) xchrom Jun 2014 OP
With the wealth of this country, there is no reason that any American woo me with science Jun 2014 #1
+1 xchrom Jun 2014 #2
+2! Enthusiast Jun 2014 #6
Was it Denmark that recently closed it's prisons newfie11 Jun 2014 #3
K/R marmar Jun 2014 #4
It's an unusual economy, in some ways; the world's highest household debt relative to GDP muriel_volestrangler Jun 2014 #5
Could be the numbers are skewed because they are holding so much of their wealth collectively? toby jo Jun 2014 #7
kick woo me with science Jun 2014 #8
One of many countries that actually does what many US politicians profess is impossible: pampango Jun 2014 #9
kick woo me with science Jun 2014 #10

woo me with science

(32,139 posts)
1. With the wealth of this country, there is no reason that any American
Tue Jun 24, 2014, 06:27 AM
Jun 2014

should ever have to fear hunger or homelessness or lack of health care. We are deliberately kept in fear to make us desperate for work and easy to control and exploit.

It is time to boot the sociopaths from control of this nation and take it for the people.

newfie11

(8,159 posts)
3. Was it Denmark that recently closed it's prisons
Tue Jun 24, 2014, 06:54 AM
Jun 2014

( maybe it was Norway).
My point is, the people don't have to worry about their next meal or how to pay student loans etc etc etc.
How can anyone think the American system is better. It is skewed to benefit the rich and throw the workers an occasional bone.

muriel_volestrangler

(101,082 posts)
5. It's an unusual economy, in some ways; the world's highest household debt relative to GDP
Tue Jun 24, 2014, 08:01 AM
Jun 2014
An investigation into household borrowing revealed that high indebtedness curbed spending and economic growth during the financial crisis, the Copenhagen-based Systemic Risk Council, which Rohde chairs, said yesterday. Still, those findings aren’t grounds for alarm, according to Rohde.

“By far the major part of Danish households’ debt is carried by families who are robust enough to be able to handle shocks to interest rates or incomes,” Rohde said yesterday in a written reply to questions. “The threat to financial stability from that corner is therefore not serious in the current situation.”

Danish households owe their creditors 321 percent of disposable incomes, according to the Organization for Economic Cooperation and Development. That’s the highest ratio in the world and a level that’s prompted warnings from both the OECD and the International Monetary Fund to rein in borrowing. Danish authorities have argued that households aren’t at risk thanks to high pension and household equity levels.

http://www.bloomberg.com/news/2014-01-06/world-s-highest-household-debt-burden-probed-by-danish-council.html


This actually puts Denmark's 2000 Gini index of wealth (not income) at 0.808 - higher than the USA at 0.801 (only Zimbabwe and Namibia are higher in that list). By the time the 2013 Credit Suisse Global Wealth Databook was published, they reckoned Denmark's Gini index for wealth was above 1 (1.077 - Table 3.1)), because so many people had a negative net wealth - they reckoned the top 20% of the population had 92.9% of the net wealth (Table 1.5) (compared to 86.7% for the USA), and the bottom third or so of families are all in net debt - the bottom 40% of families collectively owe 20% of the country's wealth to the rest, while for the USA, the bottom 40% have a collective net wealth of 0 (again, see table 1.5).

I actually wrote to them, because I found that Gini index of more than 1 so strange, and this was the reply of a professor who was one of the authors:

The Danish wealth distribution data is strange because so many people are recorded with negative wealth, most likely because student debts are high and are kept well into middle age. Last year we had old data with which we were not comfortable, so we dropped it altogether and estimated the distribution as we do for countries without distribution data. This year we substituted the data for 2009 which became available to us.

The total wealth of the bottom 70% of Danish wealth holders is approximately zero according to these data. Hence the very large Gini, which even exceeds the normal upper bound of 100% which would apply if all wealth holdings were non-negative. It does not indicate that wealth is especially unequal at the top end, but is reflected in the Gini value which takes account of the bottom wealth holders as well as the top.

Other countries also record significant negative wealth holdings, but the Danish data is exceptional (see Databook table 1-5). The survey data appear to be valid, but are probably not produced in a way that is comparable to other countries. We are investigating how to align the numbers with other countries, but in the meantime report the best information available to us.
 

toby jo

(1,269 posts)
7. Could be the numbers are skewed because they are holding so much of their wealth collectively?
Tue Jun 24, 2014, 11:44 AM
Jun 2014

In the sense of high taxation and redistribution, 70% of the population can have no net worth but be ok financially due to the collective.

pampango

(24,692 posts)
9. One of many countries that actually does what many US politicians profess is impossible:
Wed Jun 25, 2014, 08:12 PM
Jun 2014

supporting a strong safety net with high progressive taxation without killing the economy that generates the wealth.

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