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View Full Version : How would you feel about "Flexicurity"?



TeamCoachellaHellYeah
10-18-2008, 08:34 AM
Given the current economic climate. I pulled up a 2 year old article on the economist regarding the very flexible labour market and I want to get your opinions on this. Would you pay more taxes for a system like this?


Denmark's labour market
Flexicurity

Sep 7th 2006 | COPENHAGEN
From The Economist print edition
A model that works

THE Danish finance minister, Thor Pedersen, was cock-a-hoop as he outlined his economic record and spending plans for 2007: “We'll end up owning the whole world.” Extravagant brags aside, Mr Pedersen had reason to be cheerful. In its five years in power Denmark's centre-right government has presided over a boom. Unemployment, at 4.5%, is at its lowest in over 30 years, inflation is below the euro-area average and growth is faster. The budget surplus hit 3.9% of GDP in 2005.

It is Denmark's exceptional performance on jobs that has attracted most attention. Over the past three years the Danes have shaved the public payroll by almost 1% while boosting private-sector employment by 3.7%. Latest estimates suggest that 34,000 private-sector jobs will be created this year.

The government cannot take all the credit, but many economists fulsomely praise “flexicurity”—a peculiarly Danish blend of a flexible labour market, generous social security and an active labour-market policy with rights and obligations for the unemployed. Workers pay high taxes, but trade job security for a guarantee, should they be laid off, of time-limited but generous unemployment pay that they can live on and a promise that they will get new jobs fast. Hiring and firing can happen from one day to the next, which gives Danish companies a decided competitive edge over rivals in Sweden and Germany. About a fifth of Danish workers lose their job in any given year but most find a new job quickly.

Although flexicurity is much admired abroad, it is not necessarily easy to copy. For one thing, it is based on a century-old habit of dialogue between employers and unions that is not easily exportable to other countries seeking a quick fix. Moreover, despite enviably low unemployment and labour shortages in industries from construction to health care, the Danes are having difficulties nudging the long-term unemployed into work. The post office complains that it cannot recruit new postmen. Newspaper distributors have started importing delivery boys from Poland. One ferry operator's effort to recruit 365 new workers was stymied by an epidemic of seasickness among the unemployed who applied. Even in Denmark, it seems, would-be workers have their limitations.

I do like the idea of the retraining programs especially for the industrial midwest. It could go a long way..However, It cost Denmark about 3% of GDP which would be a few hundred billion. A little less then what we spend on the military. However, I imagine we would be so scared of the turn down if we had a system like this. Also, even now. Denmark has 1.6% unemployment so the system does work. Your thoughts?

TeamCoachellaHellYeah
10-18-2008, 08:36 AM
more on it from wiki


Denmark’s current low unemployment figures (2.8% in 2008) and its low social exclusion rates, coupled to output growth of over 3% have led the European Union to adopt flexicurity as its leitmotiv in its European Employment Strategy. In particular, Guideline No.21 of the Integrated Guidelines for Growth and Employment for the period 2005-2008 calls on Member States to “…promote flexibility combined with employment security and reduce labour market segmentation, having due regard to the role of the social partners”.[11] Unlike the controversial youth labour laws proposed in France, this strategy does not discriminate against youth, but rather holds the same expectations for all Danes: an unemployed person is required to constantly seek employment or further education in order to receive full benefits. Flexicurity strategies have been implemented in other European countries, such as Finland and The Netherlands.

The high benefits and training provision that this system requires also require a higher burden of taxation upon the higher earning members of the society. Denmark currently has the highest total taxation of any country in the world.

clarky123
10-18-2008, 09:04 AM
Unemployment is indeed low, but in general, they work longer, leave school earlier and get paid less. And as a result, job satisfactifaction is very low and you don't know from one day to the next when you are going to get chucked out on your ear..

TeamCoachellaHellYeah
10-18-2008, 09:36 AM
If job satisfaction is low then why this?


BBC NEWS
Denmark 'world's happiest nation'

Denmark is the happiest country in the world, according to the latest World Values Survey published by the United States National Science Foundation.

The annual study surveyed people in 97 countries to discover who is happiest.

The survey asked people two simple questions about their happiness and their level of satisfaction with life.

Puerto Rico and Colombia completed the top three happiest nations. Zimbabwe was found to be the least happy, with Russia and Iraq also in the bottom 10.

The study was directed by University of Michigan professor Ronald Inglehart. He says that unlike other studies, which have focused on economic factors, his research has found that financial prosperity is not the only reason for happiness.

"Our research indicates prosperity is linked with happiness. It does contribute," he says, "but it is not the most important factor.

"Personal freedom is even more important, and it's freedom in all kinds of ways. Political freedom, like with democracy and freedom of choice."

A happier world

The world is becoming a happier place overall, according to the survey, which has been conducted since 1981.

Dr Inglehart says that gender equality is also an indicator of happiness, as is rising social tolerance. He says that both of these things have risen dramatically in recent years.

The world's wealthiest nation, the United States, was found to be the world's 16th happiest country, behind Switzerland, Canada and Sweden.

The study also found that the countries at the bottom of the list all struggle with widespread poverty or authoritarian governments.

Zimbabwe, which is gripped by hyperinflation, and has recently seen a controversial presidential election marred by violence, was found to be the least happy nation amongst the countries covered by the survey.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/in_depth/7487143.stm

Published: 2008/07/03 11:25:06 GMT

© BBC MMVIII

TeamCoachellaHellYeah
10-18-2008, 09:38 AM
and wages can't be that low...from 2007
http://www.economist.com/countries/Denmark/profile.cfm?folder=Profile-FactSheet


GDP per head (US$; market exchange rate) 57,206
GDP per head (US$; purchasing power parity) 36,544

and higher then Britain I might add, but not by much.


GDP per head (US$; market exchange rate) 45,338
GDP per head (US$; purchasing power parity) 34,555

clarky123
10-18-2008, 09:52 AM
It's a big discussion. Do you want to know if an economic model like Flexicurity would work in the United States? It's a huge country with some 'unique problems' especially at the moment, you know this Team.
I do see where you are going with this, and you want security, but the model isn't an entirely new concept. Generally, politicians in the US and in Europe can't even agree on the most basic things like healthcare never mind making sure everyone has a job.

TeamCoachellaHellYeah
10-18-2008, 09:56 AM
I wasn't asking if it could work, that is an entirely different discussion. I was asking how the folks here felt about such a system. Especially considering the taxes needed to fund it. Am I under the correct understanding that the labor market in Britain is similar to the US?

TeamCoachellaHellYeah
10-18-2008, 10:00 AM
It's a big discussion. Do you want to know if an economic model like Flexicurity would work in the United States? It's a huge country with some 'unique problems' especially at the moment, you know this Team.
I do see where you are going with this, and you want security, but the model isn't an entirely new concept. Generally, politicians in the US and in Europe can't even agree on the most basic things like healthcare never mind making sure everyone has a job.

However, if we are going to discuss if it could work. I think it would have to be done on a state to state basis. I haven't the foggiest idea how it would work nationwide. The US state waste some much potential by not experimenting more. California does (which is sometimes good and sometimes terrible) but most state just lay back and wait for others to try things out. Each state should be taking advantage of their nature advantages but alas SOME don't.

clarky123
10-18-2008, 10:10 AM
The labour market in the UK is now entirely service based. The US has a totally different climate and has a far bigger pack of cards to play with in terms of agricultral, tourism and natural commodites and therefore is far more self sufficient.
Your question of increased taxes required to fund a Flexicurity type employment model in my opinion is a good one considering the banks are now partially, if not wholly owned by the governments and therefore, in theory, the people (both in the US and the UK).
Perhaps it is time for the president, or the sagely Sara, to consider these important isues.

TeamCoachellaHellYeah
10-18-2008, 10:54 AM
Sarah Palin can barely find Canada on the map..let alone discuss the pros and cons of the Economic System of a European Country.

TeamCoachellaHellYeah
10-18-2008, 10:56 AM
The labour market in the UK is now entirely service based. The US has a totally different climate and has a far bigger pack of cards to play with in terms of agricultral, tourism and natural commodites and therefore is far more self sufficient.
Your question of increased taxes required to fund a Flexicurity type employment model in my opinion is a good one considering the banks are now partially, if not wholly owned by the governments and therefore, in theory, the people (both in the US and the UK).
Perhaps it is time for the president, or the sagely Sara, to consider these important isues.

Also, I was under the impression that the Toursim sector in the UK was much bigger then what you are suggesting? Is this not the case?

TeamCoachellaHellYeah
10-18-2008, 11:27 AM
BTW: I am a little disappointed that I haven't gotten more post from the board. Maybe it is just a slow day?