Again, we see that serious research goes against the Shangri-La view of the Nordics as a part of the world where the normal laws of the economic universe don’t work. Of course one could argue in favor of systems with generous welfare or strong labor unions. But such policies come with a high cost: if entry-level wages are set at a high level and government benefits are almost as generous as work income for some workers, unemployment will rise. The Nordic lesson is simply that immigration, particularly of groups with limited skills, is quite difficult to combine with generous welfare policy and high entry-level wages.
The Nordic lesson is simply that immigration, particularly of groups with limited skills, is quite difficult to combine with generous welfare policy and high entry-level wages.
Could wealthy Norway, which has the oil wealth to pay for a more generous system than in the other Nordic countries, provide good opportunities for immigrants to prosper? After all, the oil wealth boosts demand for labor. Kristian Rose Tronstad explains that this high demand is offset by the fact that centralized union wage bargaining creates “barriers for less productive jobseekers, as offering their labor to lower price is not an option.” In addition: “[s]trict employment protection legislation implies that both the hiring and firing are costly, and employers therefore are reluctant to take risk.”29 Again we see that welfare state institutions are hindering the American Dream. It is worth mentioning that the differences in unemployment between natives and foreign-born people in the Nordics, as this chapter has shown, are likely underestimated. Official statistics in the Nordic welfare states hide the true unemployment rates within the welfare systems.
In Norway, this practice is quite evident. In particular, early retirement through disability pension is routinely used to classify long-term unemployed individuals who are healthy enough to work as being outside of the labor force. One study looked at individuals ages thirty to fifty-five who were granted disability pension between 1992 and 2003. This group includes 11 percent of the men and 16 percent of the women with Norwegian background. Of course, it makes little sense that a healthy country such as Norway would have a large share of its middle-aged population being actually disabled. Rather, many of those classified as disabled are simply unemployed. The trick of hiding unemployment in early retirement is even more routinely used to lower the official unemployment rate of immigrants. The same study found that a quarter of those in the same age group and born in the Middle East and North Africa in Norway were given disability pension during the same period.30
Of course, having a job isn’t the only thing that matters. The Nordic welfare states are famous for their good social and health performance. The citizens of these countries, including immigrants, enjoy universal access to health care, day care for children, elderly care, schooling, and higher education. Although the generous welfare states hinder the ability of immigrants to land a job, it is quite conceivable that these universal systems would be able to transfer favorable health outcomes to immigrants. How does the American system compare with the Nordic ones in this regard?
It is a bit tricky to compare health outcomes between different societies. One way is by looking at the Better Policies for Better Lives project, an international benchmarking that gathers information on life quality around the world. This project measures the share of foreign-born adults who themselves report to be in good health. Surprisingly, the United States has better outcomes than all Nordic countries in this regard. A much larger share of immigrants in the United States report that they are of good health. How can we understand this difference? Is it, at least in part, because different groups of foreign-born people are attracted to the United States? Or because definitions of good health differ? The significant difference in favor of the United States at the very least supports the idea that good health outcomes in the Nordics relate to the healthy cultures that people in this part of the world have. Evidently, this is not simply transmitted to those who have arrived from other parts of the world. Indeed, in the Nordic countries themselves it is widely acknowledged that significant gaps exist in health outcomes between the native born and immigrants.32 The myth of the nearly perfect Nordic health sector is more commonly found abroad.
SHARE OF IMMIGRANTS WHO IDENTIFY THEMSELVES AS NOT IN GOOD HEALTH
COUNTRY
IMMIGRANTS NOT IN GOOD HEALTH
UNITED STATES
12%
FINLAND
19%
NORWAY
28%
SWEDEN
29%
DENMARK
32%
Source: OECD Better Policies for Better Lives.31
Another relevant social factor is educational results. Foreign-born adults face greater obstacles in the Nordic labor markets compared to in the American one. However, it is possible that the children of immigrants would succeed in the Nordics by taking advantage of the publicly funded school systems in these countries. After all, the entire education system – from kindergarten to high school, university, and doctorate-level studies – is funded by the government in the Nordics. Surely this can create opportunities for upward mobility. The PISA (Program for International Student Assessment) global survey, often cited when comparing different school systems, measures the outcomes of children born of immigrant parents. Here, Finland, which is famous for its well-functioning school system, is ahead of the United States. However, the educational outcomes of the children of immigrants is better in the United States than in the other three Nordic countries.33
PISA SCORES OF THE CHILDREN OF IMMIGRANTS
COUNTRY
PISA SCORE
FINLAND
493
UNITED STATES
484
NORWAY
463
SWEDEN
454
DENMARK
446
Source: OECD Better Policies for Better Lives. The average PISA score in developed countries for all students is 500.
Studies from the Nordic countries have highlighted the challenges faced by children who themselves are immigrants, or who are native-born children of parents who have come as immigrants.34 One explanation is that the lack of opportunities for the parents to go from welfare dependency to work creates social poverty, which in turn affects the future opportunities of the children.35 The marginalized situation created by welfare traps in the Nordic systems can thus affect intergenerational mobility over the generations, also in school performance. Again we see that the American Dream of upward mobility, once we compare apples to apples by looking at immigrants, simply seems to be in favor of America rather than the Nordics. The American Dream continues to be more alive in the country after which it is named.
The American Dream continues to be more alive in the country after which it is named.
Those who criticize the lack of upward mobility in America do have an important point. We should be worried about the fact that many who are born in poor families remain there. The fight against inequality in the United States should be given high priority. In this regard, perhaps some lessons can be learned from the Nordic approach. For example, of course life chances are evened out by an education system where students are not inhibited by lack of parental income from going to college. However, as this chapter has shown, the welfare states make it difficult for outsiders to become self-sufficient. The social success for which the Nordic countries are famous is mainly limited to those who have Nordic cultural origins. This tells us that introducing a Nordic-style democratic socialism in the United States is not the way of making the American Dream come true. More taxes, more benefits, greater labor union control, and more labor legislation are likely to instead shut the door to upward mobility.
10
SWEDEN’S SELF-INFLICTED IMMIGRATION CRISIS
IF YOU FOLLOW AMERICAN MEDIA, perhaps you already know that Sweden is experiencing something of an immigration crisis. Toward the end of 2015, Benjamin Teitelbaum wrote an op-ed piece in the New York Times. For a newsp
aper that usually has a pro-immigration stand, the title of the article was quite astonishing: “Sweden’s Self-Inflicted Nightmare.” Teitelbaum explained why Sweden’s open immigration policies had turned into a quite unmanageable situation:
Sweden, a country of 9.6 million, lately has been absorbing 10,000 asylum seekers per week, and expects the total number coming into the country this year alone to reach 190,000 – a population greater than that of its fourth largest city. Since the intensification of the immigration crisis in September, municipalities have complained that they lack housing, teachers and classroom space, and doctors for the newcomers. The police have acknowledged that they’ve lost the ability to monitor the whereabouts of foreign nationals within the country. Migration agencies have signaled that they can no longer ensure that unaccompanied minors passing through their offices will be transferred into acceptable living conditions. And leaked emails have shown that government officials are panicking over how they will pay for associated costs.1
Similarly, the Washington Post published an article titled “Even Europe’s Humanitarian Superpower Is Turning Its Back on Refugees.” Authors Griff Witte and Anthony Faiola explained:
When the small, crumpled body of 3-year-old Alan Kurdi washed up on the Aegean coast Sept. 2, Europe’s humanitarian superpower sprang into action. Sweden’s prime minister headlined gala fundraisers, Swedish celebrities starred in telethons, and a country that prides itself on doing the right thing seemed to rally as one to embrace refugees fleeing for their lives. But after taking in more asylum seekers per capita than any other nation in Europe, Sweden’s welcome mat now lies in tatters. Overwhelmed by the human tide of 2015, the center-left government is deploying extraordinary new border controls and slashing benefits in an unmistakable signal to refugees contemplating the long trek to Sweden in the new year: Stay out.2
To understand what is happening in Sweden, we must turn to 2010, when the country took a turn toward free immigration. That year, a center-right government led by Sweden’s then moderate prime minister Fredrik Reinfeldt was reelected. However, during the election the anti-immigration Sweden Democrats gained enough votes to enter the Parliament. The government reacted by signing a deal with the opposition environmental party, which in effect opened up Sweden for nearly free immigration. Later, Reinfeldt explained that his ambition was to isolate Sweden Democrats from power by turning politics in the opposite direction following their rise to power.
Being against open borders [had] became synonymous with being a racist.
Some intellectuals warned that free immigration might not be the best idea. Although reasonable enough, the warnings did not prove popular. Progressive ideas about immigration came to dominate the debate in Sweden, and anybody who voiced criticism toward free immigration was branded as being narrow minded. Being against open borders became synonymous with being a racist. The prevailing attitude was that Sweden would benefit from large rates of inflows. My brother, Tino Sanandaji, was one of the few who voiced criticism against this idea. He was often alone in using facts and figures to argue that the idealistic view that open borders would benefit society was simply not true. To understand the Swedish immigration crisis, one must bear in mind a number of facts, which can seem quite astonishing for an international audience, and were seldom acknowledged during the years when favoring open borders was the only legitimate political view in the country.
First, the Swedish welfare state is very bad at integrating foreigners into its job market. In chapter 9 we saw that immigrants struggle to enter the job markets of Sweden and other Nordic countries. Generous welfare benefits, high taxes, and rigid labor market regulations are simply holding immigrants back. During later years Swedish politics has taken a sharp turn toward less extensive welfare policies. Taxes have been cut, welfare benefits reduced, and labor legislation relaxed. These changes, often called job-fare policies, have boosted job creation in Sweden. Amongst the Swedish right, the conviction grew that job-fare had made it possible to remove borders and open the country for foreign influx. But this is simply not the case. Sweden is a knowledge-intensive economy where higher education is often needed to find employment. Many simple jobs have been automated. Factories have invested in robots, and many stores are moving toward self-checkouts. Immigrants who don’t know Swedish and have limited education simply don’t fit in. Even after the job-fare reforms, many find themselves in a situation where welfare checks are as rewarding as pay slips.
Dagens Nyheter is a leading daily newspaper in Sweden, which is strongly pro-immigrant. However, even Dagens Nyheter at times acknowledges the massive difficulties that the Swedish welfare states have when it comes to integration. Through an in-depth study, the newspaper has followed the outcomes of all refugees granted asylum in Sweden in 2004. Journalists at Dagens Nyheter ask a simple question: how had the future shaped out for them ten years later? The reality was grim to say the least. The median income of the refugees was merely 11,100 Swedish kronor ($1,300) a month, much lower than the Swedish average of 23,700 kronor ($2,800). The family immigrants of refugees earned even less. Ten years after arriving in the country, their median income was as low as 4,500 kronor a month ($530). These very low incomes show that a large segment of all refugees, and likely the vast majority of family immigrants, were not working and instead relying on welfare support. Dagens Nyheter found that at least four out of ten refugees ten years after arrival were still supported by welfare. The newspaper acknowledged that this is likely a significant underestimation, since some municipalities refused to give the journalists the paperwork needed to match individuals to welfare receipts.3
That many immigrants are trapped in welfare dependency, or have low incomes, is a major concern in Sweden. The reason is simple: the country has a generous welfare state, a system that only works if the majority of the population have jobs through which large contributions are made to the tax agency. Perhaps more important, immigration has brought on major social upheaval to Sweden. Remember our quote in chapter 1 from Time magazine in 1976, which described Sweden as a “materialist paradise,” where “no slumps disfigure [the] cities”?4 Well, this isn’t the case anymore. It is certainly true that those parts of a city that have an overwhelming Swedish population are typically far from slums. But areas where many immigrants live are a different story altogether.
The Liberal Party in Sweden, which is part of the center-right alliance, used to track the number of socially marginalized city parts in the country.5 The definition is simple: less than 60 percent of adults are employed and the city part either has low participation in the democratic process (less than 70 percent had voted in the latest local election) or low school results (share of students who pass ninth grade is under 70 percent). In countries such as the United States, many neighborhoods, particularly those populated by poor minorities, fit this description. In 1990, only three city parts in Sweden did. The country really seemed to be a social democratic paradise. But as this book has shown in detail, the reason was that Sweden at the time was a homogenous country where people followed a uniquely successful culture. As immigrants came to Sweden, many of them failed to reach the same social success. In 2002 the number of marginalized city parts had mushroomed to 128. It is worth remembering that this was before the Swedish welfare state had been reduced in size. In 2004 the number had grown to 155, and in 2006, when the center-right parties took over power, there were 156 marginalized city parts.6
When the Liberal Party became part of the government, they suddenly stopped reporting about how marginalized city districts in Sweden had developed. The party argued that the workfare policies, which were aimed at reducing dependency on welfare handouts, had successfully combated poverty. Arguably, the policies were successful. But as immigration continued, the number of marginalized neighborhoods continued to grow. In 2014 Tino Sanandaji updated the figures that the Liberal Party themselves previously used, and published an updated version for the think tank the New Welfare Foundation. In panic, the Liberal
Party released their own updated version just one day after Tino’s report. The results were clear: for the latest available year, 2012, the number of socially marginalized city parts had grown even further, to 186.7
The rapid deterioration of immigrant neighborhoods is visible for all to see, and is quite astonishing. In early 2016 Swedish government television reported that the police in Sweden’s capital, Stockholm, were on their knees because young men who had migrated from the streets of Morocco and other North African countries were causing massive crime. According to the police, they frequently steal items, abuse security guards, and sexually assault women. When arrested, the young criminals are often released shortly thereafter because authorities lack information about their age, and most of the young men tell the police that they are underage. One police officer explained: “I would never let my children off at Central Station; no police would do that.”8 A recent change is that police carrying automatic weapons are patrolling Stockholm’s metro system, to prevent crime as well as the risk of Islamic terrorism.
Criminal shootouts, previously quite uncommon in peaceful Sweden, have become commonplace not only in Stockholm, but also in Sweden’s second-largest city, Gothenburg. It is no exaggeration to say that criminal gangs, often of immigrant origin, have wrested control of some parts of Gothenburg from the police. Together the two cities have a combined urban population of around 1.5 million. The capitals of Denmark, Norway, and Finland have a combined population of 3.3 million people, yet between 2010 and the first half of 2015, 298 people were wounded from shootouts in Stockholm and Gothenburg, compared to merely 70 in the three other Nordic capitals combined. So, in effect, the two Swedish cities had almost ten times as high gun wound rates as the other large Nordic cities.9 Denmark, Norway, and Finland have less of an issue with crime among immigrants simply because they have accepted fewer immigrants. Iceland has barely seen any immigration.
Debunking Utopia Page 13