The facts about the European welfare state that the U.S. press ignores

...In 1995, in the midst of the recent American "welfare reform," U.S...

...Diverse state coalitions of advocates are working to enact paid family leave, while others are focusing on extending public investments in early childhood education and care...

...Second, policy reforms affected only a subset of programs, leaving entire program areas— for example, the core programs of family policy—virtually untouched...

...In one oftenquoted study, two American researchers, Bruce Western and Katherine Beckett, show that the far higher rates of incarceration in the United States explain a substantial share of the difference between male unemployment in the United States and the European average...

...Anne Gauthier, an expert in comparative family policy, found that across a large group of European countries on average, policy makers slightly raised family allowance benefit levels between 1975 and 1990...

...As the story goes, generous social welfare benefits, in conjunction with excessive labor market regulation, caused Europe's unemployment woes...

...Injuries but no Fatalities What has taken place, exactly...

...Between 1985 and 1995, a handful of European welfare states initiated major new parental leave programs, and at least eleven more increased the duration of existing leave policies and/or added new rights...

...The third leg of the popular argument, that the European welfare state is being dismantled, is largely wrong...

...Unfortunately, comparable spending data for after 1995 are not yet available...

...At the same time, an array of social policy initiatives— some of them squarely in the European tradition—are gaining momentum in several of the fifty states...

...Third, while many reforms have resulted in reductions in benefits and/or coverage, or will in the future, most rule changes leave the fundamental program structures intact...

...Although European jobless rates fell steadily throughout the 1990s, the average unemployment figure for the fifteen European Union (EU) countries, now 8 percent, is still about double the U.S...

...and, in a substantial number of countries, social expenditures continued to grow at a rapid rate...

...She is collaborating with Marcia Meyers, of Columbia University, on a book about family policy lessons from Europe...

...Declining birthrates reduced social welfare revenues, while increasing longevity increased expenditures...

...system of strippeddown social policy and minimalist labor protection...

...Although it's not clear exactly what drives this anti-Europeansocial-policy drumbeat, Ackerman concluded that increasingly cozy relations between major media companies and American big business are a major culprit...

...Yes, it does, especially now...

...Many European economists have pointed to the increased demand for technical skills across industries and occupations— which has rendered many less-skilled workers unemployable—while others have considered the effects of growing competition from lowcost producers in Eastern Europe and Southeast Asia...

...Because GDP expansion outpaced population growth everywhere during these years, total social spending per capita showed even more growth...

...But what role, if any, Europe's social protection policies have played in pushing up unemployment is not clear...

...in some years, our sky-high imprisonment rates explain the entire difference...

...This process has involved cuts in benefit levels, tightening of eligibility criteria and shortening of benefit periods...

...18 n DISSENT / Summer 2001...

...Several European and U.S...

...In fact, a flurry of legislative activity is already underway...

...In addition, a 1995 EU Directive on Parental Leave and Leave for Family Reasons called for further policy development in the member states...

...Parents' rising demands for more government help with early childhood care and education are bolstered by renewed concerns that U.S...

...With respect to pensions for the elderly, several European countries have either lengthened the average employment period (by increasing contribution requirements and/or DISSENT / Summer 2001 n 15 POLITICS ABROAD raising the retirement age) and/or reduced their pension benefit levels (in some cases, by introducing means- or income-testing...

...At the same time, forty-two states now have some form of public preschool services, and expansion is possible in many of them...

...Clearly, George W. Bush's administration is unlikely to foster any federal expansion of American social policy...

...Thus, they offer valuable lessons for the design of benefits, eligibility rules, delivery mechanisms, and financing...

...Partly as a result of these public commitments, now seen all across Europe, the enrollment of European children in public care has risen steadily in recent years and continues to rise...

...These pressures have in fact pushed both welfare state restructuring and labor market deregulation onto political and policy agendas across Europe...

...in recent weeks has been in the center of what may well be the last great Continental convulsion in this century, the dismantling of the European welfare state...

...Niels Ploug, another longtime scholar of European social policy, observed last year that within the Nordic countries, which have the most developed welfare states, "cutbacks have been introduced or retrenchment has taken place...

...In a final arena of family policy—public child care, including the famed European preschools— we again find a pattern of expansion over the last two decades...

...First, the emphasis on moving single mothers from "welfare to work" raised many public officials' awareness of the need for child care, and not just for poor families...

...Social welfare spending in the United States lagged behind that of all fourteen European countries in 1980 and again in 1995...

...In some countries, only the most marginal rule changes were passed...

...In 1995, Business Week announced that "France...

...This provides some counter-evidence to the claim that European social welfare investment levels are shifting toward U.S...

...In Europe, these same programs are well tested and politically popular...

...Increases were seen in twelve of the fourteen countries and, in three Nordic countries and fast-growing Ireland, per child spending on family policy grew by 100 percent...

...Rebecca Blank and Richard Freeman recently concluded that there is little empirical evidence for large trade-offs between social protection and labor market flexibility...

...ALTHOUGH THE reports of high and persistent unemployment in Europe may be exaggerated in the U.S...

...Widespread misperceptions in the United States about the collapse of European social policy not only deter advocates from drawing useful lessons from abroad, they create barriers when advocates try to make their case to policy makers...

...Have we actually seen "the last great Continental convulsion in this century, the dismantling of the European welfare state...

...Despite the widespread belief within the United States that social protection has clogged Europe's economic arteries—the "Eurosclerosis" theory—recent research casts doubt on any clear cause-andeffect connection...

...together they allow us to see changes that are largely beyond the control of the state (for example, those that are driven by changing numbers of beneficiaries), as well as social policy reforms that are put in place intentionally (such as changes in the benefit level...

...Why family policy developments now, in these conservative times...

...Conservative governments increased ideological pressure for welfare state cutbacks...

...Only in two of the Benelux countries— Netherlands and Luxembourg—did the social spending share actually decrease, by very small margins in both cases...

...After 1980 and throughout the 1990s, many European coun16 n DISSENT / Summer 2001 POLITICS ABROAD tries introduced or extended national laws that guarantee access to child care...

...dollars...

...One can examine change within the welfare state by analyzing trends in public social spending or by reviewing policy reforms (that is, changes in policy rules...

...While European policy makers held family allowances steady throughout the economic hard times, provisions for paid parental leave—offered to both mothers and fathers— were expanded in several countries, in some cases, substantially...

...The subtext of the tale is clear: the United States should take no social policy lessons from Europe...

...While unemployment remains as high as 16 percent in Spain, some of the more developed welfare states have much lower rates—for example, just over 3 percent in the Netherlands, and in Sweden, 5.6 percent and falling...

...in no country, however, did per capita social welfare investments actually fall during the 1980s and up to 1995...

...spending (relative to GDP) constituted 60 percent of the European average...

...But have the European welfare states been visited by the Angel of Death...

...In a word, no...

...Nobel laureate Robert Solow and other economists have argued, for example, that persistently high real interest rates run by Europe's central bankers have kept millions of people out of work...

...For a full report of this study, see Janet C. Gornick and Marcia K. Meyers, "Lesson-Drawing in Family Policy: Media Reports and Empirical Evidence about European Developments," Journal of Comparative Policy Analysis: Research and Practice (vol 3:1, Spring 2001...

...investment strategist Edward Yardeni (known as the "Wall Street Wizard") announced in Business Week that Newt Gingrich was the "Angel of Death for the social welfare state—not only in the U.S., but worldwide...

...The study found that between 1980 and 1995, total social expenditures as a share of gross domestic product (GDP) increased, on average, by more than 20 percent.' Average social spending rose from just over 22 percent of GDP in 1980 to 27 percent by the middle 1990s...

...levels...

...Family policy—where European policy offerings are legendary—provides the clearest example...

...Second, high levels of social protection—social welfare benefits combined with employment regulation—have caused the high and persistent unemployment rates...

...Without a doubt, social welfare systems throughout Europe have faced real political and economic pressures in recent decades...

...media, it's clearly true that relative demand for labor in the United States has exceeded that in most European countries throughout the last two decades...

...Within that pattern of overall growth, rates of increase varied markedly across these countries, from a high of over 100 percent in Norway to a low of just over 10 percent in the Netherlands...

...However, that 8 percent average conceals considerable variation across the countries of Europe...

...Relative to the 1960s and 1970s, rates of increase declined in some countries after 1980...

...in recent years...

...The core components of European family policy include cash benefits for families (most European countries provide universal family allowances), paid family leave benefits (maternity pay for new mothers and longer term parental leave for both parents), and extensive publicly financed child care (including nursery care for children under three and preschool for children three and older...

...to the contrary, policy makers across Europe are fast adopting the U.S...

...It's crucial that everyone concerned DISSENT / Summer 2001 n 17 POLITICS ABROAD with American social policy development understand that, overall, our European neighbors have chosen to nurture and sustain a wide array of social policies, even through the hardest of economic times...

...Family Policy: Protected and Expanding Since 1980, some European social programs have not only escaped the knife, they have grown steadily...

...For example, legislatures in Connecticut, Oklahoma, New Jersey, and New York are considering widening eligibility for public preschool slots...

...The 'sick man of Europe' is in truth a straw man of American capitalism," he writes, "a cautionary fairy tale as widely believed by our journalists as it is beloved by the businessmen who sign their checks...

...For member countries of the European Union and countries anticipating membership, EU requirements added further pressure to reduce public spending in order to keep deficits within stipulated limits...

...While several European countries have loosened labor market regulations, a growing body of academic research challenges the parallel claim that monumen14 n DISSENT / Summer 2001 POLITICS ABROAD tal rollbacks in social policy have been enacted...

...DISSENT / Summer 2001 n 13 POLITICS ABROAD The first part of the argument is the most accurate...

...Similarly, a recent YMCA survey revealed that 75 percent of adults believe that child care is "a greater problem" than it was ten years ago, citing concerns about lack of availability, poor quality, and high cost...

...the best attitude toward the trade-off hypothesis, they argue, is one of "open-minded skepticism...

...Disability program changes—as seen, for example, in the Netherlands and Sweden—typically tightened eligibility and placed new restrictions on the level or duration of benefits for new applicants...

...Although there were some cuts in the early-middle 1990s—for example, in Sweden—reductions have since been restored, in part because of widespread public support...

...Assorted international reports of family policy reforms from 1980 through 2000 add further support to our findings of resilience and growth...

...On average, social spending per capita across Europe grew by a remarkable 50 percent between 1980 and 1995—from $3,100 in 1980 to over $4,700 (both in 1990 U.S...

...A major system shift occurred only in the United Kingdom, and there were no social policy upheavals approaching the magnitude of the 1996 repeal of "welfare" in the United States...

...The media accounts usually unfold in three parts...

...State-level policy activists insist that the stall in Washington won't dampen these campaigns...

...JANET C. GORNICK teaches public policy in the Political Science Department at Baruch College, City University of New York...

...What is the truth in these claims...

...Paul Pierson, an American political scientist who's tracked European welfare state trends for over a decade, agrees: "Moderate retrenchment and cost containment are a significant part of an ongoing process of welfare state restructuring, but dismantlement has not taken place...

...A number of European countries have also reformed their disability benefit rules...

...Policy Advocates Need to Know Does it matter if policy makers and activists working toward social policy developments in the United States get the European story right...

...The fourteen countries in this study include Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Sweden, Switzerland, and the United Kingdom...

...In 1995, for example, the Danish central government made a commitment to guarantee each child a publicly funded child care slot, starting at age one and lasting until the start of primary school...

...rate...

...Although comparable European spending data are not yet available for the years after 1995, we've been able to follow policy reforms (changes in social welfare law) up through the year 2000...

...Finally, the 1996 devolution of large chunks of social policy from the national government to the states strengthened local social policy advocacy networks, just in time for state-based policy campaigns that, in the wake of the 2000 election, now seem the only option...

...In addition, many advocates say that the recent "welfare reform," for all the damage it promises, has had some beneficial side effects that are opening the door for family policy development in the states...

...A recent survey conducted for the think tank Zero To Three found, for example, that 85 percent of adults in the United States support expanding "disability or unemployment insurance to help families afford to take off from work to care for a newborn, a newly adopted child, or a seriously ill family member...

...First, we're told, Europe has been wracked by high unemployment since the late 1970s, much worse than we've seen in the United States...

...Not surprisingly, citizen demands for work/family programs are high and rising...

...The next year, similar guarantees were enacted in Sweden and Finland...

...In 1983, Business Week declared that the "great edifice of the European welfare state is beginning to totter like an inverted pyramid...

...Second, the demise of "welfare" and its replacement by state work-based programs, has improved social policy's public image, creating some room for developments that would benefit families throughout the economic spectrum...

...Vivid reports of the collapsed welfare state emerged during the early Reagan-Bush years and continued through the Clinton era...

...indeed, they justify the U.S...

...Economic internationalization, both within and outside Europe, intensified commercial competition, putting economic pressure on both governments and businesses to reduce labor costs by cutting the social wage and slashing labor protection...

...As a result, many new family leave benefits and rights were enacted between 1996 and 2000...

...Expenditure by itself can't tell us about reforms that won't be felt until the distant future (an increase in the retirement age, for example), and looking only at rule changes makes it difficult to discern the magnitude of the reforms...

...Finally, in response to labor market failures, the once generous welfare states of Europe have overturned fundamental elements of social welfare policy...

...These stories about Europe's stressed-out welfare state appear alongside hundreds more that describe the damage that social programs and labor protections have caused the European economies...

...While maintaining the basic benefit structure, some European countries have shortened the duration of unemployment benefits and/or reduced replacement rates, mostly in an effort to strengthen workers' "incentives...

...A recent study of fourteen European welfare states, based on these OECD numbers, finds that, despite demographic and fiscal pressures in the 1980s and 1990s, most countries showed an overall pattern of resilience, and some showed marked growth...

...model of barebones social protection...

...OECD data reveal that in the same fourteen European countries, average family policy spending (per child) increased by more than 50 percent from 1980 to 1995...

...Unemployment challenged the overall economic logic of social protection, and rising numbers of claimants squeezed state financing capacities...

...Unpacking the Story Let's unravel these tales of economic disaster and welfare state retrenchment and sort out fact from fiction...

...The Organization for Economic Cooperation and Development (OECD) provides crossnational data on social expenditure trends from 1980 to 1995...

...Proponents of the Eurosclerosis theory frequently fail to take account of other crucial factors...

...Taken together, the expenditure trends and the rule changes challenge the popular accounts of social welfare dismantling...

...In three countries— Finland, Norway, and Switzerland—the percentage of GDP devoted to social welfare increased by 45 percent or more during these years...

...Let's look at both types of evidence...

...children are lagging internationally in school achievement...

...Unemployment rates across Europe have exceeded those reported in the U.S...

...Having recognized the damage done by overly generous social protection, European policy makers have opted for widespread welfare state retrenchment and labor market deregulation...

...At the same time, the relatively low rates recorded in the United States incorporate some systematic biases that lead to undercounting...

...Gosta Esping-Andersen, Europe's leading scholar of the welfare state, recently noted that "popular perceptions notwithstanding, the degree of welfare state roll-back, let alone significant change, has so far been modest...

...Ideally, we consider both spending trends and policy reforms...

...In 1993, the San Francisco Chronicle reported that "nowhere is the dismantling of the social security net more drastic than in Sweden, [although] similar retreats from the expansive days of social democracy are under way in virtually every European Community nation...

...In 1980, the United States spent 13.4 percent of GDP on social welfare, rising to 15.8 percent in 1995...

...Although some countries saw slowdowns in spending growth, and some significant rule changes have indeed been enacted, it is clearly wrong to interpret these changes as the end, or even the beginning of the end, of the welfare state...

...First, cuts were not adopted in all the major European welfare states...

...Total social expenditures include direct government spending on thirteen social welfare programs: (1) old-age cash benefits, (2) disability cash benefits, (3) occupational injury and disease benefits, (4) sickness benefits, (5) services for the elderly and disabled, (6) survivors benefits, (7) family cash benefits, (8) family services, (9) active labor market programs, (10) unemployment benefits, (11) health benefits, (12) housing benefits, and (13) assistance for "contingencies" (such as benefits for immigrants...

...American family policy researchers Sheila Kamerman and Alfred Kahn found that, between 1990 and 1996, the nominal value of family benefits rose in most of Western Europe...

...However,] in general, these cuts have not been radical—some of them can even be seen as symbolic...

...Policies rolling back social welfare programs were indeed implemented in several European welfare states during those years in three program areas: old-age pensions, unemployment benefits, and disability benefits...

...On the paid-family-leave front, programs that would extend either temporary disability insurance or unemployment benefits to workers with care-giving needs are on the agenda in at least nineteen states, including Florida, New Jersey, New York, Massachusetts, and Nebraska...

...THE POTENTIAL for some crucial social policy development in the United States—particularly in family policy— means that, now more than ever, U.S...

...What is clear is that these stories gratify those who oppose public solutions to market-generated risks and inequalities...

...One reason is that the employment of American mothers has risen dramatically in recent years, and parents' needs for public support have grown in tandem...

...policy makers and advocates alike would do well to look to Europe...

...At both points in time, U.S...

...2 Although the rate of increase in social spending (as a share of GDP) fell in most countries after 1980, the trend was still one of growth nearly everywhere...

...And after 1990...

...Seth Ackerman, a media analyst with Fairness & Accuracy in Reporting, recently reported in Harper's that American news outlets have published six hundred articles since the mid-1980s on the unhealthy effects of European social protection—dubbed "Eurosclerosis" by Time magazine...

...Are the policy reforms consistent with the conclusions based on spending trends—that is, that welfare state commitments remain strong...

...economists find that many welfare state and labor market features that are frequently viewed as hazardous to employment (high payroll taxes, high overall taxes, and high benefit replacement rates) are no less common in highemployment than in low-employment countries...

...First of all, the family allowances—central to the European model—have held steady in most countries and grown modestly in others...