Income Equality in Nordic Countries: Myths, Facts, and Lessons

https://en.wikipedia.org/wiki/List_of_sovereign_states_by_we...

Meanwhile Southern Europe has reasonably high income inequality, but not much wealth inequality. Just kind of an underdiscussed piece, especially as many people like to issue catastrophic warnings about how wealth inequality destroys a society- then quickly change the subject when you note that the Nordics are more unequal than America

You can’t really compare dollar to krone the difference of a US salary to a Norwegian salary.

I’m not sure how to explain it for those who haven’t lived in the nordics, but you don't need a high paying income to live a good life.

I feel like there's a traditional job market in Denmark, and then a more recent, foreign-influenced market.

Most people work in the traditional market: there's a collective bargaining agreement, and you just get whatever you get. If they really like you, they find some peanuts within the budget that you can have, but you're not going to negotiate a 40% salary bump compared to similar profiles. You're on a fixed ladder that most of the people doing your title are on. Teachers, doctors, a fair few devs who work in traditional firms. Now and again, it hits the news that some union has demanded a bit more money, and there's some back and forth in the media. But nothing changes about the system, if you work one of these jobs, you are stuck with whatever the outcome of the negotiation is.

Now, Denmark is also a modern country with a lot of highly educated, English speaking people who know what people are doing in other countries.

There's a bunch of power traders in Jutland making a ton of money. There's a bunch of startups of the SV type. There's influencers selling toothpaste and makeup. There's guys trying to build nuclear power. There's private equity and consulting. These guys tend have a different ethos when it comes to salary.

> A key finding is that a more equal predistribution of earnings, rather than income redistribution, is the main reason for the lower income inequality in the Nordic countries compared to the U.S. and the U.K. While the direct effects of taxes and transfers contribute to the relatively low income inequality in the Nordic countries, the key factor is that the distribution of pre-tax market income, particularly labor earnings, is much more equal in the Nordics than in the U.S. and the U.K.

Yes and this can be good or bad if you work hard and your colleagues do not. I have worked in Norway since 2017. I like it, but I do think that there are other options. Americans like to complain about everything but, at least as far as it goes on hacker news, they have way more options for high salaries than the same workers in Norway do. Of course there are exceptions but having easier access to salaries that are above 100k USD and can grow substantially from 100k USD really changes things. But on the academic side, American PhD students are treated like shit and make shit, whereas Norwegian PhD students get 50-60k salary (totally liveable in Oslo), pension, free healthcare, and likely no teaching requirements, and a lot of academic freedom.

In Norway there also is a strong emphasis on generational wealth being transferred forward. This has made the housing market in Oslo somewhat impenetrable if you didn't have a parent helping you out on your first flat when you are 20.

I'm not saying Norway is bad, I think it's a great place to live if you can accept the winter and that you will never be Norwegian. Also, you should accept that you live in a different culture and should try to figure out how best you can emulate and integrate. This is true for any immigrant situation in my opinion though. It was your choice to move to this country, why show up and think you know better?

I like having a ski mountain right next to the city and I like the university culture as it is more flat like American-style than hierarchical like European-style (I am a research scientist). That being said I lived the last two years in The Netherlands and I think it is better overall in terms of cultural acceptance of outsiders and I think I feel like I understand and, importantly, agree with the ideas of what makes the Dutch the Dutch. Who knows. I don't have all the answers, just my two cents.

https://www.nber.org/papers/w33444

In Norway, if a restaurant abuses its staff, it's not just the staff that will strike or sympathetic customers who will organize a boycott. It's the plumbers who won't show up to fix the sink that breaks, the carpenters who won't show up to patch up a dented door jam or install a new shelf, and the shippers who won't drive ingredients out to the restaurant anymore.

In the US, that kind of coordinated cross-discipline striking is explicitly illegal (I'd have to go look up my history to confirm, but I believe that was related to the federal intervention to stop the rail strikes because it disrupted mail delivery).

It’s the hottest destination. Who would not swap six weeks paid vacation and universal healthcare for a $100,000 out-of-network ER bill and five days off a year?

1) It makes me wonder where the surplus goes. Invested back into the corporations, so that the people who run them have a large amount of power? That would be dystopian. Unless I'm making an incorrect assumption, like...

2) Is it only downward compression, or does it perhaps act both upwardly AND downward? So there's little profit unspoken for, and anyone participating in the labor market is receiving a roughly equal piece of the economic output (or, at least, within a relatively narrow band).

3) That would suggest something rather radical to the (neo)liberal mindset of there being no ceiling on what spoils of productivity one can claw to oneself: instead, an acknowledgment that we're all roughly equal humans giving up a roughly equal portion of life, time, energy, and freedom to labor, regardless of the prerequisites to be competent at that labor (or of the opportunities to exploit one's position).

4) As for implications for other countries, I wonder if there are any for those in which social, racial, and class hierarchies are deeply embedded. Can the kind of robust wage bargaining described emerge even without all of that rectified? Maybe it's what catalyzes that rectification?

1. opposition to income inequality per se

2. opposition to something other than income inequality, with inequality as a proxy for that thing

For (2), the person may either believe that income inequality necessarily results in the problem they're concerned about, or they may be confusing it with inequality per se.

For (1), one motivation is the classic envy of the have-nots for the haves, or a basic confusion about justice where it is misunderstood as entailing equality.

The first real problem is poverty. A double income upper middle class family with a $600k home is not equal to the millionaire or billionaire down the road in terms of income, but they are not suffering because of that inequality. Furthermore, the easiest form of equality is universal poverty, something socialist/communist regimes were quite good at arranging. Obviously, this kind of equality is undesirable.

A second problem is the influence money has in politics. This isn't the result of inequality per se, only the deranged relationship to money that people, including those in politics, have. The lust for money is the real culprit here, not money per se.

A third problem, related to the first, is one arising from ineffective markets. On the one hand, this might be the result of central planning or onerous regulation and other features of economies in collectivist societies. These can crush personal initiative and responsibility, and reduce the individual to an element of the collective, thus diminishing the dignity of the person. On the other hand, while free markets are quite good at allocating goods, they aren't infallible, and an idolatry of the market can encourage a participation in the market that flouts morality and regard for human dignity, resulting in a market that instead of contributing to the freedom and good of its participants, becomes a force for exploitation in which some enrich themselves through unjust practices. (I would also add a radical, totalizing libertarianism ideology that reduces the human person to an economic actor - full stop - and construes all human activity as economic, thus dehumanizing market participants.)

I would encourage people to read JPII's 1991 encyclical "Centesimus Annus" for a balanced summary critique of the dominant economic orders of the last century or so as a corrective for their errors.

[0] https://www.vatican.va/content/john-paul-ii/en/encyclicals/d...