Why Sweden, not Switzerland, should be America’s social welfare model

BY Barbara Bergmann  April 11, 2014 at 12:36 PM EDT
Instead of replacing public assistance programs with a guaranteed basic income, liberal economist Barbara Bergmann argues, the United States should beef up its social welfare system to be more like Switzerland, which has universal childcare. Photo by Flickr user Tiberio Frascari

Instead of replacing public assistance programs with a guaranteed basic income, liberal economist Barbara Bergmann argues, the United States should beef up its social welfare system to be more like Sweden, above, which has universal childcare. Photo by Flickr user Tiberio Frascari.

Editor’s Note: As the midterm elections approach, Republicans and Democrats have fallen into a familiar debate about the role of the federal government, particularly when it comes to addressing income inequality. The fight for a higher minimum wage, for example, is pitting President Obama against unenthused Republican leaders in Congress. But the mere idea of a different kind of federally mandated income adjustment — the guaranteed basic income — is cleaving the ideological spectrum in ways you might not expect.

In Switzerland, such a plan, if approved by the Swiss people, would give 30,000 Swiss Francs to each citizen. In the United States, one of the idea’s main supporters on the right, libertarian Charles Murray, envisions the government giving about $11,000 to each citizen over 21. But the guaranteed income can only work, Murray believes, if it replaces all other social welfare programs.

Liberal economist Barbara Bergmann, professor emerita at American University, makes the opposite argument. She opposes the basic income not because it will make the federal government too large, but rather because she thinks the government should be larger. Instead of paying out a fixed income to all citizens, she would prefer beefing up existing social welfare programs to tackle specific human needs.

The following extended conversation between Making Sen$e producer Diane Lincoln Estes and Bergmann has been edited and condensed for length and clarity. Watch Making Sen$e’s segment about the guaranteed basic income in Switzerland and its appeal in the U.S., in which Bergmann appears, below.

Simone Pathe, Making Sen$e Editor

Diane Lincoln Estes: What’s your argument against a guaranteed minimum income?

Barbara Bergmann: Well, the problem is that people have different needs and there are programs that attack those needs directly. Let’s talk about college. There are families that have children that need college, or that would benefit from college, and that’s very expensive. And if you give everybody a relatively small income, that doesn’t take care of that problem.

Obviously childcare is a problem for many families. We’ve partially dealt with the health care problem. So what makes sense is a series of government programs that take care of each of these problems. The model for doing that is the Swedish government. They have free college; they have free childcare; they have help with housing; they obviously give health insurance, or health care, to everyone, including mental health care. So those kinds of programs deal with people’s needs, whereas if you give everybody a minimum income, you’re still going to have a lot of people who are in trouble because they have special needs.

Sweden’s a country where, I think, when you do happiness surveys, they come out the happiest, and people don’t feel need there. It’s because the needs, the most important needs, are taken care of directly.

Diane Lincoln Estes: Why couldn’t people use their minimum income to address their own specific needs?

Barbara Bergmann: Well, because a minimum income isn’t enough to address, for example, college expenses for two or three children. It’s just not enough. All of these programs take a lot of money if they’re done correctly.

In every field, we have the same programs that they have in Sweden; it’s just that we’re not funding them very much. To fund them, we would need tax increases, and if you make those tax increases, and you make those expenditure increases, there isn’t enough left in the GDP to give people a minimum income. But people [wouldn’t need it] in the same way they would now [if these programs were stronger].

Diane Lincoln Estes: You’re saying the current system is inadequate?

Barbara Bergmann: Oh, absolutely. I’m coming at this from the more liberal point of view. I’m not against a guaranteed income because I think that it would make the government too big. I think government ought to be much bigger.

You know, a perfect example, by the way, is elementary and secondary education. It wouldn’t make any sense to say, okay, let’s stop giving that to people and let’s instead give them the money. That income would not make any sense.

You couldn’t give everybody enough money so that every family could afford to send three children to college. There isn’t that much money available. If you want to make college available, say, to those who need it and would benefit from it, you have to give [money] directly.

Diane Lincoln Estes: So you’re saying that we need to beef up social welfare programs rather than replace current programs with a guaranteed income?

Barbara Bergmann: We ought to be moving in the direction of the Swedes, of more goods and services from government to the people who need it. Now, you can say, well, that’s a crazy idea, given the current state of American politics, where tax increases are impossible to think about, but I believe that as time goes by, people will realize that filling those needs is the humane thing to do.

It’s increasingly important for the government to beef up other programs like childcare, too. We have a program, but there are huge waiting lists. Many people who are eligible can’t get it. So as single motherhood, for example, grows — 41 percent of babies these days are born to unmarried mothers — and it’s going to continue to grow because of the decline of marriage, what you need is bigger programs of that type to help those families directly.

There is a good chance government beefs up those social welfare programs. Maybe not in the immediate future, as our present situation suggests, but people will understand that social needs are changing, partly because of the decline of marriage and the increase in single parenthood. People are going to see that that kind of help from government is becoming more and more necessary.

Diane Lincoln Estes: Should we worry about the cost of doing this?

Barbara Bergmann: About 30 percent of our national income, our GDP, goes into government. And in Europe, in Sweden for example, it’s 60 percent, so there’s plenty of room for increasing taxes and putting more goods and services through government programs.

Diane Lincoln Estes: One critique of your position is that current government assistance programs are bureaucratic and it would be better to give people a minimum income and let them take care of themselves.

Barbara Bergmann: Well, it’s true that there are a lot of inefficiencies. It is annoying to deal with the government bureaucracy, no question. But the alternative is worse, and if you give out fairly decent sums to people, some of them are going to misspend. It makes much more sense to fill the needs of people than give them money that is not going to be used directly.

Diane Lincoln Estes: Are you concerned that, for instance, an alcoholic would spend his or her minimum income on booze?

Barbara Bergmann: Well, that is a problem if there are very large amounts of money given out. I think, in general, it would probably be some minimal amount.

Diane Lincoln Estes: And would it be a disincentive to work?

Barbara Bergmann: One of the problems with the minimum income is that it would probably result in women, more than men, leaving the labor force. And if you think about the increase in women’s stature, that has really been almost entirely due to the fact that more women are in the labor force. So I think that would be a relatively bad effect of universal cash payments.

If, as people leave the labor force, the amount the government takes in in taxes goes down, that makes problems for giving out the money. As productivity increases, we ought to be having both fewer people working and also people working less hours.

Diane Lincoln Estes: Some people have argued that the people who would leave the labor force are people who aren’t happy in their jobs and that a guaranteed income would liberate them from unfulfilling work. You don’t see it that way?

Barbara Bergmann: The same thing has been said about the Affordable Care Act, “Obamacare,” that people are leaving the labor force because they don’t have to stay in the labor force to get health insurance. And it’s a good thing if you’re liberating people from bad situations. But the main issue is not really that people would leave their jobs, but that giving everybody a minimum income would not really solve societal problems. It wouldn’t allow people at the bottom to send their kids to college or secure affordable housing.

Diane Lincoln Estes: Could a guaranteed minimum income ever become law in this country?

Barbara Bergmann: Well, it could. But people will see it’s easier to expand the programs we already have than to institute a minimum income. … Now, after we’ve taken care of these minimal needs [through government programs], then you can imagine that we could start a small [minimum income on top of that]. Again, because less is needed. But, you know, the increase in inequality of income suggests that we ought to be redistributing money from people who are at the very top to people lower down. It makes more sense to increase Social Security payments than just universally sloshing out the cash to everybody.