PAYING FOR OTHERS

One of the themes of this blog is that the Danish welfare state is increasingly unaffordable. Another set of figures just released show - yet again - just how unaffordable.

It is one thing for people of working age to have to support pensioners. But people of working age also have to support other people of working age, who are, for one reason or another, not working and so not paying taxes. In Holland and Sweden, there are 5.6 people in work to support these non-workers; in the U.K. there are 5.0 and in Germany there are 4.8. However, in Denmark there are only 3.5.

What is worrying is not just the absolute difference, but the fact that the ratio is getting worse; as recently as 2008, there were 4.1 people between 15 and 64 supporting each person in that age group who were not working. The reforms of the past few years have all had the aim of increasing the number of people in the key 15-64 age group who are available for work; either by educating them better or encouraging them to become employed. The Government, and those affected, would say that those reforms have been major ones. The figures show that despite reforms, Denmark still has a long way to go if it wants to be able to finance its welfare state.

Walter Blotscher