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Danish flexicurity - Denmark a unique mix of welfare, economic growth - by Jeffry Stinsonlink
Danish flexicurity has become an economic eye catcher for Europe, where global competition is widely feared as eroding jobs and undermining the social safety net. Nations such as France, Italy and Germany struggle with lackluster economic growth, high unemployment and high taxes that often fall far short of paying for their welfare states and then there is Denmark. As most in Europe, the Danes have high taxes, which take an average of 50% of income. They have a big welfare state, which provides free public health care, education, child care and job training on top of generous unemployment benefits. Wages are high, with 87% of the workforce belonging to unions. Prices are high, too. Western government officials are trekking here dying to copy it. Even the low-tax, small-government, free-marketeers at the USA's libertarian Cato Institute say the Italians and the French could learn from the Danes.The "flex" part of flexicurity is a flexible labor market. Workers can be fired with little notice. Roughly 800,000 Danes, or about 30% of the labor force, switch jobs each year, government statistics show. Only 10,000 of the turnover is attributed to layoffs. Most move on to what they see as better jobs.At the same time, Denmark embraces free trade, competition and little government ownership or involvement in business.
Denmark has the least amount of government red tape and the shortest start-up time for new businesses in the EU, according to measurements by the Organisation for Economic Cooperation and Development, a Paris-based confederation of the 30 largest industrial democracies that is a watchdog against economic and governmental corruption. Denmark keeps business taxes competitive, about 28%, or comparable to most in Europe. Personal income taxes and a high sales, or value-added tax of 24%, pay for the unemployment benefits, job retraining, child care and education.
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