12.27.2006

comparison

James sent me this yesterday. It was perfect timing, as I had been combing through old wtmc posts. Pre-Canada, Paul Krugman was my number one source. I still read him regularly, but hardly ever post his columns anymore. Here's his piece from Christmas Day.
Helping the Poor, the British Way
By Paul Krugman

It's the season for charitable giving. And far too many Americans, particularly children, need that charity.

Scenes of a devastated New Orleans reminded us that many of our fellow citizens remain poor, four decades after L.B.J. declared war on poverty. But I'm not sure whether people understand how little progress we've made. In 1969, fewer than one in every seven American children lived below the poverty line. Last year, although the country was far wealthier, more than one in every six American children were poor.

And there's no excuse for our lack of progress. Just look at what the British government has accomplished over the last decade.

Although Tony Blair has been President Bush's obedient manservant when it comes to Iraq, Mr. Blair's domestic policies are nothing like Mr. Bush's. Where Mr. Bush has sought to privatize the social safety net, Mr. Blair's Labor government has defended and strengthened it. Where Mr. Bush and his allies accuse anyone who mentions income distribution of "class warfare," the Blair government has made a major effort to reverse the surge in inequality and poverty that took place during the Thatcher years.

And Britain's poverty rate, if measured American-style - that is, in terms of a fixed poverty line, not a moving target that rises as the nation grows richer - has been cut in half since Labor came to power in 1997.

Britain's war on poverty has been led by Gordon Brown, the chancellor of the exchequer and Mr. Blair's heir apparent. There's nothing exotic about his policies, many of which are inspired by American models. But in Britain, these policies are carried out with much more determination.

For example, Britain didn't have a minimum wage until 1999 - but at current exchange rates Britain's minimum wage rate is now about twice as high as ours. Britain's child benefit is more generous than America's child tax credit, and it's available to everyone, even those too poor to pay income taxes. Britain's tax credit for low-wage workers is similar to the U.S. earned-income tax credit, but substantially larger.

And don't forget that Britain's universal health care system ensures that no one has to fear going without medical care or being bankrupted by doctors' bills.

The Blair government hasn't achieved all its domestic goals. Income inequality has been stabilized but not substantially reduced: as in America, the richest 1 percent have pulled away from everyone else, though not to the same extent. The decline in child poverty, though impressive, has fallen short of the government's ambitious goals. And the government's policies don't seem to have helped a persistent underclass of the very poor.

But there's no denying that the Blair government has done a lot for Britain's have-nots. Modern Britain isn't paradise on earth, but the Blair government has ensured that substantially fewer people are living in economic hell. Providing a strong social safety net requires a higher overall rate of taxation than Americans are accustomed to, but Britain's tax burden hasn't undermined the economy's growth.

What are the lessons to be learned from across the pond?

First, government truly can be a force for good. Decades of propaganda have conditioned many Americans to assume that government is always incompetent - and the current administration has done its best to turn that into a self-fulfilling prophecy. But the Blair years have shown that a government that seriously tries to reduce poverty can achieve a lot.

Second, it really helps to have politicians who are serious about governing, rather than devoting themselves entirely to amassing power and rewarding cronies.

While researching this article, I was startled by the sheer rationality of British policy discussion, as compared with the cynical posturing that passes for policy discourse in George Bush's America. Instead of making grandiose promises that are quickly forgotten - like Mr. Bush's promise of "bold action" to confront poverty after Hurricane Katrina - British Labor politicians propose specific policies with well-defined goals. And when actual results fall short of those goals, they face the facts rather than trying to suppress them and sliming the critics.

The moral of my Christmas story is that fighting poverty isn't easy, but it can be done. Giving in to cynicism and accepting the persistence of widespread poverty even as the rich get ever richer is a choice that our politicians have made. And we should be ashamed of that choice.
My friends who closely follow UK news are mostly American ex-pats living in England, or former ex-pats now back in the States. I'd be very interested in hearing what they think of this.

20 comments:

dcbean said...

A higher minimum wage, generally more generous benefits, universal health care... sounds familiar

M@ said...

I'd be interested in knowing how our own social programs stack up against UK ones. I imagine our minimum wage is lower, for starters.

Maybe a comparison between the UK and Canada would wake some Canadians out of their complacency about our generally good social programs -- it's too easy to say "well, it's better than the USA, anyhow".

(If we compare favourably or equally with the UK, well, I'd be really happy to know that too.)

James said...

It's yet another example of how the surest way to promote something is to have the US declare war on it. The War on Alcohol (Prohibition) was a huge flop; the War on Poverty's gone nowhere; the War on Drugs is a dark joke; the War on Terror is a great recruiting tool for terrorists; etc. They're like The Mouse That Roared for abstract concepts.

James said...

(If we compare favourably or equally with the UK, well, I'd be really happy to know that too.)

I believe our health programs out-do the UK National Health system, but then the UK system's notoriously broken. For the rest, I'm not sure.

L-girl said...

I believe our health programs out-do the UK National Health system, but then the UK system's notoriously broken.

Is it as broken as we hear, though? After all, Americans constantly hear Canada's system is broken - and it's not. My American friends who live (or have lived) in the UK love the NHS.

That's not to say that Canada's health system doesn't surpass the UK's, but what are we basing that judgment on?

L-girl said...

it's too easy to say "well, it's better than the USA, anyhow".

This is what James and I were just emailing about, in relation to this Krugman column. :)

"Mulroney's bad, but at least he's not Reagan... we have poverty, but at least it's not as bad as it is in the US..."

I definitely understand this as a problem in Canada now. As long as it compares favourably with the country to the south, we can just keep on sleeping.

Lone said...

Sheeeeesh, can't they even spell "Labour" right when it's proper name, at least?

...Yep, that's me, always addressing the big issues. :)

L-girl said...

Lone? Is that who I think it is? New Blogger won't give you your full name?

I guess the New York Times figures it's a US story for US readers. You can be sure they'll get letters either way.

Klite said...

Sorry – I’m going to burst this bubble.
NHS - absolute sorry mess, my local health trust is looking at closure because Blair put in his unrealistic target and now NHS has a major deficit. The same NHS that made my father struggle for his health. Left my brother to die because he was deemed a person not worthy of it resources(had to go private)and has messed me about for several years. The so called safety net has failed for housing(you can't get all the rent), the unemployed are re categorized for exclusion. London is being drained by Blair of 6 billion a year to spend elsewhere, yet London has the three poorest boroughs in Europe. the min wage was a struggle to bring in and not at the rate proposed because Blair is at the beck and call of corporations. He is more Thatcher than the conservatives.
Brown is not trusted by anyone since his fiscal policies have turned out to be inaccurate and we are now paying the price for financial incompetence. He throws money at Scotland where he has his strongest support. I like many people supported Blair and Brown when they started but not anymore. Things may be better than the states, but not much better. By the way I am a Brit and my father is an American so we can see the comparison between the states and UK. I have experienced Canadian health care in the past as well. I know it’s not brilliant, but its still better than most. I think it’s the attitude that country has to its people that should count. Full and equal rights to all regardless of wealth

L-girl said...

Klite, I was hoping this post would bring you out. Thanks for this. Bubble-bursting is the best thing for it.

London is being drained by Blair of 6 billion a year to spend elsewhere, yet London has the three poorest boroughs in Europe.

Ah, as a former New Yorker, this sounds painfully familiar.

the min wage was a struggle to bring in and not at the rate proposed because Blair is at the beck and call of corporations. He is more Thatcher than the conservatives.

This, too. The comparisons between Clinton and Blair were always apt.

Things may be better than the states, but not much better.

I've heard that from Brits who are trying to emigrate to Canada.

I have experienced Canadian health care in the past as well. I know it's not brilliant, but its still better than most.

Here I must disagree. I think it's brilliant. There are problems, but it's an incredible system.

Thanks so much for coming out of lurkdom to share this. I was hoping you would.

James said...

Is it as broken as we hear, though? After all, Americans constantly hear Canada's system is broken - and it's not. My American friends who live (or have lived) in the UK love the NHS.

The difference there is, most of the complaints I hear about the Canadian system are from Americans who aren't actually familiar with it, but most of the complaints I hear about NHS are from Brits.

I can't talk about the NHS without thinking of The Goon Show, especially this bit:

[Ned Seagoon manages to escape from his bonds]
Grytpype-Thynne: Curse, Neddy! You got your hands free!
Ned: Yes! They didn't cost me a thing, thanks to the National Health!

L-girl said...

The difference there is, most of the complaints I hear about the Canadian system are from Americans who aren't actually familiar with it, but most of the complaints I hear about NHS are from Brits.

Huge difference there. And my friends who love the NHS are Americans experiencing universal health insurance for the first time.

James said...

Huge difference there. And my friends who love the NHS are Americans experiencing universal health insurance for the first time.

The US system has an uncanny ability to make just about any other system short of euthanasia seem amazing. So you have to be careful when you say, I think it's brilliant. There are problems, but it's an incredible system.

Though personally, I'm pretty happy with the Canadian system. It saved my SO's life (she had melanoma at age 19, in a family whose gross annual income was less than we now pay in taxes), and it cured me of a very painful condition (gall sludge, a rarer form of gall stones) without bankrupting me.

And as for waiting times: after her diagnosis, my SO was told "Go downstairs and check in, your surgery is tomorrow morning at 9:00". My own surgery was non-critical -- I could have put it off for a couple of years with nothing worse than a half-dozen sleepless nights to weather, but it was done within a month of the final diagnosis.

L-girl said...

The US system has an uncanny ability to make just about any other system short of euthanasia seem amazing.

Heh. :-)

So you have to be careful when you say, I think it's brilliant. There are problems, but it's an incredible system.

I'm basing my opinion on both personal experience and dozens of collected stories. I've been here 15 months, and have been listening to Canadians' health care stories for 2.5 years. And I love the Canadian health care system.

If I ever feel otherwise, I will be sure to let everyone know. ;-)

Lone said...

It's interesting to reflect now just how much resistance there was to Medicare when it first came in in Saskatchewan in the 60s. Doctors went on strike... they even let one child die, and tried to lay the blame at the government's doorstep. Doctors told people they wouldn't be able to provide them with decent care because the government would go cheap on everything. Insurance companies chimed in likewise. People feared the government would tell them who their doctor would be, and would spy on their medical records to see what they were up to. I'm amazed it was instituted at all.

But then came the obvious benefits. Doctors were getting paid without having to chase people down or sue them. Insurance companies were still making big money offering premium services not covered by the governments. And average Canadians began swapping stories about how they'd gotten a life-saving procedure that they couldn't have afforded (death, bankruptcy... death, bankruptcy...). There are still problems, and there are still people -- greedy, vicious, short-sighted profiteers and overstuffed "I'm-Alright-Jack-ers" -- who would have us dismantle it to the benefit of the few and the detriment of the many... but it's one of the few things that Canadians seem to hold in common and want to defend about the country.

Peace, order, good government... and Medicare. :D

Diamond Jim said...

Actually, "Labor" is correct in the unique insrance of reference to the Labor Party. But if I were voting there I wouldn't go right of the Lib Dems.

Lone said...

Actually, "Labor" is correct in the unique insrance of reference to the Labor Party.

It may well be for the "Labor Party"... whatever that is... but it's not for the Labour Party in the United Kingdom. For confirmation, please see their website to that effect.

http://www.labour.org.uk/home

Scott M. said...

Minimum wage.

As the discussion over the last planned hike of $0.25 to $8 has been re-re-reannounced for February, I have been thinking about this.

What is a good minimum wage?

I agree that $8/hr ($16k/yr) is too little. I also think $20/hr is too much. But where in between?

Stats Can publishes what they call the Low Income Cut-Off line (http://www.statcan.ca/english/research/75F0002MIE/75F0002MIE2006004.pdf). For 2005, here are the LICOs:

For a one-person family in a rural area: $14,303 before tax.
For a one-person family in a 500,000+ pop. Area: $20,778 before tax.
For a two-person family in a rural area: $17,807 before tax.
For a two-person family in a 500,000+ pop. Area: $25,867 before tax.

That's just a brief excerpt... It has a full chart. What should be used as the basis? A one-person family in a rural area ($7.25/hr)? A family of four in a 500,000+ pop. Area ($19.50/hr)? What's reasonable? I know for sure that a federally mandated minimum wage would be a *bad* idea for Canada due to the huge diversity of cost of living between the provinces.

Perhaps we should seriously consider a minimum wage based on the size of the community you are in... why make the bakery in Orono, ON pay $18/hr when $9/hr is more reasonable?

Should we be aiming for the poverty line (which is lower than LICO)? LICO? Higher?

CBC has a great story on poverty and our lack of a measurement of what that means here: http://www.cbc.ca/news/background/economy/poverty-line.html.

What I am sure about (in my mind) is: Once we find the "right" number, whatever that is, it should be indexed to inflation annually and automatically brought up for review every 5 years by a parlimentary committee. If we aren't there yet, the indexing should still take place and we should increase by a maximum of $0.50/hr every 6 months until we reach the current indexed wage amount. That is, if we determined it was $13/hr as of 2007, after 5 years we'd be at $13 but, assuming 3% inflation, we'd actually need to be at $15/hr. It would take three more years (total 8 years) to catch up to the now inflated rate of $16/hr, after which it would grow with inflation.

Though I think $13/hr in 2007 dollars may be too much unless we institute regional minimums.

Ideas? Thoughts?

L-girl said...

Hey Scott, I just now caught up with this comment. Would you like me to do a post on this? No one will see it here, but it might make a good discussion.

I'll link back to your comment.

Scott M. said...

If it interests you, go for it! It was just something I was mulling about for a while and the discussion here was pertinent.