The high tax rates, including forty-nine percent on income, twenty-three percent on sales, and rates that make liquor prohibitively expensive—a forty-dollar bottle of Linie Norwegian aquavit in Trondheim goes for $19.95 at East Lake Liquor in Minneapolis—don’t seem to inspire the rancor that they do in the United States. Even though some Norwegians shop in the U.S. because of the low taxes, many people I’ve met are proud of their welfare system, though Norwegian modesty keeps them from bragging. “It’s the system we have chosen,” Sissel, a teacher in Trondheim, told me matter-of-factly, “and I’m happy to pay the taxes for it.”
Happy for taxes, for welfare? Happy to have their hard-earned dollars going to support others who may not work as hard as they do? The number of Norwegians that hold this view is large enough that Norway has refused to join the European Union and use its common currency. Even though the E.U. is a federation and it’s questionable whether membership would hurt Norway, citizens do not want to give up this comprehensive welfare system that helps all Norwegians. After all, the country’s social democracy provides the most liberal welfare system in Europe, though it’s based on the same principles as systems in Germany, Britain, and even Norway’s own Scandinavian neighbors. A middle-aged man from the town of Orkanger put it succinctly: “In Norway, all of our political parties are to the left of America’s Democrats.”
Once in Trondheim—Norway’s “City of Kings,” perched dramatically on a peninsula of a fjord seven hours north of Oslo—we went to the trygdekontor (insurance office) so that Katy could register for health care to cover the baby’s birth. A clerk perused our documents somberly and said she didn’t think we qualified. We panicked, of course. “What? How can that be?” we protested. “We filled out all the forms and we were told we’d be covered by the Norwegian insurance system.”
“Oh, the government shall pay for the birth,” she assured us mildly. “I just don’t know if you are eligible for maternity benefit. I shall control the situation and call you.”
Later, I asked our Norwegian friend Rachel what the woman at the trygdekontor meant by “maternity benefit.” “Of course Katy won’t get maternity leave because she hasn’t been working here,” Rachel explained, “but she should get the child credit of several thousand dollars. It’s not really your money, though—it belongs to the baby.”
I couldn’t believe we’d actually be paid to have a baby in Norway, so I scoured the literature from the insurance office. If Katy had been working for at least six months in Norway, she would receive forty-two weeks off full-time paid leave from work or fifty-two weeks at eighty percent of her salary, paid by the government. Four of these weeks, however, are reserved for the child’s father (who must live with the mother and child), and if he doesn’t use the time, both parents lose that month’s pay—a non-transferable inducement to ensure that dad stays home. The forty-two or fifty-two weeks can also be divvied up between the parents; meanwhile, the mother also gets her earned vacation time from the maternity leave. A mother can take the next year off without pay, but still hold on to her job. An extra three to twelve weeks can be taken off work before the due date. Self-employed people, too, can get one hundred percent of their pay for forty-two weeks (based on their previous three years’ earnings), and even adoption gets you thirty-nine weeks of full pay or forty-nine weeks at eighty percent. If a mother hasn’t been working in Norway—as was our case—she still receives a lump sum of 33,584 Norwegian kroner (about $5,000) for the baby.
Norway’s Velferdsstaten (welfare state) was established in earnest following the brutal German occupation during World War II. While numerous bold Norwegians lost their lives in risky sabotage missions to resist the Nazis, a strong sense of camaraderie and national identity was forged. Arbeiderpartiet (the Labor Party), which led the country until 1965, decided that the government should take responsibility for the public welfare, striving for the highest possible level of equality and a just distribution of wealth. Norway’s King Haakon set a good example by serving fish balls, a common peasant food, to foreign dignitaries at his castle. Led by Prime Minister Einar Gerhardsen, the Labor Party helped establish laws to ensure that everyone had the right to a reasonable house, food on the table, education, health care, child car
e, a livable pension, and so on.
I told Rachel I felt guilty about receiving this benefit. “Why should you feel ‘guilty’ about receiving money from the government?” she replied. “It’s our money, after all; even you pay taxes here now. Everyone receives the child credit, even the King, and Prince Haakon will when his wife Mette-Marit has their child.” No wonder I’ve overheard expatriates talk about having “bargain babies” in Norway.
Norway’s policies regarding wealth redistribution and equality extend to the workplace, where the salary gap between entry-level workers and CEOs doesn’t begin to approach the outrageous levels reached by many U.S. companies. For example, oil executives earn up to 300,000 or 400,000 Norwegian kroner (about $43,000 to $57,000), while hotel maids average about 200,000 kroner ($28,500). “Everyone’s income is public knowledge, and now is even listed on the Internet,” said Arild, an engineer for a small oil exploration business. People are probably very respectful of each other’s privacy, though, right? “No way,” he replied. “The day after they list income, everyone comes to work and they are all very angry that so-and-so makes a little bit more. Often, it’s not even a dollar more, but it causes many arguments.”
Sissel, our teacher friend, added, “If you see that your neighbor makes a million kroner, and the responsibilities in his job description don’t really fit what he’s being paid for, you can report them. This rarely happens, though. But the idea of it keeps people honest.”
And does it keep salaries more equitable? Arild confirmed that it does: “People figure that a regular construction worker who requires no education can go to work right away and get a paycheck. Compare that to a higher-paid manager or engineer who gets years of education—and debt—and their lifetime earnings are about the same.” Therefore, years of preparation for a job ultimately don’t result in that much more money.
Although Norwegians are encouraged to work until sixty-seven (otherwise they don’t reap full retirement benefits), their workdays are short. When we stopped at the bank in downtown Trondheim to open an account, our banker Arne looked at his watch and said, “Now it is three-fifteen and banks are closed.” Closed? “Yes, the bank is open until three o’clock in summer. We work seven and one half hours in winter, with one half hour for lunch. In summer, we work seven hours with a lunch break.” We realized we were holding him overtime. “Oh, it’s OK. You know in Norway, we work thirty-five hours a week. In the old days, I remember people worked forty hours a week, but it’s too much. You have no life then. I want to see my family sometimes. Luckily, we have five weeks of vacation a year so we can enjoy life.” Obviously, all Norwegians take “banker’s hours” to heart.