The Truth About Bernie Sanders’ Nordic-Style Socialist Policies

Increasing coverage of the Bernie Sanders campaign and his democratic-socialist policies has brought national attention to Nordic-style government. With this attention have come countless articles, written in support of Sanders, praising the systems in countries like Norway, Sweden, Iceland, Finland, and Denmark. To Bernie Sanders’ supporters, the Nordic countries appear to be socialist Utopias with little crime, low unemployment, and happy populations. With such vividly painted pictures of health and wealth, Americans must ask themselves, first, whether appearances are deceiving and, second, whether Nordic-style policies, like those Bernie Sanders is suggesting, could work in the United States.

In examining Bernie Sanders-like proposed policies already in place in Scandinavia, Denmark is a good place to start. Denmark has the highest personal income tax of all the Nordic countries. According to a list of global income tax rates published by Forbes in 2015, a single Danish worker without children earning an average salary pays 38.9 percent in combined income tax and social security. In the United States, the same worker pays 22.7 percent. For a worker earning $50,000 annually, the difference equates to an $8,100 tax burden.

From a taxation standpoint, it appears Americans, as individuals, would suffer financially from an adoption of Nordic-style social democracy as proposed by Bernie Sanders. Will that appearance remain when one considers the average wage in Denmark compared to the average wage in the United States? According to the Organisation for Economic and Co-operation and Development (OECD), the average wage for 2014 in Denmark was equivalent to roughly $63,000, while the average wage in the United States for the same period was just over $57,000. Using the average wage and the tax rates in the above paragraph, the American would still take home $5,568 more than his or her Danish equivalent.

From these calculations, it appears Americans are in better financial situations than Danes in terms of take-home pay. However, one very important expense must be factored into the equation, and that factor is health care, which Bernie Sanders believes should be a single-payer system. According to 2013 healthcare expenditure statistics, also from the OECD, the Danish government spent nearly $4,500 per person on health care. In the United States, the government spent almost $4,200 per person. For only $300 more per person, all Danish workers have access to free national health care.

Meanwhile, in 2012, Americans paid, out of pocket, more than $400 billion on health care, according to health care statistics released by the Bureau of Economic Analysis and the Deloitte Center for Health Solutions. This amount equates to about 50 percent of the amount Americans spent on groceries that same year. While speaking of groceries, it is important to also consider the cost of living when considering the full economic impact of Bernie Sanders’ proposed policies.

According to the U.S. Department of State, the cost of living in Denmark is considerably higher than in the United States. Before taking a statistical look at the difference, it is important to note that most cost-of-living comparisons do not include what the Danes call value-added tax, more commonly referred to as VAT, or what Americans call sales and use tax. First, VAT in Denmark is set by the federal government, and it is 25 percent for the majority of products and services. In the United States, sales tax, set by state and local governments, ranges from zero percent to 9.5 percent.

Armed with this knowledge, one can then consider the difference in VAT or sales tax, along with the increased cost of living, which, in Denmark, is estimated to be 30 percent higher than the United States. According to NationMaster, Danes can expect to pay twice as much, including VAT, as Americans pay for a pair of name-brand athletic shoes and almost double for a dozen eggs. How can the Danes afford to pay so much for necessities and do Bernie Sanders’ proposals deal with a possible cost-of-living increase?

First, in Denmark, the average minimum wage is about $20/hour. Bernie Sanders is pushing for what he calls “a living wage,” which, according to his campaign’s website, is no less than $15/hour. A federal minimum wage increase to Bernie Sanders’ suggested hourly amount would, without a doubt, cause an increase in the cost of living. The help of an economic genius is not needed to determine that requiring employers to double the hourly wages of their lowest-paid employees will cause the cost of goods and services to increase. On the other side of the same issue, an increased minimum wage would allow Americans to pay those increased costs, but, as some Americans ask Bernie Sanders, what is the value of an increased minimum wage when the cost of living increases with it?

From the above comparisons, it is easy to see that determining the viability of Bernie Sanders’ social-democratic policies using examples of the institution of similar policies in the Nordic countries is not a simple task. For every Nordic example of one of Bernie Sanders’ policies, multiple variable exist that complicate a comparison. To examine every policy Bernie Sanders is proposing by comparing it with Nordic equivalents would be an undertaking of monumental proportions.

Such a comparison would require not only a thorough understanding of the details of Bernie Sanders’ plans but also of the economic, cultural, and political conditions in each of the Nordic countries. One would also need to consider the historical triggers than began a move toward social democracy, along with the amount of time it took for these countries to get to the points at which they began inspiring politicians like Bernie Sanders. Has America experienced similar triggers? Will Congress support Bernie Sanders or create legislative gridlock?

When one looks at the lack of support Obama has had from Congress for his social-democratic plans, such as Obamacare, it is easy to question whether Bernie Sanders would be able to garner the support he would need to pass legislation. Additionally, it is easy to wonder whether Sanders’ proposed legislation, like Obama’s Affordable Care Act, if passed, would be such a watered-down version as to be ineffective.

Another important factor when considering the implementation of Bernie Sanders’ social-democratic plans on a national level is whether the time has passed for social democracy? Currently, the world is watching a changing Europe, one that is moving toward nationalism in the wake of the Syrian refugee crisis. Few will be surprised if major political shifts occur over the next few years as European voters remove their support from social democracy, not because of economic factors, but because of social factors.

Will these socially motivated changes in Europe cause Americans to question Bernie Sanders’ plans, or do Americans feel that it is now time for Bernie Sanders style of government in the United States? Can Bernie Sanders offer Americans protection from the problems Europe is currently experiencing while also delivering the social-democratic policies that currently benefit the Nordic countries?

As the Democratic convention nears, the Bernie Sanders campaign continues to hold its own against the Clinton machine. Only time will tell whether Americans have enough faith in Bernie Sanders. If they do believe in Bernie Sanders and his policies, they will need to show the same faith in the candidates for the House of Representatives who are willing to support Bernie Sanders as president. Without the support of Congress, Bernie Sanders’ social-democratic plans will not stand a chance of becoming realities.

[Photo by Ricardo Arduengo/AP]