In Europe, Social Safety Net Softens Slump

Aid for unemployment, health care and further education

Eppelheim, Germany.

[W]ith the auto industry here hit especially hard — this is the home of Mercedes-Benz — things are tougher than they have been in decades. Unemployment is up 70 percent in the past year and many employees have been forced to cut down their hours....

Misery below the surface, perhaps? Not at the bustling Fuerstenberger home just outside Heidelberg, where little has changed for the family's four children despite neither parent currently working. "If we were in Detroit, we could worry every minute," said [American] Sarah Fuerstenberger, 37. "But here, we're safe because of the system."

While economic forecasts are just as dire on this continent as in the United States, Germany's citizens — and, indeed, most across western Europe — can count on a broad government safety net that includes generous unemployment checks, universal healthcare and inexpensive university education to tide them over. "The German government is really good about taking care of people; we know we won't be starving one way or another," she added....

Universal health care, education

"We don't pay anything for any of (our) medicines, for doctor's visits, nothing," Sarah said, adding that she worried about her sister in Detroit, who had had several periods without health insurance.

"People shouldn't become poor if they need health care," said Joe Kutzin, a World Health Organization adviser, adding that a 2005 study published in the journal Health Affairs found that medical causes were at the root of about half of personal bankruptcy cases in the United States in 2001. It's ironic, he said, given that Americans spend more per capita on healthcare than anyone else in the world....

As a profession, Susanne [a doctor] said that medicine was not as well paid in Germany as in the United States. She pointed out, however, that Europe's doctors do not have six-figure student loans to pay off. When the 35-year-old studied medicine here, all students paid the equivalent of just 100 euros ($131) a semester. They now pay up to 500 euros ($657).

"Education must be equal for everyone regardless of the size of their wallet," she said. "It's one of our basic civil rights in the [German] constitution."

Paying for privileges

While Europe's social safety net is softening the slump, it does of course have to be paid for.

According to the OECD, the total tax revenue as a percentage of GDP is 28.3 percent in the United States, compared with 36.2 percent in Germany. The cost can be seen in workers' paystubs. "For example," said economic analyst Brenke, "a single worker with an average salary — about 16 euros ($21.31) per hour in fulltime work — pays about 52 percent for taxes and the social security system." This compares to an average of 30 percent in the United States.

With her family paying roughly that amount, Sarah said, "sometimes I think it's not worth it when I look at what ends up in my bank account, but in times like these, I appreciate it."

--"In Europe, Social Safety Net Softens the Slump," by Jennifer Carlile, msnbc.com (5.7.09)

Don't you think that many of America's unemployed or underemployed workers, professionals, and young and middle managers, might now feel the same way? How about those students and their families who can no longer afford the cost of finishing college or professional education? How about those daily being bankrupted by health care costs--or afraid to seek health care at all without insurance coverage? Might they too be more likely to think higher taxes were now worth it for that kind of social safety net?

http://www.msnbc.msn.com/id/30363790/