I wish we (the Netherlands) had a system more similar to the Scandinavian countries. We have social security, but it has gaps and holes all over the place and once you get stuck in one of those gaps there's virtually no way out. Notably, having been an entrepreneur puts you in one of those gaps.
I'm a (sufficiently) rich kid though, so no biggie.
A more pessimistic view is that the government does everything it it's power to pull the social security net out under everyone, but the current the legislation makes it much easier to do for entrepreneurs.
Do you mind expanding? Is this something to do with having been ‘unemployed’ while working on your company?
Note that many entrepreneurs agree with this policy: they rather pay as little tax/premium/whatever and just sort things out themselves. The thing that bothers me is that I can't even choose to pay the same state unemployment premium as my employees are forced to pay.
But when you're not entitled to unemployment money (also happens if you've never had a job more than x months in a row), you're not entitled to all the extra benefits you get when trying to get out of unemployment. Eg you don't get day care support for kids because you're home all day, right. No matter that you're trying to reeducate yourself to get a new job - you're not costing the state any money so it's your problem. However if you are entitled to unemployment benefits and then working on reschooling yourself, then you get day care support for your kids as if you had a job.
NL is very American in that respect. The social security is designed from the perspective of the treasury, not the people's well being.
[1] https://www.justlanded.se/english/Sweden/Sweden-Guide/Jobs/U...
[1] https://www.foretagande.se/a-kassa-for-foretagare-sa-fungera...
Many unions will offer you cheap insurances covering up to 3 times that amount. And you can actually be in the union and get many benefits even as an entrepreneur.
Not really. It's really hard to try and get fired, since the employees are protected pretty well. So in order to get fired you would have to mess up pretty bad, to a point where you would usually leave a lot of scorched earth, so very few people do that.
If you are on good terms with the company you can also "get fired" (I've heard of that in a few startups), so you can collect the benefits, but that only works in a small set of companys I think.
You can't just stop doing your job, show up drunk, and yell obscenities at your boss all day. Well, you can, but you probably won't get unemployment benefits.
Sadly, I have not just one - but two friends who have lost their jobs for showing up incapacitated. One wasn't alcohol, though. They were stuffed full of amphetamines - but the first one was drunk. Neither mentioned any employer offers of rehab.
It's much more complex than that.
It is likely a cultural thing, as young (4-6 year old) Danes on the street do some happy, unlike their older siblings and parents;
I am aware that this contradicts surveys that conclude Danes are the happiest people and Swedes aren’t - just recounting my personal impression
These kind of things matter and are very rarely captured in statistics
When you run into a founder or work for one in the US, realize the absolute big risk they are taking. People in Sweden have a safety net to catch them. The result is people are more willing to take risks to start something and you also see more innovative startups that would otherwise be considered high risk in the US by founders.
Um, yourself? I have an ACA plan. It handles all the catastrophic stuff, and has a very reasonable deductible. It costs me ~$360/mo. Certainly this is a different ball of wax with a family (figure more around $1100-1400/mo for a reasonable plan) that has dependents.
In my case I quit working eons ago. I bought health insurance via a state marketplace (RomneyCare). My total costs (business insurance, legal, marketing) were less than $10K. I was profitable at the end of month two. At the end of year one, even with expenses I was making 70% more than I could as an employee in most companies in Boston (and around what I could theoretically get at Google, if they would even give me the time of day). It's been 5 years, and I still question why I didn't do it earlier. Worst case I had two years of savings in the bank from average-paying software jobs.
You don't have to do crazy things that require millions of dollars. I'm working on a "big thing" (to me) now that will require ~3000 hours of development time to launch, but I'm doing it all myself, and my costs are $10-15K and learning some new skills. Though the very real potential is for it to easily replace business one, and put my income well above what even the Valley could ever pay me. I wouldn't of done that quitting a job though -- that's something I would build on the side and launch while still employed, and only quit when it's clear the revenue will cover expenses.
As a student I would would have 10000 SEK / month ($1200), in grant and student loan. [1] You would expect to need nearly all of that in any of the town Universities [2] leaving nothing for healthcare. But in Sweden healthcare is nearly free (maxed at $120 for a 12 month period).
[1] http://www.csn.se/lattlast/studiestod/studiemedel/hur-mycket...
[2] https://www.kth.se/blogs/abhineet/2016/05/livingexpense/
[3] https://www.1177.se/Stockholm/Regler-och-rattigheter/Patient...
Because of this, companies needed to find additional benefits, non-monetary, to give to employees, both to keep and attract employees. So, they started to offer medical insurance.
Well, it stuck and medical insurance has been tied to employment ever since. But, that incentive has long-since been removed from the books and employers can now happily pay as much as they can afford.
As for other incentives, I don't know of any incentives offered to employers that offer insurance, at least until recently. The current incentive is a fine, if they are meet the criteria and don't offer insurance.
Other than that, a perverse incentive that does exactly opposite of what you're asking, there is nothing else. I suppose you could be referring to the employer not being taxed on money spent on insuring their employes, but taxes are based on profits and the personnel expenses are not on that side of the ledger. There's no incentive, the money just isn't taxed because we tax profit, not revenue.
Savings are finite, sadly.
Way to propagate an ignorant myth. The US has a massive welfare state and social safety net. The average poor person in the US can typically draw $25,000 to $30,000 in benefits per year depending on the state they live in. Those benefits include free healthcare, housing, food, work training, etc. For some states, such as Hawaii, it's nearly $50,000 per year.
Just drawing on several of the most common welfare benefits programs in the US, gets you near $20,000 per year.
According to a fact check by the Washington Post in 2014, the median total individual welfare benefits package in the US was $28,800.
Let's put it another away. These welfare benefits numbers are so high, they exceed the median income in all but a few very wealthy nations.
Housing programs are also often unavailable, if you were lucky enough to have got in years ago and stay in compliance with the requirements, then good for you. Most people who need housing assistance will never receive it.
Food support (SNAP, EBT & WIC) is essentially only for families, single people & couples get minimal assistance.
Were I to quit my job tomorrow, I would not receive unemployment as this goes to only those who lose their job through no fault of their own.
Health insurance, even with ObamaCare, would be based on my last year's income taxes. Thus no health subsidies - 100% out of pocket.
Welfare is probably similar in most states. Section 8, the same. So unless I had a nice stash in the bank, I'd be homeless.
The one exception, I believe, would be SNAP benefits. So I guess I wouldn't starve.
The Scandinavian countries clearly have far more generous social safety nets.
There are estimates NYC spends >$40k/year/homeless-w-mental-illness with no evidence their situation has improved. In fact, it might be getting worse!
Social safety and healthcare in America is broken. The War on Poverty has spent 10s of trillions, and our healthcare costs are the most outrageous in the world. That doesn't mean we have a good social safety net.
Proclaiming it's often insufficient is a comically loaded premise. How often? In which states? Under which circumstances? I've got the perfect response for that: it's often sufficient.
According to the OECD's numbers, the US poor live better than almost any other poor people on the planet save for those in a select few countries (eg Canada, Norway, Sweden, Australia). [1][2]
[1] https://www.forbes.com/sites/timworstall/2013/06/01/astonish...
[2] https://mises.org/blog/poor-us-are-richer-middle-class-much-...
https://www.forbes.com/sites/timworstall/2015/05/04/the-aver...
> The reality, expressed mathematically, is: Total Spending On “Welfare”/Those who receive benefits = $24.77 per day. That's a lot less than $168.
I'd be interested to know where your numbers come from.
There are approximately 16 million households that qualify as poor in the US. Households that exceed the poverty line do draw some benefits as well obviously, so it's not strictly those 16m poorest households pulling against the $1 trillion (which is to say, those 16m households are not each claiming ~$61k in annual benefits).
If you instead distribute that figure among the bottom quarter of adults - in terms of income - under the age of ~65 (over 65 most are drawing on Medicare), you get to something in the neighborhood of $20,000 per adult averaged. Per household you're going to be closer to $36k to $40k (eg the bottom 25m households * $40,000 per year).
Just the various healthcare programs utilized by the poorest 16m households - including Medicaid, CHIP, etc - is likely to be over $25,000 per year per household (not per person obviously).
The maximum welfare benefits a poor person in the US can draw annually, then reasonably aligns with the median state figure the Washington Post was quoting at ~$28,800 (again, it varies by state, some are far higher than others).
As I learned from the US healthcare debate, an astonishingly high percentage of the money goes into overhead. For example, you pointed out SNAP.
https://en.wikipedia.org/wiki/Supplemental_Nutrition_Assista... says: "SNAP benefits cost $70.9 billion in fiscal year 2016 and supplied roughly 44.2 million Americans with an average of $125.51 for each person per month in food assistance."
So, $55.5 billion goes to Americans, meaning %15.4 billion or 20% is overhead.
How much of the other money is also overhead? Consider a charity which takes in $100M to "build homes for the poor", and ends up building 100 such homes. Your analysis suggests the poor are receiving $1M homes. On the other hand, if 95% of the money is spent on overhead, they are only getting $50K homes.
We know there's overhead elsewhere, though not 95% - that was used to make a point. For example, your Medicaid example is directly connected to the absurd health care costs in the US. As Wikipedia tells me: "In 2011, there were 7.6 million hospital stays billed to Medicaid, representing 15.6 percent (approximately $60.2 billion) of total aggregate inpatient hospital costs in the United States.[74] At $8,000, the mean cost per stay billed to Medicaid was $2,000 less than the average cost for all stays."
So part of that Medicaid spending is on an overpriced medical system. Another part of that spending is simply wasted in carrying out means testing and administrative overhead. These are costs which don't exist in the healthcare system of most other rich countries, and in neither case should it be viewed as money going towards poor Americans.
Furthermore, means tests requires that applicants do extra work to file the right forms, stand in the right lines, and in general deal with the bureaucracy. This can include taking time off of work (so getting paid less), trying to find a baby sitter, etc. These are monetary costs which are hidden in your analysis, which only looks at the government costs, and there are human costs of extra stress and hassle - and issues related to loss of respect and humanity aren't easy to quantify monetarily.
To get back to your text, you use numbers like "There are approximately 16 million households that qualify as poor in the US" and "you instead distribute that figure among the bottom quarter of adults". However, as DanBC pointed out from the Forbes article, the denominator "the number of people who claim benefits", gives $24.77 per day.
That suggests that there are many more people who claim benefits than your estimates suggest. I can see one place already. You limited the denominator to the "bottom quarter of adults .. under the age of ~65 [because] over 65 most are drawing on Medicare." However, https://www.ssa.gov/history/pdf/RowlandandLyons.pdf points out that 9% of the elderly draw on both Medicare and Medicaid.
About 185M people are between 18-65 years old. (Adding up https://en.wikipedia.org/wiki/Demography_of_the_United_State... ). 1/4th of that gives about 46M, which close to your estimate of 50M ($1T/50M people=>$20K/person)
About 46.3M people are enrolled in Medicare due to age. 9% of that is 4M, so that's 8% missing from your earlier numbers.
In addition, children in "[a]ll states - except Tennessee - have additional disability-specific eligibility criteria, which allow some children with disabilities to qualify for Medicaid even if their parents’ income exceeds the state-established threshold." https://www.americanprogress.org/issues/early-childhood/repo...
I think this would also affect your numbers by increasing the denominator and so lowering the overall per-person payments.
To go back to DanBC's point, why aren't you using "the number of people who claim benefits" as your denominator?
CATO's numbers also match the Post's. They did a 2013 follow-up study to a prior 1995 study they did of work vs welfare trade-offs on a state by state basis. There is probably no more comprehensive source than their study, that I'm aware of.
"this study seeks to determine the approximate level of benefits that a typical welfare family, consisting of a single mother with two children, might receive"
[34 states come in above $25,000]
https://object.cato.org/sites/cato.org/files/pubs/pdf/the_wo...
Here are two articles that dig into how the Cato numbers are technically possible but not useful for having a real dialogue about the benefits people wind up receiving in real life:
http://www.politifact.com/rhode-island/statements/2015/feb/0...
https://www.washingtonpost.com/news/fact-checker/wp/2014/12/...
In the US, there's very little social safety net to catch you. If you get sick before the startup is big enough, it means personal bankruptcy - and no medical treatment. Missing revenue targets can mean missing student loan payments, missing rent, etc. There's real risk you'll end up homeless in the end.
In Sweden, you might end up poor, but the poor are still taken care of. You get your medical treatment, the state pays your rent, and you are guaranteed enough income to buy groceries.