The paradox of welfare state

saving pig

I was a supporter of the welfare state many years before I actually moved into one. But after a while I have my doubts. How to find a proper balance and not to resolve every issue for the residents? How to suppress poverty or help those in need, but not with money being gambled in the slot machines?

The welfare state has a lot of positives. Indeed it helps people to overcome obstacles, reduce the poverty, lower social tensions or help people to gain a better education. On the other hand, it is costly and money might not end up in the most needed services. People might become dependent on welfare and their personal responsibility might be taken away.

As an example: I know that primary education in Finland is considered to be free of charge for everyone. But not only the education itself, but also everything that is connected to education, like food for pupils and transportation. The thing with free food started after World War II. and had some meaning back in time, but why is there no change in 2021? I personally prefer social justice in the way that everyone should contribute to the system regarding their possibilities and gain from the system regarding their needs. A nice example is a fee for kindergarten, where the low-income families might have daycare for free but those who earn more pay also higher fees. Food for free is never free and kids should learn this. 

Another example – my daughter’s school is currently under reconstruction and kids are allocated in other buildings for a couple of months. It had never even crossed my mind to wait for the decision of authorities on how kids’ transportation will be organised. Of course, we will manage and find a solution, because we want our child to go to school. Just 3 days before the school’s start other parents started messaging in our WhatsApp group and complained about what they are supposed to do now and if the city organised some transport for kids. I realised that this is what the welfare system has destroyed. How to look for the solution by yourself first and how not to rely on somebody else’s decisions. Again, those pupils and families who have difficulties with the new schedule and transportation should be helped, but would you really wait till somebody makes the decision and not actively look for one? 

I remember the proverb: “Help yourself man and God will help you too.”  Social welfare should reflect this. First, you look for a solution by yourself. If you cannot find any, ask for help inside of the family. If this is not possible, ask friends and close community. Just then comes the municipality and state support. To come and help in situations that cannot be solved otherwise. Where did this disappear?

If I understand it correctly, there are some social and health services financed through taxes of residents and some others are supported by STEA – Funding Centre for Social Welfare and Health Organisation. STEA supports different NGOs operating in Finland from the income gained in the lotteries, slot machines and other gambling opportunities. Yes, in Norway the welfare state is possible because of the income from oil extraction and we can also discuss whether it is ethical keeping in mind devastating impacts on our environment and cause of the climatic change. Still, the Finnish way seems even more ridiculous. Slot machines and winning draws are pretty much available everywhere. Even when you return empty cans to the shop, you can decide whether you want to gamble the money or if you prefer to take a ticket and use it for payment in the store. 

In the survey about gambling in Finland, I found information that 78% of all participants gambled in the last 12 months (which is 3.1 million people out of 5 million) and almost the same amount of people think, that there are way too many possibilities for gambling in Finland. 

Even if gambling can be a lot of fun, it can cause serious problems. Most of them are connected with the loss of income or other properties. But the impact on one’s health conditions might also be serious (depression, anxiety, the presence of other addictions, relationship problems, etc.). The paradox is that the same money collected in potentially pathological behaviour is partly distributed to the services to help the same people out of gambling. And of course to finance other activities of the welfare state. In a way, it is kind of weird and welfare states should find other ways to maintain the care for those in need.

The whole economy is somehow deformed… People who work in full-time employment still have to have financial state support for housing expenses. The salary from full-time employment should be high enough to cover all your essential expenses such as housing costs, food, leisure time activities and so on… and if it is not, there is something that stinks. Either on the side of income or expenses. 

Poverty might be defined in different ways. In absolute terms: “Individuals are considered poor if they live in a household with a daily per capita consumption or income of less than the US $1.90. In general terms, this is believed to be the monetary amount needed to cover the costs of basic food, clothing, and shelter around the world.” 

Relative poverty is defined as the income of the rest of the reference population. “An example of a relative poverty line is 60 percent of the median income.” Even if the regional differences in income might be huge in Finland, the median income for the whole country in 2019 was 3.139 EUR. So anybody who earns less than 60% of it (1.883,40 EUR) might be seen as a working poor. And those people should be addressed with financial social support. But those who earn more shouldn’t have problems surviving. If it is happening, where is the problem?  

But what about the social services (not financial benefits) for different groups of people? How to decide what is more needed and should be prioritized? I have a very blurry idea about it but the truth is, that if there is a chance to have about 85-90% of your expenditures as NGOs covered by the state grant scheme, the concurrency doesn’t exist. And concurrency even in the social sector is a good thing. Because customers should decide what services meet their needs the best. Multi-source financing is a pretty common thing in the non-governmental sector worldwide. I was quite stunned when I realised that in Finland it works differently. 

In Slovakia, the government rarely gives an NGO more than 30% of its budget. Then you have to sell your expertise to the local municipalities, write projects for different EU bodies, international or national foundations, or find a partnership within the private sector.  

I am quite curious to see how the system is going to be maintained in the future. Not only to see how many Finnish NGOs survive the lack of funds from the state grants, which will sooner or later come but also to see whether Finns still have the sisu – because it will be either more taxes or less welfare state… And so far, I have a feeling that people might rely on the state a little bit too much.

Leave a Comment

Your email address will not be published.