Civility on trial: welfare in the Western world

Humanist, Jan-Feb, 1997 by Thomas J. Osborne

In the Western world, the hot issue of welfare and related social services is being scrutinized by austerity-minded governments. Uncertainty about the security of the working and middle classes abounds. If uncertainty gives way to societal unrest resulting from cutbacks in social spending, we can expect to see an increase in crime, political extremism, and other social pathologies. Depending upon how far the downsizing of Western welfare systems is carried, many on both sides of the Atlantic agree that, on the eve of the twenty-first century, civility itself is on trial.

In order to assess the functioning of welfare systems on the other side of the Atlantic, I spent nearly a month in France and Italy this past summer interviewing two dozen government officials, business executives, academicians, journalist, and physicians. When I returned home to California, I compared my findings with recent developments in the welfare controversy in the United States.

Of the European countries, France has the most complex and certainly one of the most comprehensive social-welfare systems. Nearly 22 percent of the gross national product is spent on welfare-including health, retirement, unemployment, and education - and over half of the GNP is spent on social services overall. France is also burdened with an unemployment, level of 12.5 percent (more than double that of the United States) and, like Italy and the United States, it must address the needs of a growing elderly population. The high rate of unemployment is problematic because fewer workers means less government revenue, and in large measure the social-insurance system, especially pensions, is based upon length of employment.

Still, the munificence of France's "womb-to-tomb" social-welfare system is remarkable by any standard. There is comprehensive and largely reimbursable medical and dental coverage. Retired persons receive pension payments of unlimited duration for up to 80 percent of a white-collar worker's final salary and 70 percent for blue-collar workers. The state has mandated an official minimum wage of $1,200 per month, and a minimum of five weeks of paid vacation and two weeks of paid public holidays per year. To help the hard-core unemployed, the government issues Revenue Minimum d'Insertion payments ($460 per month for individuals) to poor people over 25 years of age. And, as in many other European countries, there is free education from elementary grades through doctoral and professional programs. Not surprisingly, all of the French people I interviewed gave high marks to their country's welfare system.

All of this is not without a price, naturally. Reining in the high costs of assistance and the high level of taxation (about 60 percent of gross individual salary) needed to sustain the current level of welfare and related social services presents President Jacques Chirac's conservative government with a daunting challenge. For one thing, he is confronted with his country's sense of civic sohdarity - the sens civique - that united enough people in support of strikes in December 1995 to force the government to abandon proposed welfare and other social spending cuts.

Across the political spectrum, there is a great deal of consensus among those left and night of the political center to resist austerity reductions in the interest of humane governance or civility. For example, Jean-Pierre Sakoun, an avowed conservative, and business executive whom I interviewed in Paris, did not see a need to dismantle or even shrink his country's welfare system. He spoke for nearly all of the Parisians I inter, viewed when he remarked:

It's natural for the French people to think that the state is the guarantor of society - caring for the aged and poor. The French do not think society will be cared for without intervention of the state.... Americans would see this as the worst system in the world. Our current economic crisis will not change this sharing of the wealth. France has decided to maintain its system even if the economy is in trouble.

The French model of a highly centralized, efficient welfare state contrasts sharply with that of Italy, which is decentralized and loosely organized. Like the French system, However, the Italian system provides national health care, generous unemployment benefits and retirement pensions, and free public education through the university level. Most of Italy's poverty is found in the south, where the unemployment rate is 20 percent and where, according to those I interviewed, welfare fraud is rampant. About 45 percent of the elderly live with and are cared for by their family (the corresponding figure for France is 25 percent).

The Italians I interviewed valued their welfare system - though they did not speak as proudly of it as the French did of their own system - and called for paring it down while preserving, its basic commitments to those in need. Corrado Serra, vice-president of Banca di Roma in Milan, for example, told me that Italy's health-care system "distributed benefits fairly but was not well managed." To improve health-care management, he urged more privatization. The CEO of Istituto Europeo di Oncologia, Dr. Stefano Mchelini, likewise recommended increased privatization.