Criticising Two-Side Impact on of Welfare State Policies against Women

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It has become a common opinion that the Nordic countries are the right example in talking about gender equality, especially regarding the representation and participation of women in various fields. Nordic countries with Viking cultural background, gender equality, and strong welfare state policies have undoubtedly allowed significant advancement of women. But who would have thought that the welfare state policies turned out to be slowing down the progress of women in the business sector, both as workers and top level managerial! In the book “The Nordic Gender Equality Paradox”, Dr. Nima Sanandaji elaborated this issue through a critical and exciting point of view.

On one hand, Nima appreciated and recognized the impact of welfare state policies and affirmative action to encourage women’s active participation. Welfare state policies have created job opportunities for women supported by a variety of services related to family needs. Through this policy, the Nordic countries have high levels of female employment, especially with child care policies that allow both parents to work, with its outstanding history and values of gender equality. 

Paradox of the Welfare State policies on Gender Equality

However, the high level of representation and participation of women only occurs in the public sector, which is a dominant sector in the Nordic countries. This is the paradox of gender equality reviewed by Nima through the explanation of the history and public policy in the Nordic countries. The explanation based on this context also makes the book more interesting to read, especially to understand the background of the Nordic countries; including the applicable welfare state policies.

For example, related to the business sector, the proportion of women at the management levels, executives and commissionaires is low, even compared to neighboring Baltic countries, Anglo-Saxon countries, including the United States. Data from Grant Thornton (2013) which was used in this book showed that the percentage of women in senior management positions in the Nordic countries: Sweden (27%), Denmark (23%), and Norway (22%). This percentage is lower than the other Nordic countries such as Iceland (33%) and Finland (32%); Baltic countries such as Latvia (43%), Estonia (40%), and Lithuania (40%); also other countries such as Germany (31%), Greece (30%), Belgium (28%), and France (26%).

This is where Nima, who also referred to some of the results of research on the welfare state policies and women’s participation in the business sector, criticized the invisible or unintended impact to arise out of the welfare state policies. Firstly, the welfare state policies with a high-tax system made it expensive to obtain services. It is encouraging women in the Nordic countries to choose to work part-time and taking care of the household matters. As a result? Actual potential of women and their efforts to reach the top positions in the business sector is limited. Secondly, the combination of high taxes and generous systems that encourage women to work part-time.

Thirdly, the choice for a breadwinner to stay at home with children is also a barrier to reach the top positions due to limited time for work. Fourthly, monopoly / oligopoly in female-dominated public sectors (health, education, care for the elderly) also reduces the opportunities for women to take part in the sector. Fifthly, the situation and the determination of salaries by the union have also made the hard work and individual investment in the education sector paid by inappropriate rewards. Sixthly, social security benefits the workers and burdens the employers. This reduces the incentive to become entrepreneurs, especially women, because of its dependence on the assistance provided through such guarantees.

The Danger of Excessive Government Intervention

Another interesting point raised by Nima is that government intervention through affirmative policies does not necessarily encourage the representation and participation of women in the business sector. Moreover, while maintaining welfare state and high taxes policies. One example raised in this book is the Norwegian policy in 2006 which required a 40% quota for women in the top positions of the public companies. What happens was, even after 8 years, no women reached the top 60 executives at top companies in Norway (Nordic Labour Journal, 2015). In fact, out of the 500 targeted companies, 100 of them changed its ownership structure to avoid such obligations.

Additionally, in fact, only women in the elite groups benefited from such policies, given their access to power. The presence of women in the top positions of a company did not necessarily improve the performance of the company and other female workers’ salaries. This point is particularly interesting especially associated with a feminist perspective that emphasizes on intersectionality and relation to power in assessing gender equality and women’s experience. Unfortunately, Nima did not discuss this matter, especially from the multi-voice of women in the Nordic countries.

It would be interesting if the Nordic women’s perceptions on the welfare state policies were elaborated further to understand their experiences, ideas, and expectations, especially when talking about gender equality. In addition, the support of female NGO who tend to be socialist is also interesting to be discussed in the context of civil society and activism in the Nordic countries. Moreover, to discuss how they see the paradox of welfare state policies and its impact on the progress of women in the business sector.

Nima’s argument in this book reminded us of Frederic Bastiat’s argument on the ‘unseen consequences’ or ‘unintended consequences’ of a policy. Public policy is basically not an argument for a single policy, for example about affirmation, but on the other hand, it fails to see the larger context. For example, the tax system, welfare state policies, the role of the private sector, the local context (cultural, family system), and so forth. Nima argued that the welfare state policies in the Nordic countries are aimed to encourage the significant participation of women in the public sector because it cannot be separated from the dominance of the public sector in these countries. Another note in this matter, the data from Eurostat showed that 77% of women are actively working in Sweden (The Guardian, 2015).

On the other hand, the welfare state policies in the Nordic countries also led to the low percentage of women entrepreneurs. High taxes lead to expensive services to meet personal needs, where the welfare state policies have been systematically reducing the opportunities for women to work in several sectors dominated by female entrepreneurs (personal services, health and social work, and education), as a public monopoly.

However, the welfare state policies and the affirmation were not useless when looking at the reality of participation and representation of women in the business sector, especially at the top level of management. Here, Nima compared the Nordic countries to the Baltic countries, as well as countries in the Atlantic and in Europe, by indicating several factors such as culture, economic systems, values, and historical background. The result was surprising; especially considering the Nordic countries has long been renowned as the best example for the affairs of ‘gender equality’. Apparently, the glass ceiling can be solved on one side (the public sector), but on the other hand, leaving the unintended or invisible impact, which inhibits the representation and participation of women in the business sector.

Importance of Market-oriented Feminism for Gender Equality

Clearly, the interesting message from Nima is in line with the principles of libertarianism, the importance of small government, lower taxes, and less government intervention. Another message from Nima that should have appeared in the introduction part of this book is how the practice from one country should not be applied directly to another country and instead, the other country must learn from failures or other things that were not working in the first country.

Nima’s arguments are, in my opinion, in line with the approach ‘Gender and Development’ which no longer questioned about on ‘women’s place’, but also how women are treated and the joint efforts to promote social transformation, so that women can contribute more meaningfully in various fields, including in the business sector. Welfare state policies are certainly not one hundred percent bad and wrong, but it’s important to carefully look at the invisible impact, especially towards empowerment, participation, and progress of women in other sectors.

What happened in the Nordic countries was that the welfare state policies and high taxes turn seriously impacted on the participation and representation of women in the business world, although they were not intended so in regards to the reputation of the Nordic countries about gender equality. Some examples of such policies, a generous leave system such as in Sweden, 14 months and remains fully paid for the new parents; affirmative policies in Norway on the management level in the business sector, public monopoly in the service sector where most workers are women, as well as higher taxes.

Such systems and policies, as well as the fact that the trend for women is to prioritize their family, making women in the Nordic countries choose to work part-time and are not compelled to move to the management level, let alone to reach the top position. This is what concludes the intellectual egalitarian policy failures in the Nordic countries due to such undesirable side effects (Christine Hakim 2000).

This book is interesting to understand and criticize the visible and invisible impacts of public policy. It also underlines the importance of market reforms that introduce competition in the services sector that has been monopolized by the government to encourage the careers of female workers in the sector. In other words, what is happening in the Nordic countries makes a strong case to consider and encourage market-oriented feminism. Of course, things like understanding of the context and the policy is very important in policy-making processes.

At that point, Nima emphasized the importance of the Nordic countries to implement a more market-oriented approach to fulfill their potential as countries with the world’s best gender equality. As previously mentioned, the Swedish government, after 2006, through tax reduction, especially for the provision of personal services, has contributed to a drastic increase in businesses run by women. This was also followed by the policy to open up greater opportunities for private companies to move in the sectors of education, healthcare, and social services.

The book also carries an important message that no policy is perfect and sacred. There is always a lesson to be learned from the implemented policies, both successful and unsuccessful policies. Whatever it is, the policies should be scrutinized given the potential that could be the cause of paradoxes and dilemmas of public policy.

This book is easy to read, with supporting data, illustrations and information on the context in the Nordic countries. The book is interesting and important to read, especially by enthusiasts or public policy makers, gender and development issues, social and economic issues, and comparative politics study.