Sweden, Norway, Denmark, and Finland are the four countries that comprise the Nordic region. Nordic countries rank among the top wealthy nations of the world. The Nordic model has been a subject of much admiration across the world. Nordic countries score high on the livable conditions, happiness quotient and economic development. The Nordic model emphasizes a combination of free-market capitalism and social benefits. Where everywhere else there is a disparity between the rich and the poor, Nordic countries by far is a good example of social equality.
The society as a whole enjoys free education, free healthcare and other facilities that are implemented by the government. According to a recent report by the Bertelsmann foundation, Scandinavia has the most well-rounded sustainability performance. Many countries in the world are trying to emulate the Nordic Model.
Most of the Nordic countries have no legal minimum wage but still have minimum wages set by the respective industry. The Nordic model emphasizes collective bargaining which means that the majority of the working population has a union to represent them. The unions make sure that they negotiate with the industry to get a fair minimum wage for their workers depending on the industry they are working in. The human development Index published by the United Nations puts the Nordic countries in the top 25 countries while the World Happiness reports see the Nordic countries in the top 10. This is despite the fact that in many of the Nordic countries the people end up paying 50% or even 60% of their earnings in taxes.
The surprising part remains that in spite of having no national minimum wage law, Nordic countries are extremely generous with their minimum wages to workers. For Eg in the USA a Mac Donald employee may earn up to USD 9.90 an hour, workers in the Mac Donald’s outlet in Denmark can make up to USD 21 an hour. Denmark has an agreement between its trade union and employer’s organization that puts the minimum wage at USD 21. In comparison, Denmark gives its employees almost 11 USD more than what they can expect in the USA for the same work. Majority of the Danish companies work in harmony with the unions to provide the best wages in the world.
Economic sustainability in the Nordic Region
1) Free Market: Most of the Nordic economies believe in the concept of a free market. The prices for the goods and services are set by the understanding of the buyers and the sellers. This makes the economy completely free from any monopoly and interference from the government. This has led to a unique style of a sustainable economy. If you take Denmark for eg then majority of the list of companies in Denmark are registered with the employers union which makes it easier for the workers union to negotiate wages on behalf of the workforce.
2) Strong Unions: Nordic regions have the strongest of the unions in the world. The collective bargaining approach has worked so far for them. You hardly get reports of a protest by the workers for better pays or for jobs, unlike other countries. The Nordic people have complete trust in their unions and government and there are hardly any disagreements. This makes it a win-win situation for all concerned. All Finnish companies are a part of the employers union and take an active interest in the collective bargaining for the minimum wage for respective industries and sectors.
3) High Tax Ratio: The Nordic countries believe in a high tax high benefit policy. Though the percentage of taxation is high, the welfare provided by the government is equally rewarding. All the Nordic countries have Value Added Tax that is levied on businesses throughout the various stages of production. In fact, value added tax amount for a significant share of the gross domestic product as well. Sweden collects about 9 percent of its GDP through value-added taxes levied on the companies. Still, the list of companies in Sweden is ever increasing. The redistributionist taxation system in the Nordic countries ensures that essential amenities like health care and education can be provided free of cost. The Norway company database boasts of premier educational institutions and health care providers.
4) Equality: The Nordic model provides for economic equality among the citizens. Since everyone pays higher taxes the benefits are also reaped by everyone. Nordic countries have the smallest ratio of income disparities in the world and the lowest gender pay inequality as well. This ensures that all the citizens are entitled to free healthcare and free education. In fact, the high tax high benefit system has been working wonders in sustaining their economy despite a recession.
Minimum Wages and economic stability-.
Though there are no laws setting the minimum wage, each Nordic country has strong unions that represent the workforce. The companies on their part also have organized unions that take an active part in the collective bargaining process. Thus despite higher wages, the region is more than stable. The Norway business directory has companies of varied interests’ coexisting in the region in harmony. The people of the Nordic countries are extremely supportive of the government and vice versa. There is empathy for the poor who are looked upon as unlucky rather than people who are unproductive and lazy. Besides this, the Nordic population takes a keen interest in the activities of the government exercising their right to vote and being active in social activities.
Even with the higher corporate taxes, there are a number of companies in the Sweden business directory that have thrived not only with the region but in international markets as well. The Finland company list and Norway Company list also boasts of local companies that have gone on to be named to reckon with in the global market.
The higher ration of minimum wages has stabilized the economy rather than pulling it down. Due to the higher wages, the Nordic people lead happy lives with basic amenities and welfare programs provided by the government.