There’s been a lot of talk lately about poverty in the world’s wealthiest country. It’s not the poverty that Norway’s huge foreign aid budget hopes to alleviate but rather a relative sort that still exists in Norway itself, and opposition politicians are highlighting it for all it’s worth.
Debate climaxed this week with the release of the conservative government’s proposed state budget for next year. Prime Minister Erna Solberg and her finance minister, Siv Jensen, insist they’re tackling what the Norwegians call fattigdom, not least through more aid to struggling families with small children. The Labour Party-led opposition scoffs at the effort, even though its former left-center government didn’t solve the problem either during its eight years in office.
Even they will agree that the extreme poverty that plagued Norway for generations, and prompted hundreds of thousands of Norwegians to emigrate in the hopes of a better life elsewhere, has been mostly eradicated. There are still though, by modern Norwegian standards, too many poor, both children and adults.
Norway’s social welfare state has evened out income differences since World War II through taxation, various regulations and strong labour traditions. A recent report from state statistics bureau SSB, however, shows that economic differences among Norwegians have widened in the past 20 years. That coincides with the oil- and economic boom from the late 1990s until oil prices collapsed in 2014, and affluence spread. The numbers of Land Rovers and Teslas on Norwegian streets exploded in line with luxury holiday homes in the mountains and along the coast, soaring real estate prices and the numbers of Norwegians making fancy trips abroad.
It’s not so much that the poor got poorer, but that many became rich and got richer and richer. Income gaps widened, and now the social democrats in Norway are ringing the alarms. No one is supposed to be too rich or too poor in Norway, but that’s what’s been happening in relative terms.
Ironic roots during Labour’s time in government
The trend ironically took root and then took off during the last Labour Party-led government that ruled from 2005 to 2013. SSB reported last spring that during the period from 2006 to 2016, the number of children living in low-income families (defined as having annual income less than NOK 500,000/USD 62,500) grew by 34,000. Children living in immigrant families were strongly overrepresented but many ethnic Norwegian children suffer from relative deprivation as well, especially those living with single mothers.
And the rich got richer during the boom when oil prices topped USD 100 a barrel. Even former Labour Prime Minister Jens Stoltenberg was soon driving a new Tesla after Labour lost the election in 2013 and he had to give up his government limo, until he got a new one when he became secretary general of NATO the next year.
Now Stoltenberg’s successor as Labour Party leader, Jonas Gahr Støre, who comes from a wealthy family himself and has inherited millions, is taking up the cause of addressing relative poverty in Norway and narrowing income gaps. It’s become a major issue for the left-wing parties that are criticizing the conservative goverment for not doing enough. Støre has had to tolerate a lot of criticism, though, for failing to help those left behind in the boom and then only studying the problem. “For 15 years, Labour has addressed the problem with a lot of talk,” Audun Lysbakken, leader of the Socialist Left party (SV) complained to newspaper Dagsavisen after the new statistics on poverty were released. “Now they want even more talk instead of supporting proposals we know will help.”
Støre was also attacked by the Conservatives’ government minister in charge of family and equality issues, Linda Hofstad Helleland. She was not impressed with Støre initial call for a new study and “manifest” on child poverty instead of reacting with concrete programs. “It’s very surprising that Labour is so unclear about this,” Helleland told Dagsavisen.
Solberg, Jensen and their government colleagues rattled off a string of funding allocations in their own proposed state budget earlier this week that are aimed at helping the less fortnate: NOK 181 million to support programs for children, NOK 46 million to fund free day care for two-year-olds in low-income families, NOK 60 million to strenthen housing assistance programs and NOK 25 million to help fund recreational activities and holidays for poor families and children.
New proposals loom
Neither Labour, the Socialist Left nor, most importantly, the Christian Democrats who hold the swing vote in Parliament were impressed either. They’re now expected to come with new proposals for more taxes on those with higher incomes. Many opposition politicians and commentators blame the conservative government’s removal of inheritance tax for fueling more differences as wealth is passed on from generation to generation. They’ve called the end of inheritance taxes a “gift” to the wealthy, ignoring how the former inheritance tax forced some Norwegians with modest incomes to have to sell inherited property or businesses because they couldn’t afford the tax charged to take them over.
Solberg has responded to the rising political concerns over increased differences by jumping on the bandwagon herself, hosting a government conference on economic differences and “social sustainability” last month. “We’re putting this on the agenda,” she said, not keen to let the socialist side of Norwegian politics “own” the issue.
Some have recently claimed that fears over an ongoing increase in social differences in Norway are exaggerated. Commentator Andreas Slettholm, writing in newspaper Aftenposten last month, pointed to more new statistics showing fewer social differences than there were 10 to 15 years ago. He called claims of escalating differences “scary propaganda.”
He also noted that the growth of affluence in Norway has also raised the levels of what’s considered low income. In 2008, a family with two children and income of NOK 356,000 a year was considered poor. In 2015, the low-income level had risen to 450,000. Inflation, meanwhile, was low during the same period. “Those now viewed as ‘low-income’ families have roomier personal economy than low-income familes 10 years ago,” Slettholm argues.
State statistics bureau SSB recently wrote that there was little indication poverty in Norway had become more widespread during the period from 2009 to 2017. “Even though there absolutely are people with affordability problems in Norway, there aren’t more than earlier,” Slettholm wrote, adding that those admitting to having problems making ends meet had nearly been cut in half, from 9 percent in 2004 to 4.9 percent in 2017.
Children going hungry
Others insist poverty absolutely is a problem in Norway, and not just among children who returned to school this fall without being able to brag about having spent their summer holidays in the south of France. Kirkens Bymisjon, a Norwegian humanitarian organization, rang alarms last summer that children attending some of its recreational program arrived hungry, either because they lacked parental supervision or because there was no food in the house. Bufdir, the state directorate for children and youth, also claimed the number of children living in poor families has steadily risen since the beginning of the 2000s, from 84,000 to 101,325 just between 2013 and 2016. Oslo had the highest percentage of poor children, with 17.6 percent of all households plagued by low incomes.
More and more struggling parents have also been taking contact with the Red Cross and other organizations offering holiday programs for children. SSB reported that as many as 20 percent of single parents can’t afford a week of holiday during the year.
Political debate is thus flying over what to do. Some recommend dramatic changes in Norway’s longtime barnetrygd allocation, which pays out NOK 970 to all parents, tax-free, for each child per month. The amount hasn’t increased since 1996 and adjusting it for inflation would cost NOK 14 billion. An alternative would be to take all the barnetrygd funding and distribute it only to those who really need it, as a sort of welfare payment.
Still better than elsewhere
Finance Minister Jensen claims social differences in Norway remain small compared to most other countries. “More children attend day care, more complete their education and more enter the workforce,” Jensen told newspaper Dagsavisen last month, conceding, however, that “there are still people living in poverty who don’t get the help they need.”
Providing that help will be one of the biggest topics of debate in Parliament this fall. The Christian Democrats will side with whichever parties it thinks will come up with the best means of boosting household income levels, ensuring equal opportunity and helping children. Solberg and Jensen are banking most on good schools, job creation and an inclusive labour market to solve the problem, in addition to the programs in their state budget proposal. Støre of the Labour Party promises that it will propose programs when it presents its own “alternative state budget” laster this fall. The other socialist parties will likely come up with programs of their own as well, with Lysbakken of SV wanting to boost the child welfare payments called barnetrygd across the board.
One thing is clear: The topic is high on the agenda, a year after UNICEF pointed out that it wasn’t part of the campaign platforms of either Labour or the Conservatives heading into last fall’s election. “There’s been a lack of political will to address this,” Ivar Stokkereit of UNICEF Norge told Dagsavisen last August. Not anymore.