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THE STATE OF THE EUROPEAN UNION
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healthcare and private education run parallel to
public healthcare and public education, often
providing better services. The consequences:
higher earners have better chances of recover-
ing from illnesses, tend to live longer and their
children have better chances of succeeding on
the job market. This is especially the case in
many ex-communist countries where, because
of a lack of financial resources, public services
are not very (or are no longer) good and are
superseded, in addition, by an informal ration-
ing of service delivery that responds to private
top-up payments “under the counter”. Trends
towards a two-tier medical system and (to a
lesser extent) a two-tier education system can
be seen as well in a number of countries which
were previously relatively egalitarian, such as
Germany.
When comparing European countries with
regard to (a) income distribution and (b) the
share of welfare spending of the gross domestic
product, it appears that countries with relatively
high levels of social spending (Scandinavian and
Western Central European countries) tend to
have a relatively equal income distribution pat-
tern (when examining the ratio of the second
richest and second poorest quintiles of the in-
come scale). But there are two outliers with in-
come distribution patterns that place them
rather in the middle of the European rankings:
France and Germany. On the other hand there
are decidedly egalitarian countries where social
spending is a long way below the European av-
erage, namely the Czech Republic, Slovakia,
Slovenia and Hungary. If we look towards the
labour market we see that countries with more
equal distribution of income, with the exception
of Austria, also have considerably lower num-
bers of “working poor” (not quite as prevalent
in Hungary). Again, the values for France and
Germany are considerably higher. This finding
suggests that the labour market is undoubtedly
more important for eventual income distribu-
tion and the extent of social polarisation than
the welfare state.
The political challenge
If we understand a “good” society as being one
in which all citizens share adequately in a na-
tion’s wealth, we cannot be satisfied with the
situation that has progressively come to light in
many European countries. And if we truly want
a “good” society, we cannot be content with
shrugging our shoulders and observing that the
market is simply not producing anything else at
the moment. The political challenge would then
consist of somehow “wresting” from the mar-
ket something, which it does not wish to deliver
if left to its own devices. The ideal solution to a
more equal form of income distribution would
surely be, at least at the lower end of the distri-
bution pyramid, to usher in economic growth so
that manpower quickly becomes scarce and can
then command a higher market price. Of course
this would require qualification profiles that
match the demand structure – certainly not a
workforce that is purely highly skilled. And of
course it would make it easier if growth took
place throughout large scale and workers could
go to where the jobs were being created, so pref-
erably across intra-EU borders. The disappear-
ance from the market of companies and eco-
nomic activities that cannot survive with higher
wages would have to be tolerated. The price in-
creases that go hand in hand with this type of
structural change would have to be accepted.
Growth that makes manpower a prized
commodity across a broad range of qualifica-
tions much talked about highly skilled variety)
(not only the much talked about highly skilled