Archive for the ‘ Germany ’ Category

Measuring development and subjective well-being: Human Development Index vs. World Happiness Report

Can measuring “happiness” be a science? Doesn’t the meaning vary too much from person to person and culture to culture? The squishiness of happiness has not prevented researchers from trying to measure it and make it relevant for public policy.

With studies tracing in the paths of what the Human Development Report started over two decades ago, the OECD’s Better Life Index, the OECD’s Guidelines on Measuring Subjective Well-Being, the Happy Planet Index, and the U.S.-focused Gallup-Healthways Well-Being Index (with an international report from 2010) have aimed to perfect the science of quantifying subjective well-being and demonstrate the relatively fresh attention the subject has elicited. Most recently, the United Nations Sustainable Development Solutions Network has released its first World Happiness Report last year.

Subjective Well-Being Indices Rankings-page-001

According to the above table, rankings for well-being become pretty varied. Different indices use and weigh different indicators in different ways. The most exceptional example in this case is the Happy Planet Index which places an immense amount of weight on its indicator, “Ecological footprint” in order to emphasize the importance of environmental sustainability.

But let’s direct our attention to the first two: the United Nations Development Programme’s Human Development Index (HDI) 2013 and the United Nations Sustainable Development Solutions Network’s World Happiness Report (WHR) 2013. The HDI has been a pioneer, and Internationalcomparisons.org has long considered the index to be one of if not the authoritative voice on quality of life, achieving results profoundly more telling than the traditional GDP/capita. The WHR has developed under the influence of the HDI, yet it has come up with different results contrasting most significantly as it relates to Internationalcomparisons.org and the countries studied. Fortunately, the WHR dedicated an entire chapter (Chapter 8) to compare its system to the HDI.

Are more developed countries happier?

Human development, as an approach, is concerned with what I take to be the basic development idea: namely, advancing the richness of human life, rather than the richness of the economy in which human beings live, which is only a part of it.
-Economist Amartya Sen on the capabilities approach and what it means to defining subjective well-being

The objective of Chapter 8 in the WHR is to observe the relationship between human development and life satisfaction, that is to say in certain terms the HDI and the WHR. The chapter discusses at great length the different approaches (human development vs. capabilities) to define and measure development, satisfaction, happiness, and subjective well-being. Chapter 8 asks how positive is the relation between the HDI and life evaluation of well-being? For the intents and purposes of the HDI and WHR reports in the scope of the 150+ countries surveyed, very positive. Chapter 8 dissects individual indicators of the HDI like life expectancy, years of expected education, actual years of schooling, and GNI/capita with positive life satisfaction and concludes with correlative coefficients of 0.70, 0.69, 0.63, 0.73, and 0.78. Finally, HDI (overall score) shares a correlative coefficient of 0.77 with life satisfaction.

While this is good news in determining that the gap between measurements of human development and subjective well-being is closing thanks to an increased focus and research on the subject, our more narrow scope concerning the gap among the 12 countries studied at Internationalcomparisons.org disappointingly still lacks explanation.There are 33 places between the systems’ rank for Japan, 20 places for Germany and Italy, and 14 places for the U.S. and Denmark (which the WHR has at 1st). The correlative coefficient is either not strong enough at 0.77 or not relevant enough with the 12 countries on which we focus.

Advertisements

Examining the German and Californian shifts on immigration

International Organization for Migration sign promotes the benefits that immigrants bring.

International Organization for Migration sign promotes the benefits that immigrants bring in front of the UN building in New York. Credit: internationalcomparisons.org

“Kinder statt Inder” or “Children before Indians” was reverberated throughout Germany pervasively in both policy and public attitude only a decade ago. Since then, Germany’s success at withstanding the financial crisis has brought about a good problem, albeit one that requires a shift in such policy and attitude. Germany’s joblessness and decline in overall population has required it to look elsewhere than domestic means in order to fill gaps in its labor force.

In a relatively abrupt 180 degree turn, Germany has welcomed over 33% more immigrants in 2011 than 2010, attempted to ease the adaption process socially by providing language lessons, and have reduced the required financial requirements like minimum salary.

Germany is hardly experiencing a change of heart. The shift comes from certain political motives and not necessarily humanitarian benevolence.  Meanwhile in California, although the impact is yet to prove as profound (especially from the national front), considerable victories have been accomplished just this past week.

While Washington waffles on immigration, California’s forging ahead. I’m not waiting.

California Governor Jerry Brown sweepingly signed immigration bills one after the other last week in an effort to demonstrate to Washington that, outside of President Obama’s Deferred Action for Childhood Arrivals (DACA) from summer of 2012, it will neither lean nor wait on Washington to make demonstrative moves toward immigration reform. DACA has provided some foundation by applying prosecutorial discretion to all cases concerning the children of parents who have immigrated illegally. This has opened the door for states to grant certain liberties to immigrants, and Governor Brown is taking full advantage.

In his first move he granted immigrants the ability to obtain driver’s licenses. Since DACA, the number of states that have allowed driver’s licenses to immigrants has jumped from three to eleven.

He also signed a refined version of the TRUST Act after it easily passed through the state Assembly and Senate. The TRUST Act limits detentions to only those who have committed felonies, not misdemeanors. The TRUST Act is a direct response to the Secure Communities program which was originally intended to remove the most dangerous immigrants with a criminal history. The program, however, has been criticized for removing immigrants with petty misdemeanor charges as well.

Also signed were bills to limit an employer’s ability to threaten to report their immigration status to authorities. This gives the concerned employee more ability to handle wage issues, abuses in the workplace, and to work in an overall better environment according to an LA Times article.

Still another bill has been passed to disallow ones immigration status as a hindrance to becoming an attorney in the state of California.

With his hands more or less tied in Washington, President Obama has no other choice after seeing his Dream Act fail miserably but to resort to relatively quiet measures like DACA and depend on states to take charge from there. California has done just that. Unlike Germany where the motive has been ulterior politically and economically, California truly stands out as it achieves these steps toward immigration reform for the sake of the immigrant, himself.

Norway=model; exception

In addition to already having country profile pages for Germany and Japan, we have recently just added Denmark and Norway (also accessible from our home index page under the “countries covered” listing). While putting together the Norway page, we realized even more how exemplary Norway truly is.

Norway is not a member of the European Union. Also a factor in escaping the eurozone crisis is their oil and gas industry which has them benefiting from the largest budget surplus among all advanced democracies. Norway has an unemployment rate below 3%, no net national debt, and around $640 billion dollars stored away in a sovereign wealth account, mostly from its oil and gas industry. In 2009 Norway earned the highest per capita income.

Deserving much credit for its success is Norway’s fearlessness to tax. Their prosperous oil and gas industry receives a 28% corporate tax and a 50% industry surtax. Overall tax as a share of GDP is among the highest in the OECD. Corporate taxes are four times as high as U.S. rates. Their highest income tax bracket kicks in at $124,000 at 47.8%. Yet businesses aren’t saddling up to head to places where they might save on looser tax breaks, an argument from those in the U.S. representing a vast majority who refuse to consider any tax increase. In fact, start up activity not only in Norway, but also Denmark, Switzerland, and Canada is higher than that of the U.S. From 2006-2009, the U.S. economy treaded at a practically stagnant .1% growth rate compared to Norway’s exponentially faster rate of 3%. Norway also boasts more entrepreneurs per capita than the U.S.

Part of the reason why business owners are so keen to comply without raising a stir at Norwegian taxes is the sense of appreciation they have for the system. Norwegians benefit from free education from preschool to graduate school (often including universities outside of Norway); free healthcare; generous unemployment benefits due to a competitive, employee-friendly job market; forty-six weeks of maternity leave paid in full, 10 weeks for paternal leave. Education, retirement, and medical expenses are three paramount concerns for the average U.S. citizen, but all of which are provided in Norway. There’s a sense of giving back to the system in Norway for the ways one has benefited previously from the system.

 

Adapted from“US fiscal debate could learn from Norway” by Mark Provost from Progressive Press and  “In Norway, start ups say Ja to socialism” by Max Chafkin in Inc. Magazine.

The US, China, and clean energy investment

The U.S. for the second consecutive year has lost a spot in the rankings for highest investment in clean energy. The U.S. now ranks behind Germany and China and has also fallen to 11th among developed countries in clean energy investment growth rate over the last ten years. Chairman of the Sierra Club Carl Pope contends in an article on the Huffington Post website, that the results from the Pew Report are indicative of a growing complacency to the potential in the clean energy market being swallowed by China’s aggressive approach. Pope argues that arguments favoring a more complacent outlook which include concerns over whether other countries have cheaper labor, looser environmental standards,  less regulation, and easier access to raw materials are all thoughtfully considered and repudiated. Pope urges that the requisite component that is missing is a revived manufacturing sector. Without it, the U.S. will only continue to fall further behind in the clean energy market.

Germany: country profile

Dave Johnson in his article, “Germany’s Economy Shows Government ‘Interference’ Works,” makes a valid point that the United States’ reluctance in making adjustments within the market has further solidified the exclusivity and position of the upper class. The true interference, Johnson holds, is the manner in which the larger businesses in the United States inhibit productivity and competition from smaller companies. Johnson exerts Germany’s system as an exemplary remedy. Germany’s cohesion between the government and the labor force has sustained Germany as an exceptional economic case even during a time in which most economies struggle to stay afloat. To Johnson, there is an apparent connection between Germany’s esteemed productivity and its health care, higher education, child care, and pension systems. Germany has sustained higher wages for employees, closer union ties, and closer cooperation between the industry and government sectors. Johnson implores his readers to consider Germany’s case carefully and to compare it to our case here in the U.S.

Highlights to the reasons for and benefits from Germany’s economic success are outlined below:

  • Industrial development policy that favors some manufacturing over others. The government is currently helping promote green manufacturing, for example.
  • Very high worker incomes and benefits
    • Hourly manufacturing compensation (wages plus benefits) was $48 in Germany in 2008, the most recent year surveyed by the Bureau of Labor Statistics, while it was $32 in the United States.
    • Six weeks vacation, by law
    • Health care: German “Medicare-For-All” takes the expense of health care off of the people and businesses; giant insurance companies play no role, allowing more personal income and more for business investment
    • Receive child care and pensions.
  • Strong unions: Germany requires worker representatives to hold seats on the boards of directors of companies, depending on the number of workers, so the companies take the interests of workers and communities into account.
  • Investments in worker productivity with government-funded research, vocational training, and policies to retain skilled workers. As a result, they have higher productivity.
  • Fossil fuel businesses have little influence, and German policy is successfully reducing GHG and increasing energy efficiency.
  • German tax policy prevents transfer of wealth to the wealthy, rather than mandating it.