America's stingy social safety net, graphed.

Wish the U.S. Were More Like Denmark? This Graph Shows We’ve Got a Long Way to Go.

Wish the U.S. Were More Like Denmark? This Graph Shows We’ve Got a Long Way to Go.

A blog about business and economics.
Feb. 1 2016 6:42 PM

Wish the U.S. Were More Like Denmark? This Graph Shows We’ve Got a Long Way to Go.

It's a long road.

Sean Gallup/Getty Images

Maybe it's just because the Iowa caucuses are upon us, but I couldn't help but think about Bernie Sanders when I saw this graph. Based on LIS data, it comes from a new report by Stanford professor Karen Jusko that tries to quantify just how stingy America's social safety net is compared with those of other economically advanced nations. Each bar shows what countries spent on various welfare programs as a percentage of what it would have taken to raise all their citizens' income to 150 percent of the U.S. poverty line in 2011—or about $33,000. The United States laid out about half of what would have been necessary to accomplish that feat. Denmark, which Sanders famously suggested the United States should look to as a model, spent about 75 percent of what was necessary.

What does that mean in terms of actual poverty reduction? Another chapter in the Stanford Center on Poverty and Inequality's State of the Union report offers some revealing numbers. Based on market incomes alone, Denmark's poverty rate was actually slightly higher than ours in 2010, when the LIS data were gathered—but once you take taxes and government social spending into account, theirs falls to 3.2 percent, whereas ours sits almost three times higher at 9.2 percent. It's a long road from here to Scandinavia.


In some ways, Americans may be worse off than these numbers suggest, as they don't include government funding for health care. Washington, of course, spends lots of money on programs like Medicare and Medicaid. But unlike its industrialized peers, the U.S. still doesn't have universal coverage.

In other ways, the U.S. does better at poverty relief than the chart lets on. With all of its social spending, Greece could theoretically have raised more of its citizens above the 150-percent-of-poverty mark in 2010 than the United States. But because its welfare programs do a worse job specifically targeting the poor, Jusko explained to me, more of its population still ends up in need.1

Still, poverty fighting isn't really Americans' forte. “The big takeaway,” Jusko told me, “is that even though there are countries with similar rates of market-income inequality and market-income poverty, the U.S. does an especially poor job of redistributing.”

1Also, if these numbers were updated for 2016, I'm sure depression-racked Greece and Spain would look far more dire.

Jordan Weissmann is Slate’s senior business and economics correspondent.