The Cost of Integration and Norway’s Fiscal Future

Our Norwegian correspondent The Observer sends two translations that bear on the future fiscal well-being of Norway. He says:

Although not directly linked to Islam, these two articles are still relevant. I have abbreviated and translated one from Aftenposten and one from Nettavisen.

They’re about the cost of integrating immigrants in Norway (only funds spent on integration schemes, not immigration as a whole) and the sustainability of the Norwegian ‘model’, which isn’t very sustainable at all. Norway is just another Greece or another USA waiting to happen. The oil isn’t going to save us: it’s just something that the authorities can use to muddy the water and to slow down the impact of the coming crash.

I expect to see a sharp increase in Norwegian emigration to the New World in the next couple of decades if things don’t change, because the future in Norway is looking very bleak.

The first abbreviated translation is from Aftenposten:

A total of twenty-three national action plans have been made and implemented in the last 20 years. However, despite this the unemployment rate among immigrants is three times higher than that of the rest of the population — just as it was twenty years ago. In other words, nothing has changed.

During this period a staggering NoK 100 billion has been spent — yes, one hundred billion — on schemes to integrate refugees, asylum seekers, and individuals who have arrived in Norway on family reunification visas. Divide this sum by the current population of Norway, which is five million, and we discover that each inhabitant has chipped in NoK 20,000.

Yes, we have an immigrant population with a relative high employment rate compared to other European countries, but that is mostly due to the fact that we have a very low unemployment rate in general.

Thousands of immigrants in Norway have jobs and are well integrated into our society. The question, however, is whether this is due to official integration policies or the efforts of the immigrants themselves. For the unemployment rate among immigrants is, as it was twenty years ago, three times higher than the rest of the population. Among Africans it is six times as high.

Another fact is that thousands of immigrants are working in jobs for which they are over-qualified due to an incomprehensible systematic inertia in acknowledging qualifications from abroad. Many lawyers and engineers with different skin color make a living by washing off dirt and grime for white Norwegians.

Aftenposten can also reveal that the government, politicians and bureaucrats are unaware of which policies, or which of the hundreds of schemes, that are effective, work poorly or don’t work at all. The authorities are even unaware of the actual number of plans and reports that have been produced and implemented and how much money has been spent on it.

We at Aftenposten had to figure that out for ourselves.

The second article is from Nettavisen:

Employees working in the public sector are slated to receive NoK 4,300 billion in future pensions. This is more than the current value of the Oil Fund.

“Public employees have been given the entire Oil Fund,” writes Finansavisen [Norwegian financial newspaper], which has been studying the future pensions of public employees’ as pledged by the government.

The equation applies to 840,000 public employees who will be paid 66% of their current salary when they retire. No one in the government has dared to do anything about these public pensions, despite the fact that employees in the private sector are experiencing frequent attacks on their future pensions because private companies simply can’t afford to pay for them.

“There are strong indications that Norway is sitting on top of a public pension bomb,” writes Finansavisen.

Since the red-green coalition government took over in 2005, an additional 100,000 public sector jobs have been created, and consequently, the state (taxpayers) has incurred future economic obligations for even more public retirees.

But is it really fair that the state guarantees NoK 4,300 billion in pension liabilities for public employees — at the same time that private employees are having their pensions shaved and face tax increases to cover the rising costs of public pensions?

In 1980 there were 460,000 employees in the public sector. That number rose to 580,000 in 1990. In 2000 the number was 711,000 and now 840,000 employees are working in the public sector in Norway.

On top of this, an additional 10,000 new permanent public jobs are created each year. The level of the Oil Fund is currently at NoK 3,865 billion. Even if future public retirees were to be given the entire fund, there would still be a shortfall of NoK 500 billion in pension obligations.

Prime Minister Jens Stoltenberg recently estimated that taxes had to be raised by 8%-9% in order to cover this gap, which means that an annual tax increase of NoK 70-80 billion will have to be implemented sometime in the future.