Ryan Chittum at Columbia Journalism Review recently had a good piece lauding the virtues of the high-wage, low-unemployment economy of Denmark. It’s a great country if you don’t mind the food and chilly weather. But whenever I read American writers touting some small cold part of Europe, I wonder why the obsession with looking so far afield? There are at least as many Nordic-sized chilly portions of the United States that feature broad prosperity as there are Nordic countries.
Consider the Boston-Quincy-Cambridge Metropolitan Statistical Area of the United States. Greater Boston contains about the same number of people as Denmark. And in Purchasing Power Parity terms it’s richer than Denmark. There is inequality in Greater Boston, but prosperity is broadly shared—median household income was $68,515 in 2010. That’s 25 percent higher than the American average. The 10th percentile of Greater Boston workers earns $11.05 an hour. That’s 28 percent higher than the American average. Massachusetts has a universal healthcare system, and Massachusetts’ public school system outperforms every European country’s schools (some Asian countries do better).
That’s not to take anything away from Denmark, which really is a very excellent country. But it seems to me more realistic to aspire to make the whole country more like the best parts of North America than to make the whole country more like the best parts of Western Europe. Among other things, looking at the best parts of America underscores the fact that one of the easiest ways to raise living standards would be to be simply allow for more housing development in high-wage parts of the country. The 27 percent wage premium the average low-skilled worker could earn by moving the Boston area is a huge deal but it’s not a practical option if there’s no affordable housing. In Europe, too, living standards would rise if it were easier for Portugese people to move to Denmark. But to achieve that they would need some kind of magic wand that caused Portugese people to speak Danish. Changing zoning codes is politically challenging, but much more feasible than that.