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Danish report warns of increased geographical segregation between rich and poor

A new publication by the Economic Council of the Labour Movement says Denmark's residential neighborhoods are slowly losing their socioeconomic diversity. A local expert explains why that is problematic.

COPENHAGEN, Denmark (CN) — Between the wealthy and poor in Denmark, divides appear not only sociologically but literally across the map.

In its latest report on distribution and living conditions, building on a nationwide analysis of geographical data and income distribution data, the Danish Economic Council of the Labour Movement finds that the country has seen at least 10 years of increasing geographic segregation based on how much money the household has.

"Increasing segregation means, i.e., that our neighbor is more like ourselves and that our kids more often go to school with classmates with the same social background," the report warns. "It risks weakening the trust and cohesion that is the foundation of our model of society.”

The data shows that only about a quarter of all Denmark primary schools have students from all income groups. The wealthiest percentile clutters to invest in property in Copenhagen, but regions like Eastern Jutland have also witnessed an increased residential divide between high- and low-income families, researchers found.

Lars Andersen, director of the council, drew parallels to the U.S. when he spoke to national newspaper Kristeligt Dagblad. “The Danes, who earn the most — and the middle class — are increasingly gathering in special neighborhoods. ... The risk is that it affects the mutual understanding of one another across social groups. The scare example is the United States, where social division has led to widespread polarization."

Egon Bjørnshave Noe, manager for the Center for Rural Research at the University of Southern Denmark, shares that concern.

“Segregation can lead to a form of dehumanization. If we only socialize with ´our own kind,´ it becomes easier to upkeep the idea that other people think differently and have different needs. Ultimately, it can lead to instability, even in a small country like Denmark,” the professor said in an interview with Courthouse News, using Denmark's 2015 national election as an example.

The results showed political divisions between city areas and rural districts. The former tended to vote for socialist and globally oriented parties, while the latter opted for the more liberal and nationally oriented ones.

For timely examples of widespread geographical segregation, Noe also looks westward.

"In the U.S., there are several examples of citizens who feel bitter and estranged in their own country," he said. "In England, we also see extreme differences between London and the rest of the country. Brexit was a reaction to that, albeit one that will not have the desired positive outcome in counteracting financial inequality."

Nonetheless, the development has accelerated in Denmark over the past decades for some very country-specific reasons.

Noe explains that in the early 1990s, the Danish government adopted an idea of the welfare state as a competitive entity. It meant a new focus on increasing effectiveness and cutting costs. And measuring practical rather than social function.

“The schools’ success was now measured after how many students they could teach for as few funds as possible,” Noe explained. "The post office's only function became solely to deliver letters, and so on."

He calls the movement for “differentiation” and “specialization.”

Local governments started outsourcing jobs to bigger companies, which did not necessarily have a connection to the local area but were instead highly competitive on price. And central state functions such as tax registration were moved online, rendering physical offices obsolete.

The development had another push in 2008 when the government reduced the number of Danish municipalities from 271 to just 98.

Today, Noe noted, most of Denmark's education institutions and health care services are concentrated in the main cities. So it is unsurprising that urban areas today have become a hub for wealthy people while the rural districts are lagging.  

“It is not like there is an evil masterplan. It happens consequentially — not just in Denmark but all over the world," Noe said.

“The problem is that it makes some areas way more attractive than others," he added." And while the rich gain terrain there, the poor are probed to move to cheaper places, where their benefits can pay for more. It is a self-reinforcing segregation machine.”

Last year, the Danish Economic Council of the Labour Movement did another quantitative analysis and found that wealth differences between different geographical locations in Denmark keep growing. In 2010, general income was 3.7 times bigger in the richest parish compared with the poorest. But in 2021 the number had increased to 5.4.

Noe is not surprised to see the gap widening. Mitigating that tendency, however, will be a complex undertaking.

”Well, it is always easier to do the analysis than come up with solutions," he said. "But it would be good with a change in perception of the value of government tasks. If we acknowledge that they serve an important social function and help create vibrant communal life, we also start to understand the derived societal costs of not having them in place. Also, a model of allocating tax money to a county based on its number of inhabitants is hardly viable."  

In Denmark, the debate is very timely.

This spring, a broad political majority agreed on specific plans to move several higher educations out of the big cities. The decision has resulted in numerous student protests.

And just a few weeks ago, the Danish Parliament passed a new law that offers state guarantee housing loans in rural areas. The aim is to make it easier to get the bank´s permission to buy property even when no imminent value increases are in sight.

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