Viking Economics by George Lakey

Anglo-American workers only produce goods and services valued at $38.20 an hour.”
    Comparing two countries at the extremes of the OECD spectrum on union density, Brooks and Huang note that “American workers tend to be very productive, on average producing goodsand services worth $46.3 per hour. However, it might be noted that they are not nearly as productive as workers in Norway, who produce goods and services worth $56.6 per hour.” 51
    The United States operates a different economic model, which values
insecurity
. The model keeps unemployment high and sustains poverty and hunger. A family depends on a job that might disappear tomorrow; it lands in a feeble safety net; it has few prospects for finding another job as good or better. Small wonder that U.S. unions sometimes defend inefficient labor practices and outmoded organization of work, even though undermining productivity—whatever it takes to keep workers in jobs. In other words, compared with the high-productivity Nordic model, the U.S. insecurity approach creates
an incentive to resist efficiency
.
    U.S. economist James Galbraith helps us see how productivity-reducing the U.S. model is in comparison with the experience of Nordic corporate managers. Over there, labor costs are high and there are few barriers to trade. “If you are a business in Sweden or Norway, you are free to import, export, and outsource as you like,” Galbraith writes. “There is, however, one thing you are not free to do: you are not free to cut your wages. You are not free to compete by going after cut-rate workers, either native or immigrant. You are not free to undercut the union rate.” 52
    Galbraith explains that these strong rules incentivize productivity. They guard against lazy or incompetent managers who try to maintain profit by underpaying employees rather than doing their job of increasing efficiency. Strong unions fight for the Nordic model, which incentivizes productivity.
HOW MANAGERS INCREASE PRODUCTIVITY BY KEEPING QUALITY WORKERS
    Finn Gjaerum, the CEO for whom Berit babysat when she was young, cited the reliability and competence of his workers as one reason for his satisfaction as an entrepreneur. Max Chaflin, the senior writer that
Inc. Magazine
sent to Norway to dig into such matters, interviewed entrepreneurs about finding and keeping good workers.
    Chaflin interviewed Wiggo Dalmo, owner of a $44 million company that mostly employs mechanics and machinists. In his industry, the employee turnover rate is 7 percent, but Dalmo keeps his turnover below 2 percent. He does that by treating them like Google engineers. He employs a chef who prepares lunch for the staff each day. He throws a blowout annual party—last year the cost was more than $100,000. He also adds private health insurance on top of the insurance that all Norwegians get free, enabling treatment in private hospitals for conditions that might not be treated as quickly in the public ones.
    Chaflin notes that “it takes more than perks to keep a worker motivated in Norway. In a country with low unemployment and generous unemployment benefits, a worker’s threat to quit is more credible than it is in the United States, giving workers more leverage over employers. And though Norway makes it easy to lay off workers in cases of [the firm’s] economic hardship, firing an employee for cause typically takes months, and employers generally end up paying at least three months’ severance.”
    Bjørn Holte is the founder and CEO of bMenu, a start-up that makes mobile versions of websites. Chaflin reports that Holte payshimself $125,000 a year while his lowest-paid employee makes more than $60,000. He quotes Holte: “You can’t just treat them like machines. If you do, they’ll be gone.” 53
    Readers who are mystified by the respectful attitudes often shown by Nordic entrepreneurs will be helped by a study of their U.S. counterparts done by economics writers Brian Miller and Mike Lapham. The book contains