monitoring flexicurity policies in europe from three different viewpoints
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Monitoring flexicurity policies in Europe from three different viewpoints. Based on papers www.boeckler.de/pdf/p_wsi_disk_145.pdf also: 122.pdf, 131.pdf, 137.pdf, 141.pdf, and 143.pdf. - PowerPoint PPT PresentationTRANSCRIPT
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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Monitoring flexicurity policies in Europe from three different viewpoints
Privat dozent, Dr.Sc., Dr. Andranik Tangian Hans Böckler Foundation, D-40476 Dü[email protected]
Based on papers www.boeckler.de/pdf/p_wsi_disk_145.pdf
also: 122.pdf, 131.pdf, 137.pdf, 141.pdf, and 143.pdf
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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Agenda
1. Flexicurity as flexibility-security trade-off
2. Tracing flexicurity trade-off with a matrix
3. Monitoring flexicurity in a vector space
4. Neo-liberal perspective
5. Trade-unionist viewpoint
6. European-welfare-state viewpoint
7. Policy implications
8. Conclusions
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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1.1 Flexicurity as flexibility-security trade-off: Definition
[Flexicurity is] a policy strategy that attempts, synchronically and in a deliberate way, to enhance the flexibility of labour markets, work organization and labour relations on the one hand, and to enhance security — employment security and social security — notably for weak groups in and outside the labour market on the other hand
(Wilthagen 1998–2004)
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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1.2 Flexicurity as flexibility-security trade-off: Flexibility types
External numerical flexibility, easiness of ‘hiring and firing’
Internal numerical flexibility, easiness to change working hours
Functional flexibility, easiness to charge employees with different work
Wage flexibility, easiness to adjust the wage to individual performance
Externalization flexibility, easiness to hire workers without employment contracts
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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1.3 Flexicurity as flexibility-security trade-off: Security types
Job security, protection against dismissals and major changes of working conditions
Employment security, equivalent vacant jobs, training, work-work transitions
Income (social) security, unemployment & health insurance, pensions, maternity leave
Combination security, compatibility of work with other activities, work-life balance
2.1 Tracing flexicurity trade-off with a matrix: Wilthagen & Tros 04
Job security Employment security
Income security Combination security
External numerical flexibility
Firm-firm job pools
Facilities work-work transitions
Older enterployees
Retirement arrangements
Internal numerical flexibility
Part-time work
Flexible retirement
Part-time enterployees
Flexible retirement Part-time retirement
Flexible age (pre-pension
Flexible working hours
Leave facilities
Functional flexibility
Education/training
Adaptation in working hours/ tasks
Education/training
Seniority/bridge works
Job rotation
Age-aware cereer and job structures
2.2 Tracing flexicurity trade-off with a matrix: Dutch law
The Dutch Law on Flexibility and Security 1.1.99 (Wilthagen & Tros 2004)
Flexibility Security
Adjustment of the regulation of fixed-term employment contracts: after 3 consecutive contracts or when the total length of consecutive contracts totals 3 years or more, a permanent contract exists (previously this applied to fixed-term contracts that had been extended once)
Introduction of so-called presumptions of law which strengthen the position of atypical workers (regarding the existence of an employment contract and the number of working hours agreed in that contract); the existence of an employment contract is more easily presumed
………………………………………………………………………………………
Policy measures are aimed at either flexibility or security but the matrix elements require both simultaneously
Strictness of EPL, in %
Social security, in %
Util
ity
3 Monitoring flexicurity in a vector space
Pareto-worsening is indepen-dent of the utility function:Knowledge of social utility function is not always necessary
4 Neo-liberal perspective S
oci
al s
ecu
rity,
in %
Strictness of EPL, in %
Deregulation-only instead of flexicurity (except NL and DK in mid 1990s)Explanation: Flexibilization disqualifies workers from social benefitsViolation of flexicurity concept
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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5.1 Trade-unionist viewpoint: Critics of neoliberals
At the neo-liberals’ playing field everything can be bought and sold by default (!)
Social health (= the right to remain at work) is exchanged for a treatment (= social security): give your hand, and get a prosthesis instead
Flexicurity leads to liberalization but also is an indirect governmental donation to firms from the tax-payer’s money
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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5.2 Trade-unionist viewpoint: Definition of flexicurity
[Flexicurity is] a social protection for flexible work forces as ‘an alternative to pure flexibilization’ (Keller and Seifert 2004)
Strictness of EPL, in %
Social security, in %
Util
ity
5.3 Trade-unionist viewpoint:No trade-offs
lexico-graphic preference (absolute priority of one factor over another) has no trade-offs
So
cia
l sec
urit
y, in
%
Strictness of EPL, in %
5.4 Trade-unionist viewpoint: PlotAverage improvements in social security of flexibly employed due to transitions from regular employment does not make trade unions very happy: Gains are smaller than losses and winners are fewer than loosers
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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5.5 Trade-unionist viewpoint: Inconsistency with neo-liberals
Preferences of neoliberals and trade unions differ in the type of preference (a lexicographic preference with no trade-offs)
Wilthagen and Tros (2004): “Some recent studies are pessimistic that appropriate trade-offs can be found between flexibility and security”
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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6.1 European-welfare-state view-point: micro-census simulation
Estimate the national average of Net-Income Replacement Rate (NRR) for unemployed to show how social benefits compensate the loss of previous earnings
Individual answers of unemployed are (normatively) computed with the OECD Tax-Benefit Models
The empirical data on personal situations are available from EuroStat‘s Labour Force Survey
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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6.2 European-welfare viewpoint: 103950 groups „interviewed“
22 European countries 7 years: 1995, 1997, 1999, 2001 - 2004 5 age levels: 20±5, … , 60±5 years 3 Family types: single, one-earner couple,
and two-earner couple Number of children: 0-4 6 wage levels: 40, 50, 67 , … , 200% APW 9 levels of duration of unemployment: 0,
<1, 1-2, 3-5, 6-11, … , 48 and more months
6.3 European-welfare viewpoint: Total decline in 2004
6.4 European-welfare viewpoint: Cause is the structural change
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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7.1 Policy implications: Inconsistency of EU policies
European Welfare-State policy Flexibilization for sustainable development Flexicurity (trade off between flexibilization
and social security) Policy Make Work Pay (trade-off between
income protection and gain from work) Civil Society Policy coordinated with NGO’s
and trade unions
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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7.2 Policy implications: Two proposals
The bottle-neck is the social security system
Social security, as it is, can hardly be improved (institutional improvements fail)
Possible solution: basic income (BI) together with flexinsurance (FI)
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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7.3 Policy implications: Basic Income
A flat income paid by the state to all citizens regardless of their earnings and property status
Traces of this model appear in social security branches like child care allowances (Kindergeld in Germany paid to all parents) or old-age provisions (Switzerland)
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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7.4 Policy implications: Flexinsurance
The employer's contribution to social security is proportional to the flexibility of the contract. Thereby a higher risk of becoming unemployed is compensated
Such progressive contributions stimulate employers to hire employees more favorably, without however rigidly restricting the labour market flexibility
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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7.5 Policy implications: BI & FImake EU policies consistent
Development of European Welfare Policy
Additional budget comes from flexinsurance higher taxes of high-earners (to subtract the
flat income) and funds released from an army of civil servants
currently working in social security
Fair compensation of Flexibilization according to the Flexicurity policy
Facilitates the Make Work Pay policy (moving to work always brings a gain)
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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8 Conclusions: Flexicurity indices and empirical observations
Flexicurity indices allow us to monitor flexicurity policies from neo-liberal, trade-unionist and European-welfare-state perspectives.
Flexicurity does not hold up to its political promises and theoretical declarations from three viewpoints
A possible solution assumes a radical reform of the European social security systems (Basic Income) and a „regulation of the deregulation“ of labour markets with Flexinsurance
Permanent employment Fixed-term employment Collective dismissals Late 1980s Late 1990s Late 1980s Late 1990s Late 1990s Score 0–6 Score 0–6 Score 0–6 Score 0–6 Score 0–6 Germany 2 7 2 8 3 8 2 3 3 1 Austria 2 6 2 6 1 8 1 8 3 3 Belgium 1 5 1 5 4 6 2 8 4 1 Switzerland 1 2 1 2 0 9 0 9 3 9 Czech Republic 2 8 2 8 0 5 0 5 4 3 Danemark 1 6 1 6 2 6 0 9 3 1 Spain 3 9 2 6 3 5 3 5 3 1 Finland 2 7 2 1 1 9 1 9 2 4 France 2 3 2 3 3 1 3 6 2 1
Annex 1: OECD’s index Strictness of EPL (1999, 2004)
Andranik Tangian First Meeting of Flexicurity Research Network, Copenhagen, June 8-9, 2006
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Annex 2.1: Subindices of Social Security
1. Unemployment insurance
2. Public pensions
3. Paid sick leave
4. Paid maternity/parental leave
5. Paid holidays (usually not considered)
Annex 2.2: Social Security subindex of Unempl. Insurance
Conditions Employment type
Per
man
ent f
ull-
tim
e
Per
man
ent p
art-
tim
e
Fix
ed-t
erm
ful
l-tim
e
Fix
ed-t
erm
par
t-ti
me
Ful
l-ti
me
self
-em
ploy
ed in
ag
ricu
ltur
e
Ful
l-ti
me
self
-em
ploy
ed
not i
n ag
ricu
ltur
e
Par
t-tim
e se
lf-e
mpl
oyed
in
agri
cult
ure
Par
t-tim
e se
lf-e
mpl
oyed
no
t in
agri
cult
ure
Germany 12 months in last 3 years or 6 months if a seasonal worker
2(5) 2(5) 2.5(6) 2.5(6) 6(12) 6(12) 6(12) 6(12)
Austria 52 weeks in past 24 months and earnings 309 EUR
2(5) 2.5(6) 3(8) 3(8) 6(12) 2(5) 6(12) 2.5(6)
…………………………………………………
Size of employment groups, in % to total employment (EuroStat)
Annex 2.3: Security index. Accounting the size of employ-mentgroups
(Germany)