Labour market flexibility in West Germany,Britain and France

To resolve the high unemployment rates in many Western European countries, the notion of labour market flexibility has been gaining favour with academics and policy‐makers. This article examines the notion of labour market flexibility in detail and assesses the extent to which it has been implemented in West Germany, Britain and France. It is argued that the most significant developments towards flexibility have occurred in Britain because of the Thatcher government's commitment to neo‐liberal economic policies and because the ‘voluntarist’ British industrial relations system does not represent a barrier to the pursuit of such a policy. By contrast, there has been only a partial incorporation of flexibility initiatives within Germany and France largely because no government in either country has been committed to a full neo‐liberal assault in the existing dense array of national industrial relations institutions, norms and legislation. The article also assesses the extent to which labour market flexibility represents a coherent and workable approach to the challenge of resolving unemployment. In several important respects, we find it an inadequate policy to help restore employment growth in Western Europe.     

Political-economic aspects of public employment

Abstract. An examination of public employment and expenditure data for 17 OECD countries for the period 1963–1983 reveals decelerating growth in public employment after 1970, whereas expenditure growth rates have been accelerating. Two contrary tendencies in public sector employment since the early 1970s are apparent: a general decline in goods and market services, and a significant increase in communal and social services. Comparative empirical analysis, using a pooled cross section-time series technique, confirms the important contribution of increasing wealth to public employment growth. Similarly, a strong societal position for organised labour and increasing unemployment rates contribute to public employment growth, thereby suggesting the presence of a discretionary stabilization policy. Contrary to expectations, however, increased trade dependence exerts a negative impact. With regard to the relationship between expenditure and employment, a general increase in the employment creation efficiency of spending can be discerned. Empirical estimates again suggest that the importance of labour in political-economic decision-making has intensified the employment creation effect of public spending.     

The Third Way: the Dutch experience

The Third Way in the Netherlands rests upon the institutionalized co-operation between the trade unions, the employers' organizations and the state. During the period of high unemployment in the 1980s this co-operation led to several agreements to moderate wage costs and to reduce statutory working hours with the object of reducing unemployment. In the 1990s,when labour became scarce, new measures were agreed upon to increase participation in the labour market and to boost productivity. Critics of the agreements suggest that the policies adopted by the socio-economic partners in the 1980s, particularly the moderation of wages and the reduction of work time to create more jobs, have a negative effect on the long-term prospects of attaining higher productivity.     

Assessing labour freedom in agriculture: Developing world perspective focusing on India

This piece of work evaluates the choices and opportunities opened up in rural labour market through institutional reforms and developmental policies fostering agricultural growth and efficiency in developing countries, with a focus on India. It finds that policy reforms on property rights, involving legal approvals of land ownership or partial possession with rental contracts, strengthen bargaining capacity among marginalized groups. Furthermore, an inclusive development policy encompassing the rural sector shapes labour freedom by stabilization of market at desirable wage and employment rates. Considering a case example from an advanced agricultural region in India, this study reveals a positive and significant relationship between intensity of labour freedom and land-based status of peasant households. The analysis of primary data suggests that labour market reforms, particularly those focused on wage contracts and minimum wage laws, off-farm jobs and intra-migration employment opportunities before labourers, are crucial indicators for enhancing labour freedom in rural areas.     

Is South Korea as Leftist as It Gets? Labour Market Policy Reforms under the Moon Presidency

Considering its conservative past, South Korea is undergoing an unprecedented turn to the left. Since priority was given to economic growth from the 1960s until the beginning of the 1990s, a close alliance between big business and government has characterised the country's labour market. Since the 1997 financial crisis, however, two decades of liberal and conservative governments have pushed a neoliberal agenda of labour market flexibilisation, which has resulted in growing inequality in a dualised labour market and left the trade unions in a marginal role. Following a rapid turn of events that led to the impeachment of conservative president Park Geun‐hye, left‐leaning President Moon Jae‐in seems determined to roll back this legacy of labour oppression with the strong support of trade unions and young voters. His administration is pushing for policy change with a series of expansionary active labour market policies aimed at promoting stability and full‐time employment. This article highlights the social‐democratic character of these reforms and the constraints in implementing them.     

‘New politics’ in German labour market policy? The implications of the recent Hartz reforms for the German welfare state

The twin predicaments of German labour market performance and welfare state performance triggered an ongoing debate on reforming the German model. Recently, this debate has yielded an outcome in the form of the so-called Hartz laws, a bundle of labour market policies aimed at the reduction of unemployment and the decrease of non-wage labour costs. The Hartz reforms have played a prominent role in the public discussion, but are they really a watershed as both optimists and pessimists claim? In this article we investigate in what sense the Hartz reforms mark a substantive political change and how they are related to similar processes in other countries. To characterise the policy output we discuss three views of policy reform: reform as a process of policy-learning, reform as a process of competitive realignment and reform as a process of reinforcing path dependence. We show which of the three paradigms accounts for which part of the political result. We find evidence for both policy diffusion and retrenchment, but it is too early to speak of a change of regime. Rather, both the changes thus far and the blocked proposals follow a traditional German logic of strong institutional resistance.     

From 'welfare without work' to 'buttressed liberalization': The shifting dynamics of labor market adjustment in France and Germany

Abstract.  During the past decade, prevailing scholarship has portrayed France and Germany as suffering from a persistent syndrome of 'welfare without work' entailing a vicious circle between stubbornly high rates of unemployment and non-wage labor costs. Scholars blame this disease on dysfunctional political arrangements, deep insider-outsider cleavages and failed systems of social partnership. As a result, the two countries are said to be more or less permanently mired in a context of high unemployment that is highly resistant to remediation. This article departs from this conventional wisdom in two important respects. First, it argues that France and Germany have undertaken major reforms of their labor market policies and institutions during the past decade and remediated many of their longstanding employment traps. Second, it shows that the political arrangements that adherents of the 'welfare without work' thesis identify as reasons for sclerosis have evolved quite dramatically. The article supports these arguments by exploring some of the most significant recent labor market reforms in the two countries, as well as the shifting political relationships that have driven these changes. In both countries, recent labor market reforms have followed a trajectory of 'buttressed liberalization'. This has involved, on the one hand, significant liberalization of labor market regulations such as limits on overtime and worker protections such as unemployment insurance. On the other hand, it has entailed a set of supportive, 'buttressing' reforms involving an expansion of active labor market policies and support for workers' efforts to find jobs. The article concludes that these developments provide reasons for optimism about the countries' economic futures and offer important lessons about how public policy can confront problems of labor market stagnation.     

Labor market policy: A comparative view on the costs and benefits of labor market flexibility

I review theories and evidence on wage‐setting institutions and labor market policies in an international comparative context. These include collective bargaining, minimum wages, employment protection laws, unemployment insurance (UI), mandated parental leave, and active labor market policies (ALMPs). Since it is unlikely that an unregulated private sector would provide the income insurance these institutions do, these policies may enhance economic efficiency. However, to the extent that unemployment or resource misallocation results from such measures, these efficiency gains may be offset. Overall, Scandinavia and Central Europe follow distinctively more interventionist policies than the English‐speaking countries in the Northern Hemisphere. Possible explanations for such differences include vulnerability to external market forces and ethnic homogeneity. I then review evidence on the impacts of these policies and institutions. While the interventionist model appears to cause lower levels of wage inequality and high levels of job security to incumbent workers, it also in some cases leads to the relegation of new entrants (disproportionately women, youth, and immigrants) as well as the less skilled to temporary jobs or unemployment. Making labor markets more flexible could bring these groups into the regular labor market to a greater extent, at the expense of higher levels of economic insecurity for incumbents and higher levels of wage inequality. © 2011 by the Association for Public Policy Analysis and Management.     

THE DIMMING OF ILLUSIONS: CHANGING ATTITUDES OF LABOURERS TO DIRECT GOVERNMENT EMPLOYMENT ON NSW PUBLIC WORKS, 1899–1916*

Abstract: Direct employment on public works (or day labour) was a powerful symbol of the possibilities for reform within capitalism in the early years of this century. It promised not only more work at times of high unemployment, but better conditions of employment. Further, there was the possibility of labourers, through their unions, having much greater control of their working lives. The major political battles were over whether governments should use day labour or contract. But, for the labourers themselves, the question of the nature of the administration of day labour became an increasingly important one. A sympathetic administration, such as that under E.W. O'Sullivan, not only meant great practical benefits for labourers; it served also as an example of what was possible through developing an alternative model of dealing with capitalist crises. However, in the case where a Labor government was unwilling to challenge the weight of traditional bourgeois economic thinking, day labour lost any pretence of being either model employment or a symbol for the future. In 1910–16, when labourers already had raised expectations of what day labour promised, such administration meant a growing alienation of labourers and their unions from the Holman Government and from Labor's parliamentary road in general.     

Tackling unemployment in China: state capacity and governance issues

Abstract

This paper considers China's state capacity and changing governance as revealed through its policies to tackle unemployment. Despite high levels of growth, economic restructuring has resulted in rising unemployment over the last decade. The Chinese state has been able to manage job losses from state enterprises, demonstrating some state capacity in relation to this sector and some persistent command economy governance mechanisms. However both design and implementation of policies to compensate and assist particular groups among the unemployed have been shaped by weak state capacity in several other areas. First, capacity to gather accurate employment data is limited, meaning local and central governments do not have a good understanding of the extent and nature of unemployment. Second, the sustainability of supposedly mandatory unemployment insurance schemes is threatened by poor capacity to enforce participation. Third, poor central state capacity to ensure local governments implement policies effectively leads to poor unemployment insurance fund capacity, resulting in provision for only a narrow segment of the unemployed and low quality employment services. Although the adoption of unemployment insurance (and its extension to employers and employees in the private sector), the introduction of a Labour Contract Law in 2007, and the delivery of employment services by private businesses indicate a shift towards the use of new governance mechanisms based on entitlement, contract and private sector delivery of public-sector goods, that shift is undermined by poor state capacity in relation to some of these new mechanisms.     

Effective Unemployment Counteraction as a Determinant of National Security

Management process, which is an attempt to cater for an infinite number of human needs with a finite number of production factors, takes place in a closed flow of money and goods. Labour market, characterized by a high level of entropy, is one of the elements of this flow. In the view of the disorder which presents in the labour market, it is understandable that the state intervenes in this market. Interventionism usually takes place in such areas of the economic policy as employment policy and labour market policy. When state intervention in this market is characterised by economisation, which means making activities more efficient or more economical, the level of the national security is rising. This is due to the fact that the unemployment rate actually decreases and the amount of funds earmarked for interventionism, which come from non-repayable obligatory public levies is optimized.     

Parteien, Vetospieler und der Wettbewerb um Wählerstimmen: Die Arbeitsmarkt-und Beschäftigungspolitik der Ära Kohl

The paper develops a model to explain the labour market and employment policies of the Christian-liberal coalition in Germany between 1982 and 1998. It takes partisan theory as its starting point, but expands it by taking into account the effects of party competition and veto players as well. For the first period of observation, the years 1982 to 1989/90, only moderate reforms can be observed. This can be explained by the fear of the coalition that more far-reaching reforms could exert negative effects on its electoral performance on the one hand, and by the strong influence of the labour union wing of the Christian democratic party on the respective policies on the other hand. During the first years after German unification the government could not implement far reaching partisan reforms either. This was due to the necessity of reacting to the external shock of the unification and the problems associated with it. Only during the last three years in office the coalition was able to push through more coherent reforms due to the huge problems on the labour marker which put the government’s re-election at risk. These reforms could be carried through because the CDU’s labour wing had lost its veto power and because the Bundesrat’s approval was not necessary.     

Migrant Workers or Working Women? Comparing Labour Supply Policies in Post-War Europe

ABSTRACT

Why did some European countries choose migrant labour to expand their labour force in the decades that followed World War II, while others opted for measures to expand female employment via welfare expansion? The paper argues that gender norms and the political strength of the left were important structuring factors in these choices. Female employment required a substantial expansion of state intervention (e.g. childcare; paid maternity leave). Meanwhile, migrant recruitment required minimal public investments, at least in the short term, and preserved traditional gender roles. Using the contrasting cases of Sweden and Switzerland, the article argues that the combination of a weak left (labour unions and social democratic parties) and conservative gender norms fostered the massive expansion of foreign labour and a late development of female labour force participation in Switzerland. In contrast, more progressive gender norms and a strong labour movement put an early end to guest worker programmes in Sweden, and paved the way for policies to promote female labour force participation.     

A Bonfire of the Regulations,or Business as Usual? The UK Labour Market and the Political Economy of Brexit

Employment and labour market regulation initially appeared as one of the solid red lines in the UK's renegotiation of the country's place in the EU. The basic argument is that the UK's more deregulated labour market would sit uneasily in the more organised models, based on statutory instruments or collective bargaining, found on the continent. While there is a legitimate problem here, EU employment regulations appear manageable from the point of view of business, while unions see them as important tools for socially responsible economic restructuring. Most of UK employment case law is now deeply entangled with EU law; labour market regulations have, on the whole, become part of the way of doing business in the Single Market; and a simple cost–benefit analysis appears impossible because some costs are not quantifiable and the costs of others are reduced when taken as a bundle. Labour unions agree that transposition of European law needs to be done taking into account local sensitivities, while internationally oriented companies do not see EU regulations on the whole as detrimental to business. Importantly, though, the costs and benefits of EU employment regulations are not symmetrically distributed across different companies: large companies are better able to reap the rewards and accommodate the costs of operating in the Single Market than smaller companies.     

Economic liberalisation,market institutions and labour rights

What effect do pro‐market economic policies have on labour rights? Despite significant debate in policy and academic circles about the consequences of economic liberalisation, little is known about the labour rights effects of pro‐market policies. Extant literature has focused only on the possible outcomes of market‐liberalising policies, such as trade and investment flows, rather than directly assessing market‐friendly policies and institutions. Moreover, this line of research has found mixed results on how these outcomes influence labour conditions. To provide a comprehensive assessment of this linkage, this article combines data on five distinct policy areas associated with economic liberalisation with data on labour rights for the period 1981–2012. The results indicate that pro‐market policies – except the ones involving rule of law and secure property rights – undermine labour rights. Thus while there are some positive economic and political outcomes associated with market‐supporting policies, economic liberalisation comes at the cost of respect for labour rights.     

How to Achieve a More Resource‐Efficient and Climate‐Neutral Energy System by 2030? Views of Nordic Stakeholders

The Nordic countries pursue ambitious energy transition goals through national energy policies and in the framework of Nordic cooperation. We propose that the transition is realistic only if it involves the public, private, and nongovernmental organization sectors as regulators, innovators, and advocates of relevant policies and solutions representing the multitude of interests involved. We examine these interests through Q methodological experiments, where 43 expert stakeholders’ rank‐order statements concerning their preferred policy measures vis‐à‐vis the electric energy system. Factor analysis of these subjectively held views produces three distinct views. The first two enjoy strong inter‐Nordic support. The first view prioritizes market and grid development, and the second view prioritizes electric transport, and solar and wind power. The third, “Finnish” view seeks to enhance security of supply, also via microgrids, and prioritizes biofuels over electric transport. Examining the common ground among the three views, we find that enhanced cooperation requires reinforced stakeholder interaction and policy coordination.     

Between workfare and enablement – The different paths to transformation of the welfare state: A comparative analysis of activating labour market policies

Abstract.  The concepts that address different paths to transformation of the welfare state as a 'workfare', an 'enabling' or an 'activating' state share the idea that traditional welfare policies, mostly aiming at decommodification, are more and more replaced by social policies emphasising (re-)commodification. Activating labour market policy therefore is supposed to play a central role within the paradigm shift of welfare state policies. It is understood to involve a mix of the enforcement of labour market participation, the conditioning of rights and growing obligations of the individual at one side, and an increase of services in order to promote employability and restore social equity at the other. In this article, the different perceptions of the workfare and the enabling state perspectives on the positive and negative aspects of activating policies are reconstructed as 'pure forms' in order to obtain theoretical standards against which the empirical cases of activating labour market policies in Denmark, the United Kingdom and Germany are characterised and compared. The actual reform path is described by a combination of two indicators: the strength of the workfare and the strength of the enabling elements of the activating labour market policies. The evidence on activating labour market reforms confirms that in both dimensions a move in the same direction is taking place, but without producing growing convergence. Different welfare state types keep on producing different mixes of workfare and enabling policies, leading to very different levels of decommodification and (re-)commodification. Thus, an ongoing divergence of policies also exists within the new paradigm of an activating labour market policy, although single countries seem to change their alignment to a particular welfare state type.     

Impact of labour attributes and probability of employability in Indian labour market: A sectoral analysis

The structural transition of an economy helps the nations to move from primary to secondary and then to tertiary sector for the total output and employment generation. However, the absence of this systematic structural transition could lead the nation into long‐term imbalances for employment and output. This is happening with India as its economy has directly moved from primary to tertiary sector for both output and employment generation. The present study helps to identify the main reasons about why India is still stagnating with its sluggish primary sector for employment generation. This will also show the existing pattern of occupational choices for the people of different labour attributes. The study usages the fourth and fifth survey of employment and unemployment conducted by the Labour Bureau in 2012–13 and 2014–15 over 1,087,968 individuals of India. The study applies both multinomial logit model and binary logit model for analysing the employment probabilities of the individuals for working in the primary, secondary, and tertiary sectors. The study finds that location and education are the most important factor affecting the employment choices of the individuals, whereas caste and gender are also important but with moderate impact. The location is found crucial factor for primary and secondary sector occupation, whereas secondary sector is neutral in this regard. The service sector is found to have the highest incidences of caste discrimination and favouritism in the labour market. The education has the highest impact on the service sector jobs.     

Understanding the education gap in immigration preferences across countries over time: A decomposition approach

The structure and dynamics of the education gap in immigration preferences are not well understood. Does the gap increase when the economy contracts? To what extent does the gap reflect labour market conflicts versus value polarization? Does the structure of the gap change with labour market and refugee shocks? I use European Social Survey data to decompose the gap into parts reflecting labour market position, social background, and value orientation, and explore how their importance in accounting for the gap change over time. I find no uniform trends in preferences or in the size of the gap, but the gap varies with the unemployment rate and the strength of trade unions. Moreover, positions in the labour market are more important for the gap in times of high unemployment, at the expense of the importance of value orientations. The results show the enduring importance of labour market conflicts for the gap.     

The Labour Market Regimes in the Nordic Countries: A Comparative Analysis

The aim of the article is to discuss the differences between the labour market regimes in Denmark, Norway, Sweden and Finland in a historical perspective. The foundations of the regimes were laid more than 100 years ago. Differences in labour market institutions and practices are in fact substantial, particularly as regards the role of the state in collective bargaining and conflict resolution, but also in connection with incomes policy. While the state for a long time has played a significant role in Denmark and Norway, mainly concerning conflict resolution, and in Finland since the 1960s in the form of comprehensive incomes policy agreements, a doctrine of freedom of the labour market from state intervention has dominated in Sweden. These divergences can to a great extent be explained by differences in the democratization process and the organizational structure, particularly in the trade unions, which reflect different timing and structure in the process of industrialization. 'Path dependency' has been strong in the North. The main elements of the four national labour market regimes are still there, such as trade union fragmentation and strong instruments for conflict resolution in Denmark and Norway, relatively advanced social partner responsibility for bargaining outcomes and conflict resolution in Sweden (although sometimes against the background of threats of state intervention), and almost continuous tripartite consultation in Finland as a stabilizing element in a much more turbulent political environment than in the neighbouring countries. There are no clear tendencies towards convergence between the Nordic labour market regimes.