peter auer/ilo/2009 griffith university, july 28,2009 1 « the political economy of flexicurity »...
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Peter Auer/ILO/2009 Griffith University, July 28,2009 1
« The political economy of flexicurity »
Peter Auer, Senior Fellow, IILS, ILOVisiting fellow WOS/USYD
Negotiating labour market security
Discussion points
Flexicurity: what is it?Does it work?Is it accepted?Any relevance for Australia?
Peter Auer/ ILO 2009 2
Flexicurity: what is it?
Commenting the filmResponse to globalization and flexibilization Core I: stable jobsCore II: strong labour market institutions for ensuring good transitionsCore III: social dialogue and CB
Peter Auer/ ILO 2009 3
Flexicurity: what is it?
Transforming the trade-off between flexibility and security into a complementarityfrom employment protection to labour market protectionlife cycle professional trajectories and labour market risksReform labour laws carefullyBuilding/enhancing labour market policies and institutions (e.g. PES, (A)LMPs including training and education)Using the social dialogue and collective bargaining
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From Job-to labour market security
Time
Job security* employment security** labour market security*** * Protection of a job/task in a setting of employment security
** Protection of employment within single firms but not on any particular job
*** Protection of employment in several firms combined with social protection (LM policy, social rights) for protecting transitions=flexicurity
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Does it work?Clustering flexicurity countries
clustering flexicurity
AT
DK
FI
EL
IE
NL
PT
UK
BE
FRDE
IT
ES
SE
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
-2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5
Flexibility
Secu
rity
Clustering based on 8 variables that are used as proxies for flexibility and security Flexibility: internal: working time flexibility and modern work organization; external: average employment tenure, EPL (employment protection legislation) for regular and temporary jobs. Security: LMP expenditure for 1% of unemployed, expenditure on social protection and collective bargaining coverage. (z-score clustering with equal weight for each indicator). Sources: European Foundation, OECD, ILO, Eurostat . Values:average 2000-2006 when available., otherwise last available: e.g. EPL 2003)
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Values avg. 2000-2006
FS (5) Others (10) Difference % points
Employment Rate 15-64 (ER)
72.0 63,1 +8,9
Full Time Equivalent (FTER) 15-64
64,2 58,2 +6,0
Women ER 66,9 53,8 +13,1
Women FTE 55,6 46,9 +8,7
Unemployment rate 5,4 7,2 -1,8
Productivity/Hour in Euros
29,4 Eu 27,4 EU +2,0 Eu
Productivity/Hour (2000=100)
110,3 107,6 +2,7
Gini coefficient 25,1 30,6 -5,5
Social protection effectiveness(before and after social transfer poverty reduction)
14,5 8,4 +6,1
Labour Market Policy (expenditure in % of GDP for 1% of unemployment)
0,63 0,28 +0,35
Does it work? Flexicurity countries‘ performance compared
And how do they manage the crisis? Unemployment May 2009 (5) 6,0 (10) 8,8// economic growth q4 2008/ q1 2009 : (5) -1,8 (10) -2,0
Peter Aur/ ILO 20098
Is it accepted? Critical and supporting voices:
Flexicurity is an appealing concept because it offers a way to restore a positive link between competitiveness and social protection. Globalisation and technological progress require responsiveness to deliver their full benefits, and hence finding new ways to combine social protection and economic flexibility is fundamental to more and higher-productivity jobs. (M. Stocker, advisor to Business Europe, in Euro Activ, September 2007)
To prevent « flexicurity » to become « flexploitation » the Commission should take responsiblity for shaping a strong social dimension to the internal market, guaranteeing worker’s rights and worker’s security (John Monks, ETUC, interview at the EU’s Portuguese presidency conference, Sep. 2007)
The real agenda hiding behind 'flexicurity' simply seems to be the dismantling of job protection.... (R. Janssen, from ETUC , Euro-Activ, September 2007).
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Manifestation in front of Portuguese EUconference on Flexicurity October 2007 : … »the government lies : Flexicurity=dismissals » « No development for Portugal with flexi-curity »
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Critics of activation
French Communist party (PCF)
Postcard 50s
10
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Political economy questionsFlexicurity seems to work with different degrees of external flexibility and the „flexicurity countries“ in the EU 15 have good economic, social and labour market performance Why then opposition?
• Job/employment protection „red line“ for unions• Financing of compensatory social protection
difficult under tight budgets• LM policy often not positively evaluated• Resistance to model transfer: no one size fits all
and path dependency of reforms• An anticipated compromise not in line with
adverserial settings/ low trust between the SPs• Uncertain applicability in other than European
welfare state countries• LM Context counts a lot• EU Commission as policy driver faces low
approuval rates
Peter Auer/ ILO 2008 12EMP/ANALYSIS 209 12
Figure 1.1 Average Job Tenure in Years EU-15 for 1992 and 2005
Un
ited
Kin
gd
om
Ire
lan
d
De
nm
ark
Sp
ain
Au
stri
a
Fin
lan
d
Ge
rma
ny
Sw
ed
en
Ne
the
rla
nd
s
Lu
xem
bo
urg
Ita
ly
Fra
nce
Be
lgiu
m
Po
rtu
ga
l
Gre
ece
0
2
4
6
8
10
12
14 1992 2005
EU 15 average: 1992 10,48 2005 10,74 (Japan 12 (2000) , USA 6,9 (2004)
Flexicurity with different employment tenure
Any relevance for Australia?Australia: major recent example of labour market deregulation and reregulation: from work-choices to fair work AustraliaDifficult way back from Howard government Reform, and interesting political economy
Vast exercise of social dialogueNew labour market institutions:
• Both on procedures and laws: CB, FWA, unfair dismissal
• And substantive policies, programmes and delivery organisations: UI benefits and ALMP (training)
Peter Auer/ ILO 2009 13
Flexicurity debate is relevant for Australia
no way around a real dialogue and participation resulting in good procedures and substantive policies for a socially embedded economy,Which provides for labour market security allowing individuals and firms to adjust to the ups and downs of the global economy and to find satisfying personal professional trajectories in performing economies.
Peter Auer/ ILO 2009
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