Paul Lewis, The viability of flexicurity28 May 2015 WOERRC and UACES workshop on Flexicurity

Unpacking flexicurity

Types of flexibilityExternal-numerical – the number of workersInternal-numerical – the total worker-hours required in any periodFunctional – the types of activities that workers performWage – the remuneration of workers Types of securityJob security – maintain the same job with the same employerEmployment security – maintain employment through a different job, possibly with a different employerIncome security – maintain income levels, or close to them, during periods of unemployment and subsequent re-employmentCombination security – the security to balance work and personal life

(Wilthagen and Rogowski 2002; Wilthagen and Tros 2004)

The ‘common principles’ of flexicurity

1. more flexible and secure contractual arrangements, from the point of view of both employer and worker;

2. lifelong learning strategies in order to ensure workers' ongoing capacity to adapt, and increase their employability;

3. effective active labour market policies in order to facilitate transitions to new jobs

4. modern social security systems providing adequate income support during transitions.

EC emphasises that employees desire flexibility and employers security as well as the other way around.

(EC 2007;8)

A response to ‘common pressures’

A compromise solution to perceived pressures of technology and trade– Broadly neoclassical

Market adjustments Positive vision of supply-side upgrading to the

knowledge economy Security components to gain the acceptance of social

partners? (Mailand 2010)

Adjustments following the crisis

Internal-numerical flexibility more prominent than external, e.g. Germany, Austria, Norway, Belgium, Canada, Japan and Korea (see OECD 2010; Andersen 2012)

Wage adjustment also used to reduce layoffs Can flexicurity be linked to this? (European Council 2009 cited in Meardi

2012:155)

Flexicurity promotes adjustment through employment not hours

Andersen (2012), data from OECD (2010) for the period 2008-9.

Can flexicurity function in a recession?

Lack of demand challenges unemployment outflows Pressure upon Activation Programmes Costs of ALMP and UIB will automatically rise

– Fiscal capacity required ‘Six pack’ and ‘two pack’ mitigate against this

The case of Denmark

Gross flows averaged 25%, same as the US Unemployment rose more quickly than the OECD average,

adjustments were in employment not hours Average duration of unemployment increased but still

impressive– 60% re-employed in 13 weeks– 80% in 26 weeks (cohort from q3 2009)

Confidence in re-employment highest in the EU at 70% in 2010 Youth unemployment low for EU

Taken from Andersen (2012)

The case of Denmark, 2

However,

ALMP began to struggle to cope with the volume increaseToo early to assess increases in persistent unemploymentNot clear regarding the quality of transitions

– Employment security?– Long term income security?

Revisiting original premises

Is flexicurity a response to change caused by SBTC and globalisation?Work polarisation rather than upgrading (Autor et al., 2006; Spitz-Oener, 2006; Goos and Manning, 2007; Dustman et al., 2009)Industrial manual work substituted for service manual work (Nolan and Slater 2010) ‘hollowing out’ or the ‘pear shaped economy’

Revisiting original premises

Does flexibility, even when combined with security, create polarised outcomes?For low-skill occupations:Allowing companies to flex to marginal changes in demandEncouraging further de-skillingReducing employment security and long-term income security

For professional occupations:Providing opportunities for greater income through movement (VoC dependent)Opportunities for ‘combination security’? (VoC dependent)

Conclusions

We need to treat flexicurity as a clear set of policies or principles and objectives for it to have internal coherence

Very few countries can be said to have implemented it pre-crisis There are necessarily increasing fiscal commitments to such a

model post-crisis The forces of change which it was said to address have not had

the consequences envisaged for the work Its viability depends on the types of work in an economy