1. Combining flexibility and security: the new labour market paradigm? Labour market reforms and macro-economic policies in the Lisbon agenda Brussels, 20-21 March 2006 Maarten Keune and Maria Jepsen European Trade Union Institute for Research, Education and Health and Safety http://www.etui-rehs.org

2. The rise of ‘flexicurity’ in Europe I  Since mid-1990s some Commission documents call for combining flexibility and security.  EES Guideline No 21: Promote flexibility combined with employment security and reduce labour market segmentation.  Vladimír Špidla underlined the importance of flexicurity strategies for employment and growth at Informal Ministerial Meeting, 20 January 2006.  Kok report: “Labour markets must be made more flexible while providing workers with appropriate levels of security.”

3. The rise of ‘flexicurity’ in Europe II  John Monks, General Secretary, ETUC “The Lisbon Strategy will never work if policy-makers decide that economic policy should take precedence over social policy. … That has clearly not been the case in some outstanding European success story countries such as Denmark, Finland, Sweden and Austria. They have promoted “flexicurity”, a concept the ETUC supports. This promotes good standards which help growth and change.”  Therese de Liedekerke, UNICE Social Affairs Department: “… our values can only be sustained if competitiveness is achieved and the issue of flexicurity is at the heart of efforts to restore a positive link between competitiveness and social protection.”

4. Flexicurity: reasons for its popularity.  Promises a solution for labour market promises that bridges the capital labour divide, a win-win strategy catering to the needs of employers and employees.  Attractive also as a way to move away from the singular flexibility-oriented discourse of the late 1980s and early 1990s.  Can create consensus among political opposites.  Is closely linked to country cases that are seen to be successful in labour market terms (NL, DK, AT).

5. Multiple possibilities to combine flexibility and security  Flexibility  External: lay-offs, temporary work, fixed term contracts.  Internal: adjustment of length of work (overtime, flexible scheduling of working time, working time accounts).  Functional: flexibility within firm through multi-tasking.  Financial: variation of pay, according to performance.  Security  Job: employment protection legislation, etc.  Employment: employability (education, training, ALMPs).  Income: protection of income through social security etc.  Combination: work-life balance.  Labour market: access to employment through high levels of employment.

6. Lack of consensus on what flexicurity is about  Wide spectrum of actors has embraced flexicurity as an abstract concept, but no consensus on:  what types of flexibility and security should be addressed and how.  how to achieve security.  how to reach a win-win situation.  what flexicurity can solve (insider-outsider, agg. employment).  Different focus  Commission: from job security to employment security; social security extended to atypical jobs.  Employers: flexibility is precondition for security.  Workers: security is precondition for flexibility.

7. Germany: Hartz reform I  Mainly about getting the unemployed into jobs through:  Ich AG self employment grant.  Personnel Service Agencies (PSA) providing temporary employment to unemployed.  Mini and Midi jobs, facilitating low-wage, short hours employment.  New benefit (ALG II) for long-term unemployed with strict take-up rules (any job is suitable), tight eligibility criteria, low benefits.  Limited training, decline number training places.

8. Germany: Hartz reform II  Caters to employers’ flexibility demands (flexible employment and flexible employees) and expects this to lead to employment creation.  More marginal, insecure and flexible employment  Little attention to employability.  No attention for the creation of more regular employment   Unbalanced approach, focusing on external flexibility and with little improvement in security

9. France: reforms under present government  Increase overtime limits and working time flexibility  Easier dismissal (equirement to previously consult unions and negotiate working time reduction abolished)  Extra assistance re-employment (long term) unemployed  Tightening of (long term) unemployment benefit criteria  Some reduction non-wage labour costs (certain categories)  Individualises and strengthens re-employment assistance in SMEs (< 1000 employees) (already existed for large ones)  Higher unemployment benefit after economic firing (limited groups, about 10%).  More flexible contracts for small enterprises (CNE), young people (CPE) older workers (above 57)   increases mainly flexibility, some employment security

10. Denmark  Basic system:  Historically combines high social security with low employment protection.  Since mid-1990s strong individualised activation and ALMP, more adult education and some reduction benefit period (but still long!).  About 3% GDP on passive policies, about 1.5% GDP ALMPs.   more employment security, less income security  Recent trends:  Reduced public support for vocational training and education  Less personalised assistance, more standardization  Sanctions and availability and mobility rules tightened (work first)   reduction employment security

11. The Netherlands  Law on flexibility and security end 1990s  Reduction employment protection  Equal treatment part-time workers in law, social security  Flexibilisation TWA sector, more rights to TWA workers  Recent reforms:  Tightening disability benefit criteria  Employability agreement (in-company training, equal opportunities and job opportunities for disabled)  Disincentives early retirement  Government proposes easier dismissal, more working time flexibility, longer working hours, restricted access to unemployment benefits and improved access to vocational training.

12. Sweden  High levels of security and employment prevail.  Emphasis in debate is on providing security in moments of inevitable change.  During the 1990s some more flexibility by introduction temporary contracts, as well as trial periods, TWA.  In 2001 some modifications to re-employment rights, seniority rules, with both (minor) positive flexibility and security effects.  Opposition and employers demand changes to labour market policies, September elections.

13. United Kingdom  After profound deregulation of Thatcher era, since 1997 modest degree of re-regulation under New Labour, partially as effect EU Directives  Welfare-to-work: compulsory activation, training, placement  employment security  Minimum wage  income security  Right to request flexible working time arrangements and better maternity and other parental leave rights  combination security, work-life balance through employee- oriented flexibility

14. Conclusions  Flexicurity is useful way to examine labour market reform  The emphasis of reforms is on increasing flexibility, with much less attention to security (exept SE).  Reforms focus on re-employment of the unemployed, not on the creation of more standard employment.  ‘New’ security: (i) the vague notion of employment security, amounting to re-employment assistance; (ii) extension of rights to non-standard rights.  Few innovative initiatives, largely ‘old wine in new bottles’  Flexicurity obscures flex-flex trade offs  What about promoting growth and employment creation?