Social Europe: A Manifesto by Crouch Colin

Author:Crouch, Colin [Crouch, Colin]
Language: eng
Format: epub
Publisher: Social Europe Publishing
Published: 2020-07-19T16:00:00+00:00

An enhanced social-investment welfare state

Today’s advocates of the SIWS, in particular Anton Hemerijck, 7 do not speak of a cost-neutral shift from old- to new-risk policies but the need for an integrated approach. The valuable insight that social spending which improves economic quality should be regarded as investment remains but not at the expense of social protection. This marks a shift from a neoliberal to a fully social-democratic interpretation of the new policy approach.

The same adjustment can be achieved elsewhere. Job-protection rights, which assume a stability of employment in a worker’s existing organisation, are certainly becoming outmoded in a labour market subject to so much change, not to mention in economies where the need for lockdowns to combat Covid-19 has destroyed so many firms and jobs, but they have to be replaced by genuine flexicurity, where workers are supported by generous transitional unemployment pay and strong trade unions. ALMP must not be equated with workfare and negative sanctions but with positive help. Trade unions must not be regarded as part of some past of the labour market; they are now needed more than ever, in the context of changes that threaten workers at many levels, from the low-skilled to senior professionals.

A final support for citizens’ dignity in a period of difficult labour markets is a statutory minimum wage. If rigorously enforced, this has a secondary advantage of preventing the use of immigrants to drive wages down—a frequent claim of groups seeking to provoke antagonism to immigrants. There needs to be a Europe-wide component to minimum-wage strategies (adjusted of course for local costs of living) to prevent unfair competition from, and exploitation of workers within, the poorer countries of the union. The experience of countries with well-organised schemes is that they do not cause unemployment.

Opposition to the minimum wage has often come from strong trade unions, who feel that their role would be undermined if the state set and enforced minimum wages. This was the case in the UK and Germany until unions weakened, when they then became enthusiastic advocates. At present the still very powerful unions of the Nordic countries are the main obstacles to a European minimum wage. It is essential that they understand the importance of maintaining wage levels in countries without strong unions; otherwise low wages in these will eventually undermine their own strength.

So far this discussion has assumed traditional employment relationships, with identifiable employers and employees—the former having certain obligations to the latter, to maintain a safe working environment, to contribute to social-insurance schemes and to recognise laws concerning parental leave, discrimination and other rights. Increasingly firms are extricating themselves from these obligations by redefining themselves as not being employers, or not being legally based in the country where the work takes place, and redefining their workers as freelance service providers rather than employees, or keeping them on contracts that do not reach the threshold for acquiring rights. The profits of such firms are increasing at the expense of those that accept obligations as employers and pay taxes.

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