Understanding flexibility and security: towards a governance approach

1. Understanding flexibility and security: towards a governance approach Luigi Burroni and Maarten Keune

2. Structure • Historical treatment of flexibility and security through labour market and welfare regulations • Problems with the dominant flexicurity approach • Empirical illustrations from Italy • Alternative: towards a governance approach

3. From security to flexibility to flexicurity? • Since late 19th century: increased protection and security for workers for various motives • After war: mid-century compromise, welfare state in west, state socialism in East • National diversity • Since late 1970s: trend reversed, especially after end state socialism  increased flexibilisation • Today: flexicurity?

4. Emergence flexicurity discourse • Reconcile demand for further flexibilisation of the labour market with an equally strong demand for protection of employees and unemployed • Overcome traditional contraposition flexibility and security, exploit complementarities and mutually reinforcing effects between the two • Components • Ambiguity as positive feature • Link with debates ESM, EES, key role Commission

5. Problems with flexicurity discourse • Ambiguity and the unbalanced hegemonic interpretation • Core issue of complementarities: • Hard to ‘produce’ • Whose complementarities? • Different speeds of reform • Consensus? • Change over time •  Need for coordination, politics, governance • The reductionist view of flexibility and security

6. The Italian case Why the Italian case study? • The ‘rhetoric’ of flexicurity is playing an important and growing role in the political discourse in Italy during recent years • Since mid-nineties many reforms have been carried out in different institutional arena, (labour market, welfare, wage system). Thus it is a good case to test the hp of complementarity/flexicurity

7. The Italian case – Labour market reforms Massive flexibilisation of the labour market (Legge 196/96 – Legge 30/2003, etc. - introduction of temporary work, restructuring vocational training, reorganisation of apprenticeship, fixed term contracts, part time work, giving them more flexibility and set up of new kinds of contracts such as project work, agency work, and many other forms of flexible contract). The idea behind this reforms was: flexibility = competitiveness = rise in employment

8. The Italian case – welfare reforms • Massive reorganisation of the welfare system Two paths of reform emerged: • A step by step and quite effective series of attempts to restructure the current pensions system • Many attempts – and many failures – to ‘balance’ flexibility. (Chart of Jobs, ‘Commissione Onofri’, experiments of social trilateral negotiation such as the 1998 Christmas Pact (Patto di Natale), or the Agreement of July 2007 (followed by the Law n.247) Despite the ‘flexicurity discourse’ the real cognitive driver behind these reforms was the promotion of the financial sustainability of the system

9. The Italian case – the wage moderation system • Trade unions and employers associations tried to control inflation setting up a new wage moderation system that replaced the so-called 'scala mobile' • The new system has been particularly effective in promoting wage moderation and in controlling inflation • Negative impact on non-standard workers

10. Income indicators (Italian National Statistical Institute - Istat)

11. Wages of standard and non-standard workers 2007 (Ires)

12. Wages of standard and non-standard workers 2007 (Ires)

13. The Italian case Three general conclusions: • First, the Italian case is a good example of the difficulty to ‘produce’ well-functioning complementarities: many reforms have been carried out but without producing any form of virtuous complementarities in the flexicurity field • Second, the Italian case is a good example of the fact that the relevance of the concept of flexicurity in the political discourse does not mean that actors act in a way able to trigger the emergence of a balance between flexibility and security. • Third it is not sufficient to have strong social partners and trilateral social negotiation to have win-win complementarities

14. The governance approach • To explain this case it could be useful to look at logic, strategy and action of actors in various mechanisms of regulation (governance forms) such as associations, market, firms, community and the state • This means also to focus not only on idealtypical cases in which the action of a single form of governance can be found but also to study specific mix of forms of governance.

15. The governance approach • It is also important to take into account that governance architecture may vary in time: new combinations can emerge and produce new opportunities and constraints for actors • By this point of view, it is important to place governance structure in time, adopting a dynamic perspective and looking at how it can change and at the consequence of this change. • This could help to understand why in some cases complementarities emerge and not in other and to put this on a more broad debate on the recent trend of EU societies and modes of capitalism