PRIVATISATION OF PUBLIC SERVICES AND CONSEQUENCES FOR LABOUR European Experiences

1. PRIVATISATION OF PUBLIC SERVICESAND CONSEQUENCES FOR LABOUR European Experiences 19 November 2009 Toronto, Centre for Social Justice Christoph Hermann, Working Life Research Centre, Vienna

2. CONTENT OF THE PRESENTATION • Presentation of the PIQUE project • Forms of liberalisation, privatisation and marketisation • State of liberalisation, privatisation and marketisation • Company reactions • Employment, working conditions, HRM, industrial relations • Trade unions strategies • Conclusions

3. Privatisation of Public Services and the Imapct on Quality, Employment and Productivity (PIQUE) • Three-year project funded by the European Commission in the 6th framework programme • 6 countries: Austria, Beligum, Germany, Poland, Sweden, United Kingdom • 4 sectors: Electricity, postal services, local public transport, health services/hospitals • Literature and data analysis • Company case studies • Survey on users‘ perspective

4. 4 The PIQUE Consortium Working Lives Research Institute, London Metropolitan University, UK Forschungs- und Beratungsstelle Arbeitswelt,Vienna, Austria Instytut Socjologii, Universytet Warszawski, Poland Instituut voor de Overheid, K.U.Leuven, Belgium Hoger Instituut voor de Arbeid (HIVA), K.U. Leuven), Belgium Wirtschaft- und Sozial- wissenschaftliches Institut (WSI) der Hans-Boeckler-Stiftung, Duesseldorf, Germany Institutionen för Arbetsvetenskap, Göteborgs Universitet, Sweden

5. FORMS OF LIBERALISATION, PRIVATISATION AND MARKETISATION • Abolishment of monopolies • Competitive tendering • Changes in funding • Conversion into private law companies • Part and full divestment • Outsourcing, PPPs and PFI

6. STATE OF LIBERALISATION, PRIVATISATION AND MARKETISATION • Electricity: fully liberalised since 2007, oligopolistic markets, strong increase in private ownership • Postal services: full liberalisation in 2011/13, market dominance of incumbents; substantial increase in private ownership • Local public tranport: largely liberalised in Sweden and UK; concentration; international providers • Hospitals: Conversion into private law companies; changes in funding; privatisation in Germany, PFI in the UK • More privatisation than liberalisation

7. OWNERSHIP, MARKETS, REGULATION

8. COMPANY REACTIONS – Major strategies • Mergers and acquisitions • Private and foreign ownership • Internationalisation • Diversification • Focus on lucrative market segments • Profit-oriented price policy • Cost-cutting

9. COMPANY REACTIONS – Cost cutting • Reorganisation and introduction of new technology • Streamlining of supply • Reduction in employment • Payment of lower wages • Casualisation and dequalification • Intensification of work

10. SUBCONTRACTING AND OUTSOURCING: German municipal transport provider

11. EMPLOYMENT • Substantial reductions in electricity and postal services • Increase in atypical and precarious employment • Part-time and marginal part-time • Temporary jobs • Fixed-term contracts • Self-employment

12. EMPLOYMENT IN GERMAN LETTER MARKET

13. WAGE DIFFERENTIALS IN POSTAL SERVICES

14. WAGE DIFFERENTIALS WITHIN FORMER MONPOLISTS

15. WORKING CONDITIONS • Increase in work intensity and work pressures • Increase in weekly working hours • Increase in part-time hours • Increase in overtime • Increase in split work-days

16. HUMAN RESOURCE MANAGEMENT • Temporary job instead of life-long employment career • Introduction of performance-related wage components • Weakening of seniority and performance-based promotion • Differential access to training • Dequalification

17. INDUSTRIAL RELATIONS • Growing fragmentation and emergence of two- and multiple-tier labour relations systems • Differences between ‘old’ and ‘new’ employees • Differences between incumbents and new competitors • Differences between parent companies, subsidiaries and outsourced services

18. THE DISMANTLING OF THE PUBLIC SECTOR LABOUR RELATIONS REGIME

19. TRADE UNION RESPONSES • Initial phase of rejection and opposition • Second phase: concession bargaining (early retirement, golden handshakes); protection of rights for established workers, concessions for new entrants • Third phase: building broader anti-privatisation alliances with social movements; anti-privatisation referenda • At the same time: resisting further restructuring; bargaining and lobbying for social regulation (e.g. minimum wages) • Fourth phase: promoting alternatives (re-municipalisation); public service directive; rebuilding the public sector

20. CONCLUSIONS I • The commodification of public services demands for the commodification of public sector employment (use value is subordinated to exchange value) • Commodification of public sector employment = wage cuts, casualization, intensification • Growing inequality among workers as well as service users: Privatisation as class project! • Deteriorating service quality especially where quality depends on labour inputs and working conditions

21. CONCLUSIONS II • Commodification of public services is an ongoing process with no end in sight • The financial crisis will cause additional budget cuts and likely result in more outsourcing, PPPs and PFI • Pressure on public sector trade unions and workers will further increase • Services will further deteriorate • Coalitions between trade unions and social movements must be intensified and expanded • New competitors and contractors must be organised

22. FOR DETAILED REPORTS, ARTICELS AND OTHER PUBLICATIONS please visit www.pique.at or contact hermann@forba.at