Does the European Commission Definition of Flexicurity Favour Flexibility over Security?

1. Does the European Commission Definition of Flexicurity Favour Flexibility over Security? CICERO FOUNDATION PARIS SEMINAR 11 October 2007 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 • ‘This concept of "flexicurity" is a way of ensuring that employers and workers feel they have the flexibility, but also the security they need.’ José Manuel Barroso • ‘Je pense enfin à la nécessité de créer de nouvelles formes de flexibilité et de sécurité – ce que l'on appelle la "flexicurité".’ Vladimír Špidla (Employment Commissioner) • Renewed Lisbon strategy, Employment in Europe report, Green paper on labour law, common principles, etc. • Informal summits, Social Summit, conferences etc.

3. The concept of flexicurity • About positive and balanced combinations between different types of flexibility and different types of security • Win-win approach: catering to workers and employers • ‘Open’ concept: many ways to combine flexibility and security • Not a new way of thinking: • Gösta Rehn (WWII) • Sorge and Streek : Diversified quality production

4. Why promote flexicurity (2) • Flexicurity falls into the realm of the European Employment strategy = > first direct mention in 2006 • Main reasons for adopting flexicurity concept : • Disseminator of knowledge and ‘best practice’ • Broker of interest • Lisbon, European Capitalism and the European Social Model

5. The COM as disseminator of knowledge and ‘best practice’ • Main objectives of EES : policy-learning and policy transfer via Open Method of Coordination • Focus on employment rates : • Highest rates : NL (73.2%) and DK (75.9%) • Average EU25 : 63.8% • Flexicurity countries are NL and DK, each their own way.

6. The COM as broker of interest • Commission has role as broker between economic interest and national (political) interests. • Involvement of social partners. • Reconcile different cognitive and normative frameworks. • Call for balance between flexibility and security has always been part of the EES.

7. The COM as broker of interest • Actors do not understand the functioning of the labour market in the same manner and they might not have the same final goal • Impacts on choice of policies and way of reasoning : with change of economic climate and ideology of government the concept is understood differently. Flexicurity Market-driven allocation of employment will provide the necessary security Guaranteed rights and high job and income security

8. Lisbon, European capitalism and the European Social Model • Commitment to the ESM and that social and economic progress should go hand in hand • Apparent consensus around providing health care, education and social cohesion • Advocating modernisation of the ESM in order to face the challenges of globalisation, technological changes and demographics. • Flexicurity translates these ideas and presents it in one word.

9. The interpretation (1) • “The main thrust of the EU recommendation on flexicurity is to encourage a shift from job security to employment security” • Need for transitions and deal with segmented labour markets • Flexibility: • Flexible and reliable contractual arrangements (fixed-term, temp agency work, …) • Less employment protection (‘protecting people instead of jobs’) • Any job is better than unemployment • Security: • From protection against risk to increasing capacity to adapt • Life-long learning fostering employability • Active labour market policies • Modernization of social security systems: social security support during periods without employment; reinforcing incentives to take up jobs. • Emphasis on flexibility, not win-win approach

10. The interpretation (2) • Main idea : go from job protection towards employment protection. • Why : transitions inevitable and segmented labour markets. • How : Decrease ELP (employment protection legislation) and provide LLL and activation. • Translation : Can no longer protect against risk but need to adapt to risk = > big change for many countries.

11. The interpretation (3) • Focus on dismissal protection : Level of EPL rather than construction of EPL. • LLL : done it for 10 years and little results • Activation : focus on work-fare rather than learn-fare (job search coursed and job clubs) • Modernisation of social protection : give more incentives to work. “Social policies aimed at the underprivileged and those furthest away from the labour market” • Finances : “sustainable budgetary policies”

12. The interpretation (4) : Indicators • A : flexible contractual arrangements • EPL • Diversity of contractual + working arrangements • B Comprehensive LLL strategies • Numbers and not quality • C. Effective active labour market policies • Expenditure on active and passive labour market policies (%GDP) • Expenditure per unemployed person • D. Modern social security systems • Net replacement ratios • Unemployment traps • Number of participants in active labour market policies • Share of people not having been offered a job or activation measure. • E. Labour market outcomes • Employment rates • Youth unemployment ratio • LT unemployment rate • Growth in labour productivity • Quality in work • At risk of poverty rates

13. Balanced ? • Not balanced and hardly new. • Emphasis on economic goals instead of social goals • Social goals : capacity to change and competitive solidarity. • The discourse and broader theoretical approach is ready. • Flexibility side well developed however the security side remains blurry. • What about employment creation? Real employment security follows from high levels of employment. Flexicurity does not create employment. • Are these the right elements in order to guarantee employment security and de-segmented labour markets?? • Little scope for grand trade-offs

14. Conclusions • Steer the flexicurity debate away from its present focus on reducing job protection and increasing the use of flexible contracts • Focus more on upgrading and creating positive conditions for mobility without reducing rights • Bring employment creation back into the debate