Two issues usually form the starting point for these debates:
Firstly: how can the escalating costs of welfare be contained?
And secondly: how can the unemployed be eased back into the labour market without falling foul of the many 'benefit traps' and 'poverty traps' which bedevil the current system?
This new report, published on February 26th by the Citizen's Income Trust, takes a rather different perspective. It starts from the economic goal of increasing labour market flexibility, which is the stated aim not only of EU policy but also of many individual member states, and asks: How can working patterns be made more flexible, while still guaranteeing a minimum standard of security for the European workforce?
Ursula Huws, the report's author, is the director of the social and economic research consultancy Analytica and an Associate Fellow of the Institute for Employment Studies. She has been studying the restructuring of labour markets for many years and concluded that under most existing systems, workers who accept flexible conditions frequently end up paying a high price for this in the form of greater precariousness, lower earnings, and fewer benefits than their colleagues in full-time, permanent employment. Even when it is recognised that flexible working patterns can contribute to job creation, to equal opportunties and to improved economic competitiveness, there is therefore a resistance on the part of the workforce to accepting these new forms of work.
Some of the anomalies which an effective social policy will have to address include:
+ how can we avoid a polarisation of society into 'no-earner' and 'two-earner' households (with the children being deprived of money in the first type and of attention in the latter)?
+ how can effective unemployment benefit and pension schemes be devised for workers whose hours of week vary from one week to the next and who may be in and out of temporary employment?
+ how can the informal economy be formalised and brought within the tax system?
+ how can the goal of 'lifelong learning' be achieved without workers suffering periods of hardship when they are studying?
+ how can the self-employed be given a level of social protection which are comparable with that of employees?
This study, which is based on a detailed comparison of four contrasting European welfare models (in Sweden, Germany, Greece and the UK), concludes that a fundamental reform of these welfare systems will be required if flexible employment is to become acceptable to the majority of the workforce, and developed in a way which avoids social exclusion, insecurity, inequality and low pay.
While it does not pretend to have all the answers, it raises important questions which must be addressed if the present reform of the welfare state is to be carried out in a way which is compatible with economic, as well as social goals.
The report is available, price £5, from the Citizen's
Income Trust,
Citizens Income Study Centre
St Philips Building
London School of Economics
Sheffield Street
London WC2A 2EX
telephone: + 44 (0)171 955 7453
fax: +44 (0)171 955 7534
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