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Existing welfare systems are increasingly under attack and risk to become unsustainable as a result of growing pressures from globalization, economic integration, transition to the service economy, the imperatives of drastic reductions in public deficits and debts, slow growth or even recession, the rapid demographic ageing of the population, changing structures of families and the shrinking of the labour force at both ends of the spectrum, to mention but the most obvious risks.

One key policy question is whether the welfare systems associated with the European social model sustainable, and if so, how?

This concern underpinned a study just published by the Geneva-based International Social Security Association ISSA, in the OECD region, on the policy implications of the labour market and social protection nexus, which aims at:

• Better understanding of the success or failure factors of welfare reforms.
• Raising awareness among social and labour policy experts about policy synergies that transcend their respective spheres.
• Encouraging an informed debate among all stakeholders — policy-makers, social actors, academics and civil society.

The complex relationship between labour markets and welfare systems is a crucial element in the design and implementation of public policies to promote employment and expand social security coverage. Why?

Because employment patterns affect people’s access to welfare benefits, while the rules determining access of people to benefits influence decisions regarding employment of both employers and workers.

The study pinpoints to the major labour market shifts of the past three decades, which drastically reversed in the 1970s the basic parameters that underpinned the Welfare State.

This was the prevalence of full-time life-long jobs of male breadwinners, with broad income guarantee for them and their dependant families in case of short stints of unemployment.

Labour markets have become more precarious, more feminized, in some countries more unequal, and throughout the OECD older, while the traditional composition of families dramatically changed — challenging the viability and broad coverage of the population by existing welfare systems.

A few figures to illustrate these trends: EU unemployment almost trebled over the past 3 decades, rising from 4% in 1970 to 11% in 1994, remaining above 8% by 2002; the incidence of long-term unemployment is double or treble national average across OECD; employment rates in the EU fell from 64.1% in 1970 to 61% by 1994, and still lag behind potential, hitting prime age women, youth and male workers aged over 50. "Atypical", often precarious, jobs increase rapidly to about a third of the working population.

In response, Welfare States are being reformed, scaled back and modernized, but still fail to get to grips with long-term unemployment, youth unemployment, social exclusion aggravated by inadequate social coverage, and the new phenomenon of the "working poor".

But not all is gloom.

Appropriate policy responses have succeeded in ensuring high employment rates, high and generalized minimum remuneration and good social protection coverage, while providing stable jobs to part-time workers.

Indeed, the main conclusions of the book published by ISSA are that:

• Welfare systems can adapt, but this presupposes a comprehensive policy-mix and a broad-based debate among experts, decision-makers and the social actors on options and on the respective roles of the State and other stakeholders, in order to agree on the kind of society in which people wish to work and live, and on the corresponding social welfare reform.
• Some labour market trends can be reversed — the key factor is the promotion of the employment rates of the population, with the appropriate incentives, policies and changes in attitudes for youth, women and older workers.
• The reforms "success stories" maintain high incomes, low unemployment, balanced income distribution and high economic performance and are based on social dialogue and negotiations.
• Employment is a means to preserve social cohesion, not an end in itself.
  

Hedva Sarfati
E-mail:  hsarfati@iprolink.ch
Versoix/Geneva, Switzerland

*Hedva Sarfati and Giuliano Bonoli (Eds.) (2002), Labour Market and Social Protection Reforms in International Perspective: Parallel or converging tracks? Ashgate, Abingdon, 518 pages, hardback (ISBN 0 7546 1926 5) US$89.95/£ 50.00/euro 81.50; Paperback (ISBN0 7546 1927 3) US$ 39.95/£22.50 /euro 36.68

To order your copy:

North & South America: Ashgate Publishing Company, 2252 Ridge Road, Brookfield, VT 05036-9704, USA; Telephone: (+1) 802 276-3162; Fax: (+1) 802 276-3837; E-mail: info@ashgate.com; Contact: Suzanne Sprague.

Australia & New Zealand: Ashgate-Gower Asia Pacific, Hemisphere Publications Services, 3/303 Barrenjoey Road, Newport, NSW 2106, Australia; Telephone: (+61) 02 9999 2777; Fax: (+61) 02 9999 3688; E-mail: Info@ashgate.com.au; Contact: David Este.

Europe and the rest of the world: Ashgate Publishing Direct Sales, Bookpoint Limited, 130 Milton Park, Abingdon, Oxon, OX14 8SB, UK; Telephone: +44 (0)1235 827730; Fax: +44 (0)1235 400454; E-mail: orders@bookpoint.co.uk; Contact: Nicky Comber;

For the French edition: Hedva Sarfati et Giuliano Bonoli (Sous la direction de) ; AISS, 2002, Mutations du marche du travail et protection sociale dans une perspective internationale : voies paralleles ou convergentes ?, Peter Lang S.A., Editions scientifiques euroéeennes, 2002, XXXIV, 622 pp.,ISBN 3-906768-93-7 br. euro 72,40 (TVA incl. valable que pour l'Allemagne et l'Autriche)/ euro 67.70 (TVA non incluse)/£ 44.- /US$ 63.95/- / SFr. 105. - www.peterlang.net.

Other BNWW articles by Hedva Sarfati:

The 35-hour week legislation hotly debated in France

The European job crisis and the role of labour market flexibility and social dialogue

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