Workers and employers – based on either Socialist or Catholic ideology – initiated social security arrangements in Belgium, not the state.
The social security is not the state’s, it is ours. Through our social orga- nizations we [the Belgian people] developed a social security system with a pluralist and autonomous character, which functions within a le- gal framework. It is not part of the state. This is a guarantee for each citizen’s well-being, because they are by definition in an impotent and subordinate position versus the state (Deleeck 2001: 436).
Unemployment funds initiated and administered by the trade unions were first subsidized in 1907. After the First World War, these subsidies proved insufficient in times of mass unemployment. Therefore, the National Crisis Fund was founded in 1920 for the unemployed who were ineligible for union unemployment funds. It took 25 years before a compulsory national social insurance system emerged out of this patchwork of arrangements be- cause political dissent blocked fundamental change (Van Steenberge 1987).
of Antwerp. The unions seized the opportunity to initiate a grand debate be- tween the social partners and the government, resulting in the first National Labor Conference (nac). Soon, the role of unions and employers’ organiza- tions as partners in national negotiations on employment and social policy institutionalized (De Broeck 1989).
A social pact
During the Second World War, a clandestine elite study group worked out a ‘Social Pact.’ One element of their discussion was the Beveridge Plan. This group of employers and union organizational leaders showed exceptional solidarity in the face of a common enemy and a concern for the post war re- construction of their country’s economy. After the war, on 28 December 1944, the Social Pact became law. The defenders of the state monopoly on social security and the advocates of the subsidiary principle agreed on the organization of a national social law. The law authorized non-governmen- tal actors to administer the benefits (among the unions and the sickness funds). In addition, public agencies were created to implement social policy for those not affiliated with a union. The original privately initiated ‘system’ was not replaced but complemented by public arrangements. ‘From that day on, the welfare state was extended gradually without any structural reform, in spite of all attempts at constructive discussion on a comprehensive ap- proach’ (Van Steenberge 1987: 31).
In 1945, the National Employment Agency (rva) was founded. The em- ployee’s rights on unemployment insurance were hereby officially granted, regardless of one’s destitution, and without duration limits. The National Social Security Service (rsz) collects all contributions on wages from both employers and employees. The rva decides on the eligibility of individual claims for unemployment benefits and allocates the financial means to the benefit administrators, i.e., the three unions and one public unemployment benefit administration. In 1971, it was decided to switch from flat-rate bene- fits to individual compensation (60% of one’s last wages). ‘The benefits were by and large publicly financed; only a very small portion of the benefits was financed by contributions on wages’ (Van Steenberge 1987: 36). Throughout the economic recession of the 1970s and 1980s, the social secu- rity system for employees continued to depend largely on government sup- port (ibid.: 53).
The Welfare Act, instituted in 1974, provided means-tested benefits at a subsistence level for those not eligible for any other form of income compen- sation. Subsistence level is the living standard which the government
69
guarantees to its citizens in order to prevent poverty. This act completed the creation of the social security system in Belgium by filling the final gaps that occurred in a patchwork system based on private initiatives and mutual in- surance policies per sector (Van Steenberge 1987: 45). The social security system had originally been constructed during an economic boom, but iron- ically, the economic tide turned soon after its completion. The system is based on the assumption of full employment, but almost immediately the unemployment insurance system had to absorb a structural influx of work- ers who would never return to the labor market. Unemployment rose from 104,720 in 1974 to 228,537 in 1976, and increased steadily until the mid- 1980s.11In 1978, the government optimistically proposed a series of labor
market interventions with the ambitious title: Objective 70,000. This objec- tive would never be met (Jeurissen 1995). Because they interpreted the in- crease of unemployment as a temporary phenomenon, successive govern- ments financed their Keynesian investments with budget deficits, running up a huge public debt in the 20 years to follow (Van Langendonck and Put 2000: 28). The unemployment and early retirement programs served as a smooth way to reduce the labor market supply and restructure Belgian in- dustry (Deleeck 2001: 432).
In the 1980s, successive Christian Democratic and Liberal cabinet coali- tions enforced a so-called ‘crisis policy,’ using emergency mandates.12The
crisis policy consisted of selective restraints without systematic institutional reforms (Deleeck 2001: 433). To fight both the alarming unemployment sit- uation in the early 1980s, as well as increased costs, a range of benefit reduc- tions, solidarity contributions, higher premiums on wages (more financial responsibility for employers and employees), arrangements for early retire- ment, and employment activation programs were instituted. Due to attempts to disperse the burden of cutbacks as much as possible, the social security legislation became more complex and obscure than ever before (Van Steenberge 1987: 48). The Belgian unemployment insurance can – more than any other social security arrangement – be characterized as an in- crementally constructed policy in which consecutive interventions and amendments accumulated rapidly (De Lathouwer 1996).
Security on shaky legal foundations
Instead of being constituted by law, the unemployment insurance in Bel- gium is largely based on the Royal Decree of 20 December 1963 (regarding unemployment insurance and employment service), and the Ministerial De-
laws and do not need specific parliamentary approval if a cabinet or a minis- ter decides to change them.
The unemployment benefit scheme is not very generous in terms of out- lays, but unlike other countries, the Belgian system is characterized by an unlimited duration for most categories. Furthermore, employees can choose to withdraw from the labor market for six months or a year (sabbatical), or choose to turn their full-time job into a part-time appointment (max. five years). In both cases, they can complement their income loss with unem- ployment benefits (scp 2000: 29).
Secondary income providers (usually married women) receive a small un- employment benefit which often serves as additional income for a family. They have little financial incentive to accept a job if it is not full time, partic- ularly in low-income families. When a single-income provider receives an unemployment benefit, the strong family bias in the unemployment scheme discourages partners from seeking a part-time job or low-wage employment because this has repercussions on the unemployment benefits received (Hemerijck, Unger and Visser 2000). Together, these factors are a disincen- tive for female labor participation in low-income families. The Belgian social security benefits are more and more geared toward single-income families (Cantillon 1999). In recent years, the double-income household has become the welfare standard. The targeted benefit schemes try to prevent a growing discrepancy between traditional single-provider households and
71
t h e e vo lut i o n o f s o c i a l s e c u r it y p o l i c y
The 1992 Unemployment Benefit Scheme
Only available for employees in the private sectors (civil servants and self-employed do not run the risk of unemployment ).They are eligible if they are involuntarily unemployed and have an employment record of 78 days in the past 10 months or 624 days in the past 36 months.The program has four types of benefits:
1. income providers with dependent families: 60% of former wage (up to a certain max.) 2. singles (no dependent families): first year 60%, 43% per subsequent year
3. secondary income providers (people who work but do not provide their family’s primary income, often married women): first year 55%, second half year 35% (to be extended by 3 months for each year of previous employment), then a low flat-rate benefit.
4. starters (recent gradutes dropouts who do not have an employment record, but are un- able to find a job when they do finish school): a low flat-rate benefit, dependent on their age and family situation.
The unemployed are obliged to actively seek work, but the Belgian system provides many exceptions to this rule: for those who study, who take care of young children, who are over 50, etc. Secondary income providers with an unusually long duration of unemployment (twice the local average) can be suspended by means of article 143 of the Royal Decree on Unemployment Insurance.
more prosperous double-income families. This could also be seen as an indi- rect state payment for private household work in single-provider families. Despite calls by large organizations such as the oecd and the eu to stimu- late labor participation among women in order to decrease the alarming inactivity rates, Belgian social policy seems to do precisely the opposite (Cantillon 1999: 173).
Due to the already huge public debt, successive Belgian governments since the 1980s had less financial resources to spend. They wanted to fight pover- ty by all means necessary, and thus introduced a distinction among the vari- ous family situations. Basic entitlements remained intact, but benefit levels were differentiated. Only breadwinners could obtain full benefits, all other beneficiaries were entitled to minimum income compensation or low flat- rate benefits. This policy change saved the government a considerable amount of money, as more than half of all entitlements refer to minimum flat-rate benefits.