Libertad sindical

at Times of Crisis.

The CDA-VVD Christian Democrat-Liberal coalition led by Ruud Lubbers was re-elected in 1986 but an internal dispute over environmental policy caused the VVD to leave the government subsequently thereby causing an election. The Liberal vote fell as did that of the PvdA Labour Party. The CDA vote held up and a number of small fringe parties gained support.

After protracted negotiations a new coalition government of CDA-PvdA was formed in which Mr Lubbers was prime minister and the Leader of PvdA (and former head of the Dutch Trade Union Federation FNV) Mr Wim Kok, became Finance Minister.

The programme of the new government allowed for increased social spending but this was balanced by a strong commitment to fiscal discipline, specifically reducing the budget deficit from 5.5 per cent of net national income to 3.25 per cent over the expected life of the government. Public reaction against this fiscal policy was damaging to PvdA who suffered in local elections in 1991. It was the government’s resolve to tighten up welfare expenditure – especially disability claims – that was the focus of public anger. The problem for Wim Kok was that Labour was seen to be

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acting against the interests of its natural constituency (EIU, 1993/4: Visser and Hemerijck, 1997). Nevertheless, he is unrepentant about welfare reform:

“Any welfare system can only survive if the benefits are confined to those who genuinely need them. If you really care about welfare you must be critical of the balance between how it runs.”

(Wim Kok Interview, 12^th September, 2012).

Table 5 below outlines the composition of governments in the Netherlands over the 20 years from 1982 to 2002.

Table 5: Governments in the Netherlands, 1982-2002

Prime Minister Party Composition Minority/Majority 1982-1986 Ruud Lubbers (CDA) CDA and VVD Majority

1986-1989 Ruud Lubbers (CDA) CDA and VVD Majority 1989-1994 Ruud Lubbers (CDA) CDA and PvdA Majority 1994-1998 Wim Kok (PvdA) PvdA, VVD, and D66 Majority 1998-2002 Wim Kok (PvdA) PvdA, VVD, and D66 Majority Source: Green-Pedersen (2002:51)

Politics in the Netherlands in the 1980s and 1990s was dominated by the issue of welfare state reform and retrenchment.

The Netherlands is an example of a Christian democratic political economy, the unique features of which are well documented in the academic literature (for example: Esping Andersen, 1999; Huber and Stephens, 2001; Pontussen, 2005;

Green-Pedersen, 2002; Scharpf, 1999). The main differences with a social democratic political economy like Denmark are seen in lower levels of female labour force participation, a strong bias towards protection of steady employment organised around a presumption of male breadwinners, combined with subsidised labour exclusion.

In the early eighties 10,000 jobs a month were being lost. Nearly all were full time and, as such, presented a real crisis for the political economy model just described.

By 1984, 800,000 people – 14 per cent of the workforce – were unemployed and there was no sign of a let up in the trend. (Visser and Hemerijck, 1997:13).

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This situation was characterised by Goran Therborn (1986) as the most spectacular employment failure in the advanced capitalist world. But this was not solely a problem of lack of jobs, it was also a problem of the welfare regime and an example of Gøsta Esping-Andersen’s (1996) pathology of ‘Welfare Without Work’

manifested in 27 per cent of the labour force being unavailable for work through disability, early retirement or other headings of the welfare code. Jelle Visser and Anton Hemerijck (1997) refer to the expression ‘Dutch Disease’ being used to explain this phenomenon in economic text books in the 1980s. In short it meant that the Netherlands had become an expensive and unsustainable welfare state. Yet within less than fifteen years unemployment was reduced to low single figures and the Dutch Disease became the ‘Dutch Employment Miracle’.

Between 1980 and 2009 there were eight social pacts negotiated in the Netherlands.²⁰ Basic information relating to the pacts and the economic and political conditions in which they were negotiated is set out in Table 6 below.

Table 6: Social Pacts in The Netherlands 1980-2009

Year Name Issues Economic

Source: Visser and van der Meer (2011:204)

20 This is quite similar to Ireland where the process of making social pacts started in 1987 and seven pacts were negotiated up to 2009 when the process fell victim to the economic crisis.

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The evolution of corporatism in the Netherlands is explored in depth by Jelle Visser and Anton Hemerijck (1997). They identify two distinct periods of corporatism, the first between 1950 and 1962, and the second after 1982. Over that timeframe the transition from Keynesianism to Monetarism did occur but the existence of a consociational polity meant that it occurred over a longer timeframe, was less celebrated by its victors and less hard on its victims.

Physical and social distances in the Netherlands are not large which means that key actors in politics, business and the unions have ready access to each other. This is not unlike the situation in Ireland and it helps create an environment where it is easier to reach agreement. Moreover, in the Netherlands there is a convention about social pact negotiations which holds that lines of communication should be kept open, there is no boasting and some compensation is always offered for losses.

Above all, agreements once made must be kept. The principal trade union federation in the Netherlands is the Socialist Federation of Dutch Unions (FNV) and collective agreements made by it apply to 86 per cent of workers. The principal employers’ organisation is VNO-NCW, a Christian employers’ body with roots in the old pillar system. For the purpose of wage bargaining the Foundation of Labour (STAR) - founded in 1945 by the employers and unions – is the neutral ground where they meet to do business. The Social-Economic Council (SER) is a body which involves representatives of business and labour with a remit to advise the government. It performs much the same function as NESC does in Ireland albeit that the STAR tends to overshadow it within the institutional architecture of the labour market (Visser and van der Meer, 2011; Visser and Hemerijck, 1997;

Houwing and Vandaele, 2011²¹).

The core exchange in the 1982 Wassenaar Accord was an exchange of wage moderation for jobs effected through a reduction in working hours progressively from 40, to 38, 36, and 34 and ultimately 32 hours by 1990. The employers did not like this approach and by the mid-1980s ramped up a campaign for part-time jobs.

They succeeded in arresting the campaign for reduced hours and by 1987 it was dead, significant achievements being made only in 1983/84. The Central Planning

21 Smaller and medium enterprises are represented by MKB (the literal translation of SME). The overall organisation rate of employers is about 85 per cent. On the union side there is also the Dutch Christian Unions (CNV) and a smaller union for medium and higher skilled workers (De Unie/MHP). Union density was 22 per cent in 2006. (Houwing & Vandaele, 2011:28).

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Bureau estimated that 25 per cent of the reduced working hours translated into new jobs. Insofar as there were further achievements in reducing working time it was through extra days off rather than hours’ reduction. Nevertheless, there was a strong willingness on the part of union members to accept shorter working hours with income loss. According to Visser and Hemerijck (1997) 71 per cent would do so provided everybody signed up for it. A certain fatigue eventually entered into the equation and with an improvement in economic conditions between 1988 and 1991 pressure to recover ‘lost’ wages began to emerge. By this time nearly all job redistribution was anyway in the form of part-time jobs. The unions did achieve some modest increase in wages for members but the resurgent economy did not last.

By 1990 the government was declaring that the economy was in decline and by 1991 the centre of gravity of industrial disputation had moved on to welfare reform.

Nevertheless, the importance of the Wassenaar Accord should not be underestimated. Visser and Hemerijck describe it as ‘a major change in policy and mentality’ (1997:60). This characterisation reflects the willingness of the social partners to prioritise investment for job creation. Moreover, it recreated an atmosphere of trust between employers and unions which made later agreements possible.

Thirty years later its principal architect, Wim Kok, who was then head of the FNV Trade Union Federation and subsequently prime minister, said of the Wassenaar Accord with Dutch employers:

“We were so close to a real crisis with youth unemployment at 20 per cent that people were desperate. Doing nothing was not an option. I took a risk. Certainly trade union members were not sending me flowers but the whole atmosphere was dominated by despair and sometimes people will accept what they might not otherwise.”

(Wim Kok Interview, 12^th September, 2012).

In summarising this period it can be said that the Wassenaar Accord marked the return to a policy of voluntary wage restraint on the part of the unions. This policy endured, with some hiccups, during the next fifteen years. The policy of wage

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restraint did not begin with a consensus, but produced a consensus. It was a process which gave primacy to profits and investment and this reflects the measure of trust which informed the process. The union side had to believe that their sacrifices would result in significant employment gains – which it did, although not quite as they had hoped (Green-Pedersen, 2002:98; Visser and Hemerijck, 1997).

According to Jelle Visser and Marc van der Meer (2011) social pacts became the institutional alternative to state intervention after the Wassenaar Accord and are now standard operating procedure in times of crisis. They characterise the Netherlands as a coordinated market economy of the corporatist variant embodying a high degree of mutual cooperation between unions and employers, and regular consultations with the government.

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IRELAND