Paper prepared for the ECPR General Conference, 3-6 September 2014 in Glasgow Panel The Politics of Welfare and Social Policy Reform How policies shape politics: Labor market policy conflicts and coalitions in five western European countries Abstract This article contributes to the scholarly debate on how new social needs are politicized at the elite level. I am able to demonstrate empirically that the labor market policy conflict is two-dimensional. The findings of an analysis of five Western European countries indicate that depending on the labor market legacies, political actors fight not only over the degree of generosity and state intervention, but also over the nature and the extent to which specific activation policies should be promoted. I show that different regimes employ different types of activation strategies to recommodify the unemployed and that this affects labor market politics. Moreover, I address the unresolved question of whether social democrats represent the labor market insiders or outsiders. I show that their strategies differ depending on the regime’s legacies and that they represent the insiders in dualized countries (Germany, France and Italy) and the outsiders in flexicurity countries (Denmark and Switzerland). Flavia Fossati Political Science Department Swiss Politics and Comparative Political Economy University Zurich Affolternstrasse 56 CH-8050 Zurich Phone: +41 (0)44 634 50 28 Email: [email protected]Acknowledgments: I would like to thank Silja Häusermann, Hanspeter Kriesi, Dominic Höglinger and Evelyne Hübscher for valuable feedback on previous versions of this paper. I also thank the participants of the panel Political Representation and actors' strategies at The Swiss Political Science Conference in Berne, February 2014 and the participants of the panel The Changing Politics of Social Policy at the XVIII ISA World Congress of Sociology in Yokohama, 13-19 July 2014. I am grateful for the support by the Swiss National Science Foundation, Pro-Doc Grant Grant Number PDFMP1-126421.
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Paper prepared for the ECPR General Conference, 3-6 September 2014 in Glasgow
Panel The Politics of Welfare and Social Policy Reform
How policies shape politics:
Labor market policy conflicts and coalitions in five western European countries
Abstract
This article contributes to the scholarly debate on how new social needs are politicized at the elite level. I am able
to demonstrate empirically that the labor market policy conflict is two-dimensional. The findings of an analysis of
five Western European countries indicate that depending on the labor market legacies, political actors fight not
only over the degree of generosity and state intervention, but also over the nature and the extent to which specific
activation policies should be promoted. I show that different regimes employ different types of activation
strategies to recommodify the unemployed and that this affects labor market politics.
Moreover, I address the unresolved question of whether social democrats represent the labor market insiders or
outsiders. I show that their strategies differ depending on the regime’s legacies and that they represent the
insiders in dualized countries (Germany, France and Italy) and the outsiders in flexicurity countries (Denmark and
activation measures concentrate on enhancing the human-capital of the unemployed, the liberal variant
is characterized by so-called work-first measures3 and the continental solution is based on an
“ occupational” strategy.
Bonoli (20104) summarizes these differences by means of a typology that captures the degree of
human-capital and “ pro-market” orientation. Similarly to Barbier and Ludwig-Mayerhofer (2004), he
argues that in the Anglo-Saxon countries5, the focus was laid on reinforcing coercion so as to prevent
welfare state dependency. Contemporaneously, these liberal countries keep human-capital investment
rather low. In the Nordic countries the activation policies are instead in line with the social investment
framework which relies on up-skilling and employment assistance (cf. Jensen, 2012). Finally, the
continental welfare states have a tradition of “ occupational” ALMPs which aim at keeping the
unemployed occupied mainly by short-time work while failing to systematically invest in their skills.
Hence, these measures focus primarily on retaining the unemployed’ s social networks (cf. Barbier &
Fargion, 2004; Daguerre, 2007). In a nutshell the characteristics of ALMPs differ fundamentally
depending on the labor market regime a country belongs to.
3 Work-first measures stress the need to swiftly re-introduce workers into the labor market principally by means of (negative)
incentives. 4 Bonoli (2010) proposes four ideal-typical ALMPs. The first is the occupational, which comprehends policies such as the
creation of public jobs and which is characterized by a low “pro-market employment orientation” and weak level of human
capital investment. The other three categories share a high pro-market orientation but diverge in terms of human capital
investment. First, there are schemes fostering the swift reintroduction of the unemployed into the labor market by means of
incentives but without investing in their skills (cf. time limits on recipiency, benefit reductions and conditionality). Second, there
are measures with a medium level of human capital investment, which assist the unemployed in looking for a job (counselling,
job search programs or job subsidies). Finally, there are up-skilling policies with a high pro-market orientation and a high degree
of human capital investment (job-related vocational training). 5 According to the Varieties of Capitalism (VoC) the Anglo-Saxon countries correspond to the Liberal Market Economies (LMEs).
9
Obviously, each regime is characterized by a particular mix of policies. Since these inherently belong to
the country’ s activation strategy repertoire these are less controversial than measures which are “ alien
to the system” . Hence, the expectation is that controversial policies determine the labor market policy
conflict.
Drawing on the theory presented above, I hypothesize that the labor market policy conflict is structured
by a state/market and an activation conflict in all countries (H1). Moreover, I hypothesize that the
activation conflict in the different regimes is determined by those policies which are controversial. The
dualizing regime is characterized mainly by short-time work schemes but lacks up-skilling and (coercive)
reintegration measures. Instead, the flexicurity countries have well-established training and incentive
schemes, whilst short-time measures are rarely implemented (especially in Denmark). Accordingly, I
expect that short-time work in Italy, France and Germany is uncontroversial and hence does not
determine the labor market policy conflict in these countries, whereas this is the case for training and
incentive-based reintegration measures in Denmark and Switzerland (H2).
Actor constellations in the labor market policy space
Regime-specific differences in activation conflict are, in turn, likely to determine different actor
preferences and coalition dynamics. Thus, I expect that the actual preferences of actors belonging to the
same party or actor family diverge depending on labor market policy legacies. For instance, it is
dysfunctional for social democratic parties to advocate increasing passive benefits in countries where
the replacement rates are already generous. Similarly, it is not conductive for liberal parties to insist on
liberalizing measures where employment regulations are already flexible.
10
In the following, I derive hypotheses on the regime specific coalition patterns. Thereby, I concentrate on
the most influential actors in the decision-making process, i.e. parties, unions, employers’ associations,
state bodies and social movement organizations (SMOs)6.
As shown in Table 1, depending on the legacies, similar political actors display different economic and
activation preferences. Particularly, social democrats can be expected to be located either in the
traditional left or the third way coalition depending on whether one considers the flexicurity or the
dualizing regime.
Table 1: Expected coalition composition in flexicurity and dualized labor markets
Economic dimension
Activation
dimension
State Market
Pro
activation
MODERN LEFT
THIRD WAY
- greens
- communists
- white collar unions
- social movement organizations
Flexicurity
- social democrats
- state bodies
- administration
- research institutes
- progressive liberals and
right-wing parties
Dualizing
- state bodies
- administration
- research institutes
- progressive liberals and
right-wing parties
Against
activation
TRADITIONAL LEFT
TRADITIONAL RIGHT
Flexicurity
- blue collar unions
Dualizing
- social democrats
- blue collar unions
- employers’ associations
- conservative government parties
6 See Table 6 and 7 for a list of the actors which were included in the analyses.
11
In the first quadrant (Table 1) I expect the modern left coalition which represents individuals with
preferences for generous passive and active labor market policies. Modern left actors foremost
represent sociocultural specialists, i.e. individuals with left-libertarian values, and labor market outsiders
(Kitschelt, 1994). Sociocultural specialists can be expected to endorse this policy strategy because of
their professional socialization. In fact, working in occupations characterized by interpersonal work-logic
(Oesch, 2006; Kriesi, 1998) sensitizes them to the needs of the unemployed and hence consolidates their
preferences for generous state intervention. At the same time, these above-average educated
individuals7 recognize that in a knowledge society the demand for skilled workers is the biggest obstacle
for the unemployed to be re-employed. A problem that can be best addressed by re-training measures
linked to adequate passive benefits.
In theory all left-oriented political actors could be expected to favor such extensive welfare state
engagement. However, in the light of constraints due to fiscal and budget austerity, not all left actors
may be in a position to pursue this kind of strategy. I expect foremost green parties, social movement
organizations, white-collar unions and left opposition parties (e.g. communists) to advocate modern left
policy packages because they are not in government and hence do not have budget responsibility.
Conversely, I do not expect social democratic parties to belong to this coalition because as mainstream
parties they compete for government responsibility. Thus, they are likely to refrain from proposing to
increase activation effort for new risk groups without making cuts in other social policy areas. Hence,
particularly in times of economic crisis, social democrats face the choice between accommodating the
new or the old social risks, whilst keeping the status quo for the other group.
In the bottom left quadrant I locate the traditional left coalition. This coalition focuses above all on
passive benefits and job-security regulations. Since overwhelmingly labor market insiders benefit from
7 These left-libertarian individuals have been shown to be particularly likely to vote for social democratic and
green parties (Kitschelt 1994; Kriesi 1998; Geering and Häusermann 2013).
12
such policy schemes, I expect this strategy to be adopted mainly by blue-collar unions and social
democratic parties who represent the insiders (Rueda, 2007). The incentives to foster their core
electorate’ s interests are clearly higher in countries where they are still affected by suboptimal
protection and are well organized. Thus, social democratic parties in dualized countries should refrain
from diversifying their policy offer to accommodate new social risks8, and focus on “ traditional left”
strategies instead.
On the contrary, I expect social democrats to propose third-way policies in regimes where traditional
social risks, i.e. the insiders’ interests, are already accommodated. In such regimes social democrats are
in a position to address new social needs by proposing activation measures and, where necessary, even
reallocate resources from traditional to new risk schemes. Accordingly, in flexicurity countries where the
insiders are well protected and do not fear (massive) cuts, both insiders and outsiders should have
similarly strong preferences for increasing the activation effort (Emmenegger, 2009) whilst maintaining
the status quo on passive benefits. Although in these countries activation offers are not essential for
insiders, these are nonetheless a backup in case of need. Thus, it is not surprising that in flexicurity
countries social democratic parties do not exclusively target labor market insiders in electoral campaigns
(Schwander, 2013).
The third-way coalition located in the top right quadrant favors increasing activation effort combined
with an above-average market orientation. Besides social democrats (in the flexicurity regimes),
government authorities, public administrations and progressive liberal or right-wing parties are likely to
endorse this policy package. In fact, these actors are the most likely to be influenced by the
supranational consensus, which combines the neoliberal insistence on balancing the budget with the
idea that a quick provision of labor market access is essential for reducing unemployment levels
8 These above all are particularly hard to mobilize since these groups are extremely heterogeneous (Bonoli 2005).
13
(Daguerre & Taylor-Gooby, 2004; Stiller & van Gerven, 2012). Furthermore, it is plausible to assume that
highly skilled workers, who are less likely to become unemployed, and individuals employed in technical
jobs9 prefer a less costly welfare state, and hence from a rational-choice perspective endorse
reductions in welfare spending and increasing re-commodification effort (Oesch, 2006).
Finally, in the traditional right coalition (bottom right quadrant) I expect to find primarily employers’
organizations and conservative/right-wing mainstream parties. These actors consider the current level
of welfare support to be high enough and thus give priority to budgetary rigor over any kind of welfare
expansion (Esping-Anderson, 1990). As argued by Huber and Stephens (2001), particularly
right-wing/conservative parties are characterized by preferences for subsidiarity and self-reliance, and
hence can be expected to dismiss not only an expansion of passive but also of active welfare effort (cf.
Miles & Quadagno, 2002).
Operationalization and methods
To analyze the implications of the “ activation turn” on labor market politics I rely on novel interview
data which was collected in Denmark, France, Germany, Italy, UK and Switzerland in autumn 2010. The
dataset is based upon semi-structured telephone interviews with the major policy-makers10 who are
active in the domain of labor market policy, i.e. parties, unions, state bodies, administrations and social
9 These jobs do not follow a pro-social or client centered work logic and hence entail more conservative and
market-friendly attitudes as compared to the sociocultural specialists. 10
Our NCCR-Democracy P11 research team originally contacted 161 political actors in the six countries. In the present analysis I
rely exclusively on the data collected in the first of the two interview rounds of our elite surveys. In total we were able to obtain
109 interviews in October 2010 (first round) and 118 in December 2010 (second round) (please refer to Table 5 in the
appendix for the response rate). We encountered severe difficulties in obtaining interviews in Italy and the UK. In particular,
we were able to reach just one employers’ organization in Italy (even though the most relevant one) and had no opportunity to
speak to a representative of the administration in the UK. In contrast, in Switzerland and in Germany the political actors were
very cooperative and we faced no problems in scheduling interviews at all. Finally, in Denmark and France we encountered
problems in particular with representatives of public administration, right-wing parties and employer’s associations.
14
movement organizations (SMOs).11 This kind of interview data is best suited to analyse the political
conflict structure because it allows assessing the underlying preferences of political actors
independently of possibly idiosyncratic, very specific and/or limited political reform processes (cf.
Häusermann 2010). Moreover, the precision of the questions we proposed to our interview partners
allows for a more accurate analysis of the conflict dimensionality as compared to data which relies on
very broad categories such as the Manifesto Data Collection (Manifesto Project MRG/CMP/MARPOR).
Furthermore, I was interested in measures which are able to capture both the political actors’
preferences with respect to policy measures (position measure) and their perception of the relative
importance of a particular policy measure (salience measure). Accordinlgy, Manifesto Data would be
inadequate because they provide merely measures of salience rather than of position. Due to the
shortcomings of the commonly used datasources we hence engaged in the collection of a more direct
and precise measure of position and salience. I rely on several items of our questionnaire to
operationalise the labor market policy conflict structure. In more detail, only those items were included
which are theoretically best suited to capture the economic dimension (state/market) and the different
activation models (Nordic and occupational). I also was careful to choose those items which best allow a
discrimination between the different actors’ positions, i.e. which have the largest possible variance.12
Nine preference measures meet these requirements (cf. Table 8). In detail, I operationalise the
economic conflict by means of three indicators capturing the generosity of passive benefits and the
degree to which the state engages in regulating social policy. The first item refers to the creation of
11
Interview partners were chosen as representatives of the major decision-making organizations who are experts in the field
of unemployment policy within the specific organizations. The relevance of the organizations included in the analyses was
cross-checked with two experts per country and validated by means of media analyses (see Kriesi et al. 2014). 12
I hence excluded items which were too generally formulated to capture specific labor market preferences ( “social inequality
should be reduced”) or uncontested items ( “solidarity with the unemployed should be increased”) and which accordingly do
not represent a political conflict ( see Tables 9 and 10 in the appendix for descriptive statistics).
15
public jobs.13
Especially in southern welfare states, the expansion of public employment is a way of
preventing unemployment and is associated with a generous leftist assistance to the unemployed. The
second corresponds to a state-led intervention to guarantee decent living standards to workers (raising
the minimum wage).
To operationalise the market orientation of the generosity conflict, I rely on an item capturing
preferences for unemployment benefit retrenchment and one aiming at “ increasing sanctions when an
unemployed person refuses a job which is deemed appropriate” . This second item captures a slightly
different form of generosity since non-compliance with activation requirements is sanctioned by
monetary disincentives such as freezing or reducing cash transfers (Clasen & Clegg, 2011; Kemmerling &
Bruttel, 2006; Trickey & Walker, 2001). Finally, two items operationalise preferences for lower and more
flexible employment protection (“ loosening of the hire-and-fire legislation” and “ increasing
working-hours flexibilization” ).
13
For the exact question wording, see Table 8 in the appendix.
16
Table 2: Operationalization of the conflict dimensions characterizing labor market policy
State Market
Economic conflict 1) The use of state programs to create
jobs (statejob)
2) Raising the minimum wage
(minwage)
3) Tougher sanctions for those who
refuse to accept an appropriate job
(sanction)
4) Reduction of unemployment
benefits (reducbenef)
5) Flexibility of working hours
(workhours)
6) Loosening of hire and fire legislation
(hirefire)
Pro activation Contra activation
Activation conflict Type 1: Human-capital activation
7) More retraining possibilities for the
unemployed (training)
8) Promotion of labor market
reintegration (reintgr)
Type 2: Occupational activation
9) The promotion of short-time work
(shorttime)
(Same items)
The activation strategies are operationalized by means of three questions. The human-capital activation
strategy is captured by the promotion of training and by the effort to reintegrate the unemployed in the
labor market by means of activation measures (“ reintegration” ). The occupational model instead relies
foremost on the retention of individuals in the labor market by means of short-time work (Sacchi et al.,
2011, Estevez-Abe et al., 2001; Thelen, 2001).
To test the first hypothesis and assess the dimensionality of the political space I conduct an exploratory
factor analysis with varimax rotation14
. Thereby, I include the nine items shown in Table 215
. For each
14
Missing cases were recoded as neutral both in position and salience; fortunately they only represent between 2 and 5%. 15
The non-governmental organization Attac Germany was excluded from the analyses because it proved to be an outlier in
the pooled model including all actors. Since this organization is only of minor importance in this policy domain, its exclusion
seems to be legitimate.
17
item, I constructed an indicator which takes into account both the actor’ s position on a given measure
and the salience of the measure for the actor16
.
To assess the stability of the actor constellation, three different types of checks were run. First, the
analyses were re-run only with parties and social partners (unions, employers’ associations) and state
bodies since these actors are the most influential players and hence can be expected to decisively shape
the labor market policy conflict. Moreover, the analyses were performed without issue salience
weightings and for each country separately.17
These additional analyses show that the actor
constellations are stable.
Analyses
First, I test whether a two-dimensional labor market policy space can be found in all five countries
included in the study. To this aim I show the pooled analysis including all 108 political actors (excepting
Attac Germany) in a single model. As theoretically expected, Table 3 shows that the nine labor market
policy items load on two distinct factors. However, the eigenvalues clearly indicate that only the
state-market factor (column 1) forms a strong homogeneous scale (eigenvalue 2.34), whilst the
elements on the activation dimension reach an eigenvalue of only 0.53 (column 2).
16
The combined indicator was developed by multiplying standardized salience and position for each actor. This strategy, which
involves weigting position by salience, gives less weight to positions on measures which the actor considers irrelevant and
allows the most significant conflicts to be captured. In fact, while political actors tend to have a stance on all issues, they may
judge them differently in terms of relevance. To capture the fundamental political conflicts it is hence pivotal to focus only on
those issues which are salient. An actor’s position on a given policy measure is gauged on a scale ranging from 1 to 5 (strongly
disagree - strongly agree). For the operationalization of a measure’s salience, I asked the respondents to indicate the most
important measure on the list that was submitted to them, the three most important measures, and the three least important
measures. The resulting salience indicator allocates three points to the most important measure, two points to the other two
important measures, zero points to the three least important measures and one point to the remaining ones. 17
See Tables 11 and 12 in the appendix.
18
Table 3: Pooled factor analysis (all countries)
Items* State/market Activation
Sanction 0.57 -0.03
Reduc. benefit 0.57 -0.06
Work-hours 0.67 -0.09
Hire-fire 0.47 0.04
Minimalw -0.70 0.05
State job -0.66 0.14
Training -0.31 0.41
Short-time -0.03 0.37
Reintegration -0.08 0.43
Eigenvalue 2.34 0.53
N 108* 108*
*Attac Germany was excluded from the sample
This finding18
, however, is consistent with my argument that different activation conflicts should be
expected depending on the labor market legacies of a regime. Accordingly, only when conducting
regime-specific analyses do I expect to find an adequately strong regime-specific second factor. The
activation factor should thus be characterized by functionally equivalent activation policies depending
on the regime characteristics. Hence, to unveil the differences in the second conflict dimension in Table
4, I present the results of the regime-specific factor analyses. In line with the first hypothesis (H1) I can
empirically corroborate that the political conflict in Western Europe circles around two types of labor
market strategies, namely passive and active policies and but that the precise conflict configuration
differs19
.
18
To interpret the findings of the factor analyses it is useful to consider that variables load strongly on a factor
when these contribute to discriminating between the observations (in this case the political actors). Accordingly, a
high factor loading is an indication that a policy is highly controversial. 19
The decision to analyze flexicurity and dualizing regimes separately is supported by the country-specific solutions presented
in Table 11 and 12, which unveil that the conflict structure is rather similar for the countries belonging to the same regime,
even though smaller deviations do appear, in particular for Germany.
19
Table 4: The factor state/market and the activation by regime
Flexicurity Dualized
Items Denmark and Switzerland Germany*, France and Italy
State/market Activation State/market Activation
Sanction 0.52 -0.23 0.58 -0.09
Reducbenef 0.71 -0.07 0.51 -0.26
Workhours 0.46 -0.33 0.71 -0.13
Hirefire 0.46 0.03 0.55 -0.16
Minimalw -0.53 0.22 -0.76 -0.05
Statejob -0.31 0.61 -0.72 -0.02
Training -0.11 0.48 -0.30 0.40
Short-time 0.00 0.59 0.20 0.35
Reintegration -0.09 0.22 -0.02 0.66
Eigenvalue 2.12 1.21 2.71 1.95
N 40 40 67 67
*Attac Germany was excluded from the sample
Turning to the details of the findings summarized in Table 4, increasing sanctions, reduction of benefits,
flexibilising working-hours, hire-and-fire regimentation and increasing the minimum wage determine the
state/market factor. For this first factor, the regime specific variation is marginal, and concerns only the
magnitude of the loadings and the allocation of the item “ public job creation” which in the flexicurity
countries pertains to the activation dimension rather than to the state/market conflict.
While the composition of the economic factors is consistent across the regimes, the activation
dimension is regime-specific. I find that in the flexicurity countries, the loadings for training and
reintegration are rather low, which means that these programs are less controversial This
uncontestedness supports the expectation that measures which are part of the regimes’ labor market
policy tradition are less contested than “ alien” ones. Hence, the undisputedness of active reintegration
and training programs points to the strong human-capital orientation of flexicurity countries.
20
Conversely, policies which do not pertain to this repertoire (public job creation and short-time work)
polarize more and hence display higher factor loadings.
In the dualizing regimes, instead short-time work results to be the least controversial policy instrument.
This is not surprising since it is the standard solution governments implement to address unemployment
particularly in times of crisis (Sacchi, Pancaldi & Arisi, 2011). Conversely, and mainly because of the
virulent insider-outsider debate that characterizes dualizing countries, measures addressing active
reintegration - particularly of the labor market outsiders - are highly contested. The reason why
reintegration measures for outsiders are debated is that – particularly in times of austerity - welfare
policy resembles a zero-sum game, where an expansion of outsider-friendly policies often disadvantages
the insiders. Finally, also “ training” is hardly implemented in dualizing countries. Since this approach
proves effective in the Nordic context, political actors seem to debate and partially disagree on their
implementability, which leads to a moderate loading of 0.4.
In a nutshell, the expectation that policies which are uncharacteristic for a regime, are particularly
subject to controversies and by consequence heavily determine the political contest, can be
corroborated. First, I found that the structure of the economic dimension is rather consistent between
the different countries, whilst the activation conflict is clearly regime specific. Second, the composition
of the activation dimension closely mirrors the debates over policy measures which are atypical for the
specific regime. Conversely, policies that are well-anchored in a country do not drive the political
conflict. Accordingly, political actors in regimes with strong human-capital activation and already flexible
labor markets debate the utility of short-time work, whereas regimes that apply short-time work
wonder whether training and reintegration policies might be the better alternatives.
21
The actor constellations in the labor market policy space
Flexicurity countries
After describing the labor market conflict patterns let us now analyze the political actors’
preference-based coalition patterns. Figure 2 and 3 show the positioning of parties, employers’
associations, unions, SMOs, state bodies and the administration in the labor market space. The
coalitions correspond to the quadrants which result from the state/market and the regime-specific
activation factors which were presented above.
In the first quadrant we find the modern left coalition, which is composed by actors who support both
increasing activation effort and increasing state intervention. The actors located in the third way
quadrant share a strong activation orientation but endorse market-liberal policies on the economic
dimension. The remaining two coalitions both oppose an expansion of activation policies. However,
whilst the traditional left coalition is strongly in favor of state intervention, the right coalition is for
retrenchment on both the activation and the economic dimensions.
22
Figure 2: Actor configuration in the flexicurity countries (Denmark and Switzerland)
Legend
Denmark: Unions: AC Akademikernes Centralorganisation, FTF Confederation of Professionals, LO Confederation of trade
unions; Employers’ organizations: DA Confederation of Danish Employers, DI Confederation of Danish Industry; Parties: SD
Social Democrat party, Venstre Liberal Party, DF Dansk Folkepartis, KF Konservative Folketsparti, RG Red-Green Alliance, SF
Socialist Folkeparti; Administration: NLMA National Labor Market Authority, DEC Economic Council, advisory board to the
government; NGOs, Charities and Think-tanks: SFI Danish national center for social research, ECLM Economic Council of
labor movement, CEPOS Conservative think-tank.
Switzerland: Unions: Unia Unia, KV Kaufmännischer Verband Schweiz, Syna Syna Arbeitslosen Kasse, AS Angestellte
Wohlfahrtsverband, Bertels Bertelsmannstiftung, IAB Institut für Arbeitsmarkt und Berufsforschung.
27
In the dualisation countries (Figure 3) the modern left coalition includes several unions (the German
unions IGM, DGB and Verdi, the French unions UNSA and CFECGC) and several SMOs (the French MNCP,
the German Paritätischer Wohlfahrtsverband and the Italian INCA and ACLI). As expected, also the
greens in Germany and France (EELV) and the (former) communists (PCF, PdCI, PRC in Italy and die Linke
in Germany) cluster in this quadrant. Thus, similarly to the finding for the flexicurity countries, it is
mainly actors who do not have government responsibility who favor expansion on both labor market
dimensions.
In the traditional left cluster we find the German and the French Socialist parties (SPD and the PS), the
left-oriented Italia dei Valori and most unions. Only the Italian confederation of trade unions (CIGL), the
Christian-democratic union (CISL) and the French CDTC belong to the third-way coalition and hence
strongly support additional activation measures. This finding corroborates the expectation that in
dualizing labor markets, social democrats do not concentrate on activation measures which favor labor
market outsiders (education and active reintegration) but stick to the traditional solution of short-time
work and focus on the needs of the insiders. Figure 3 also shows that the position of the German
socialists (SPD) tends to a centrist position on the state/market axis, which in the light of their
liberal-leaning Hartz IV reform, might not surprise after all.
The state bodies and administrations which were expected to be situated in the third-way coalitions are
consistently located in the right coalition, e.g. moderately to the right, and diverge widely on the
activation axis. Interestingly, a similar pattern has been detected for the state bodies in Denmark and
Switzerland, as well. Only the Italian Ministry of Employment and the German Ministry for Social Affairs
behave consistently to the hypotheses and are located in the third-way coalition. Hence, the hypothesis
that the conservative government parties pertain to the right coalition can be partially underpinned for
28
the dualizing countries. In fact, both the German CSU/CDU and the Italian PDL meet the expectations,
only the French UMP is situated in the third-way coalition endorsing additional reintegration measures.
Interestingly, in the dualizing countries the right coalition is extremely divided on the state/market
dimension but has a very homogeneous stance in refusing increasing human-capital activation effort.
These right-oriented actors seem thus to disagree foremost on whether employment conditions should
be liberalized further, an issue which has been pushed particularly by employers’ organizations and
government parties in the dualizing countries to countervail the rigidities of the continental welfare
states. Conversely, issues linked to activation measures seem less debated and/or relevant for the
political contest.
As expected, I was able to show that employers’ associations are consistently located in the right
coalition, that state bodies do not necessarily pertain to the third-way coalition and that unions spread
across the modern and the traditional left cluster. However, the most interesting finding is that
concerning the dualisation debate. In fact, I was able to show that social democrats pursue different
strategies depending on the labor market regime. In fact, in the flexicurity countries they consistently
accommodate the interest of the labor market outsiders by asking for more public employment and for
short-time work, whereas in the dualizing countries they focus on redistributive policies and oppose
active reintegration measures which would benefit foremost the outsiders. Hence, in the dualizing
countries social democrats accommodate their traditional and primary clientele, namely the labor
market insiders. Conversely, in the flexicurity regime social democrats accommodate foremost the
outsider - since the interests of the insiders are already accommodated by the generous and
encompassing system. By consequence, this result nicely underpins my expectations that socialist
parties should not be expected to implement exactly the same policies independently of the
institutional context they are embedded in.
29
In sum, the present analyses show that the political contest in labor market policy is two-dimensional
and revolves around a state/market axis that results to be very similar in all regimes, and an activation
axis that instead is regime-specific. Hence, I am able to support the literature arguing that activation
policies and their conflict lines differ across regimes (Bonoli, 2010; Barbier & Ludwig-Mayerhofer, 2004).
Moreover, I contribute to the debate on whether social democratic parties represent the interests of the
insiders or of the outsiders by showing that their strategy depends on labor market legacies. Thus, these
parties focus on the interests of the outsiders where the labor market policy schemes are already
generous and protect insiders adequately, whereas in the countries where unemployment policies are
marginal they foremost engage for their core clientele. In line with the argument proposed by Thelen
(2012) I suggest that “ institutional starting points” are pivotal in explaining political actors’ strategies,
reform trajectories and in the end eventually labor market politics.
Conclusion
This article analyses the structure of the labor market conflict in five CME countries and tests whether
the traditional framework of state intervention versus economic liberalism is still adequate to capture
labor market policy preferences. I argue that this is not the case since, as a consequence of the changing
socio-economic context, political actors are confronted with new social risks and hence adapt their
strategies by introducing ALMPs. In fact, challenges such as long-term unemployment, in concomitance
with increased financial strain can be accommodated best by means of activation and
re-commodification policies which become the pillars of “ modernizing” welfare reforms.
In the light of the “ variety of activation” literature, I hypothesized that labor market regimes differ with
respect to the activation measures they implement and that by consequence the political contest
30
differs, too. I claim that political actors disagree foremost on those issues which are alien to the system.
Hence, whilst in flexicurity countries measures such as training are widely agreed upon as basic pillars of
the human-capital activation model, policies such as short-time work and public job creation can be
expected to be hotly debated. Conversely, I expect that political actors in dualizing countries, which
traditionally rely on short-time work to regulate unemployment, have been increasingly assessing the
necessity to widen the activation repertoire to include training and active reintegration measures.
Lastly, I test the argument according to which actors belonging to the same actor family may differ in
policy strategy depending on the institutional legacies. Focusing on social democratic parties, I am able
to corroborate the expectation that they concentrate on the labor market insiders in dualizing countries
but extend their mobilization to outsiders in flexicurity countries.
The analyses rely on a telephone survey of the major players active in labor market policy carried out in
autumn 2010 in Denmark, France, Germany, Italy and Switzerland. In the interviews with unions, parties,
state bodies, employers’ organizations and social movement organizations, the political actors
responsible for the domain of unemployment were asked to express their organizations’ position on a
battery of policy items, and in a second step to classify them in terms of saliency. I then used this
information to construct an indicator by multiplying the preference and salience score of each item. I
performed a factor analysis on these items to assess both the dimensionality of the political conflict
structure and the actor constellations.
The findings corroborate the expectation that in all countries the labor market policy space is structured
along two dimensions, namely a state/market and an activation conflict. The analyses also reveal that
whereas the economic dimension is regime invariant, the activation conflict depends on whether the
country has a flexicurity or a dualizing labor market legacy. This finding nicely underpins the theoretical
31
argument of the “ variety of activation” literature which argues that across Europe we witness
qualitatively different activation schemes.
I argued that the labor market policy preferences differ because of institutional legacies, in particular
the activation schemes. In the flexicurity countries (Denmark and Switzerland), a strong orientation
towards a generous and human-capital activation practice was expected and, I could show that the
political contention in these countries is mainly about whether it is necessary to increase state efforts in
the activation domain by means of expanding short-time work or creating employment in the public
sector. In the dualisation model, which is characteristic of France, Italy and Germany, the labor force is
split into insiders profiting from rather generous benefits and an increasing share of workers with
precarious or atypical contracts. Here, the political conflict on the second (activation) dimension was
shown to be defined by activation preferences relating to reintegration. It thus appears that policies
which are alien to the system, and hence the most controversial, drive the politics of labor market
policy. In other words, institutional legacies shape today’ s labor market politics.
32
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Appendix
Table 5: Response rates in the two waves of interviews with policy-makers per country: percentages
Response
rates
First interview
Second interview
Contacted Cooperated Cooperated
Denmark 20 16 15
Switzerland 24 24 24
Germany 25 22 21
France 27 25 25
Italy 36 22 18
Total 132 109 118
35
Table 6: Political actors in Denmark and Switzerland
Denmark Switzerland
Unions
AC Akademikernes Centralorganisation Unia Unia
FTF Confederation of Professionals KV Kaufmännischer Verband Schweiz
LO Confederation of trade unions Syna Syna Arbeitslosen Kasse
AS Angestellte Schweiz
SGB Scherizerischer Gewerkschaftsbund
TS Travail.Suisse, Gewerkschafts-
dachorganisation
Employers’ organisations
DA Confederation of Danish Employers SBV Dachverband Schweizerischer
Baumeisterverband
DI Confederation of Danish Industry SGV Schweizerischer Gewerbeverband
SAV Schweizerischer Arbeitgeberverband
Swissmem Swissmem
Parties
SD Social Democrat party Gruene Grüne Partei Schweiz
Venstre Liberal Party FDP Freisinning Demorkatische Partei, die
Liberalen
DF Dansk Folkepartis SVP Schweizerische Volkspartei