EU active inclusion policies: bringing the role of industrial relations back in

By Manuela Galetto and Guglielmo Meardi

@ManuGal1 @guglielmomeardi @airmulp

There is increasing awareness at the European level that competitiveness and growth need to be balanced with social cohesion and security. Labour market reforms designed in the 1980s and early 1990s to meet employers’ demands for flexibility have been complemented, to different extents in different countries, by initiatives and measures to meet employees’ need for protection. Flexicurity – the combination or ‘trade-off’ between flexibility and security – has become a pivotal concept of the European Employment Strategy. The newest manifestation of the European approach to labour markets is the recognition of the potential positive-sum game between social equity and economic efficiency and the ‘investment’ that social policy provisions can represent, as captured by the Social Investment Package.

One of the core elements of the Social Investment Package is ‘active inclusion’, defined as the enabling of every citizen, in particular those excluded from the labour market, to fully participate in society. This has three pillars: adequate income support; inclusive labour markets; and access to quality services. The AIRMULP project is focusing on the first two of these pillars. The research is being undertaken in six countries, each with different problems concerning labour market inequalities and underperformance: France, Italy, Poland, Spain, Sweden and the United Kingdom. Although social and labour market policies have been studied extensively in all these countries, as well as at the European level, little has been said either about the role of industrial relations in shaping such policy initiatives or about the effects of industrial relations involvement.

Early evaluation of national active inclusion policies in these six countries by the European Commission in 2013 has suggested that the involvement of actors in policy elaboration and implementation has been limited and erratic. A central focus of the AIRMULP project will be to understand why this is the case, and to explore conditions for improvements by seeking to identify examples of best practice at subnational levels. The research will pay particular attention to the issue of multi-level governance and interaction between policymakers and social partners. Of particular scientific and academic interest is the varying extent to which actions at various levels are horizontally coordinated and whether policies and reforms in different but related fields relevant to active inclusion (youth employment and vocational training, for example) are designed in an integrated and coordinated manner. The research will also seek to investigate the extent to which such actions are vertically coordinated (both top-down and bottom-up) between the European, national and territorial levels. This latter issue, on which particular attention will be paid to the degree of formality and informality of coordination (or lack thereof) between the various levels, is likely to be of particular relevance to policy-makers.

The research is expected to make contributions to two fields. The first is the field of comparative industrial relations research. Exploring the role of the respective social partners in initiatives for active inclusion in the six countries will allow for an analysis of the similarities and differences in approach across nation states. It will also allow for an analysis of outcomes from the point of view of the likely capacity of the social partners to contribute (both now and in the future) to active inclusion strategies. The insight into territorial initiatives and diversity of action will also inform debates on regional governance, while the research at the European level will enhance understanding of the implementation of supranational agreements at national level.

The second and more general contribution of the research will be to the understanding of democratic capitalism in Europe. In particular, the research will seek to unravel the degree and nature of coordination between institutional levels and policy fields, the role of rhetoric and ideas and their relation with policy action, the role of intermediate organizations, and the involvement of interest organisations. In essence, the research will seek to explore just how democratic it is possible for democratic capitalism to be.

One could argue that there is little room for optimism. As mentioned above, the first assessment of the implementation of the European Commission Recommendation on Active Inclusion and its impact on national policies published in 2013 using data from 2008 to 2012 found limited involvement of the relevant social actors in the development and operation of inclusion policies. In France, for example, the experts group in charge of the assessment highlighted that “Although stakeholders, both unions and employers’ associations and persons suffering from poverty and exclusion, are particularly strongly involved in the Conseil national de lutte contre les exclusions [National Council against Exclusion], they are involved to a much lesser extent in the whole of the society, despite a large number of experiments”. Evidence from Italy suggests that inclusion strategies have different effects in different regions, with a particularly worrying lack of coordination both between different policies (housing, health, employment and training, for example) and between national and regional levels. In Poland, there would appear to be an ‘in principle’ adherence of national policies to the three pillars of the European social inclusion strategy, but inconsistent operationalization of the pillars within actual policy-making. There are, however, visible mechanisms by which social partners might become involved (the effectiveness of which will be explored within the AIRMULP fieldwork). Where Spain is concerned, implementation of the EU’s active inclusion recommendation has been found to be ‘patchy’. Here, general labour market vulnerability and high unemployment and poverty rates call into question the general EU-level assumption that “access to labour market equals relief from poverty”. Cases such as Spain may in fact highlight the limits of some of the European initiatives. In Sweden, activation to work has been a long and well established feature of, and a condition for access to, its universalistic welfare state. This, however, has been challenged by the cuts to state support to help the unemployed find jobs, and the increased, arguably ideologically driven, shift towards individual responsibility, the result being an increased divide between protected workers and unemployed. In the United Kingdom, much of the rhetoric around the re-definition of social and labour policies is based on the concept of ‘welfare-dependency’. The UK case is particularly interesting, however, given the diverse responses of the smaller nations (Wales, Scotland and Northern Ireland); the role of the private providers (who are incentivised via payment by results schemes); and the incentives for employers to become engaged in job creation schemes given the low costs of doing so. Systematic consultation on these matters has been abandoned in recent years.

Many national accounts highlight that the political orientation of the government in power is central in steering the direction of social policies, this being at odds with some arguments within the literature pointing to the homogenization of some European policies. This in itself points to the renewed importance of comparative research, to provide critical analysis of European policy comparisons and benchmarking that are frequently undertaken in a hurried, decontextualised or even manipulative manner. Our research methodology has been designed accordingly, relying on a solid analysis of the statistical data concerning active inclusion policies; on desk research on the available literature on current legislation, relevant case law at EU and national level, collective agreements and social trilateral negotiations; and finally, in-depth interviewing of representatives of the social partners at different levels (EU, national and territorial) in the six countries.

The AIRMULP research, therefore, by shedding light on the complexity of the actors’ strategies involved, the power relations between them, and the diversity within national countries, aims at providing new answers to old questions of whether, how and under what conditions organized employment relations can contribute to better labour market governance. It is unlikely that the research will prove definitive. Nevertheless, the early evidence is that when European policy-makers forget industrial relations in their employment reforms, they do so at their own peril.

Extract from:

Warwick Business School, IRRU Briefing, Number 24, Spring 2015.

About Manuela Galetto

Manuela Galetto is assistant professor of industrial relations at the Warwick Business School. She holds a PhD in Labour Studies from the University of Milan. Her research interests are in comparative employment relations systems and trends of the changing mechanisms of workforce governance.

About Guglielmo Meardi

Guglielmo Meardi is professor of Industrial Relations and director of the Industrial Relations Research Unit of Warwick Business School. His research interests are: European integration and industrial relations, including both multinational companies going East, and employees going West. His current activity is on comparing industrial relations and internationalisation in the six largest EU countries.