Social and Labour Market Policy

The Basics

Bent Greve

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351366434
• Edition: 1
• Topic: Social Sciences
• Subtopic: Social Work
• Index: Social Sciences

Social and Labour Market Policy: The Basics is an engaging and accessible introduction to the subject, which explores the broad historical, social and economic factors which have affected the differing types of social and labour market policies found in welfare states. Drawing links between social policy and labour market policy the book explores key introductory topics including:

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• Defining what we mean when we speak of social policy and labour market policy

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• Historical origins including Bismarckian and Beveridgian reforms

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• The range of social issues social policy aims to address, e.g. housing policy and child provision

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• Showing how social policy enhances well-being

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• Ideas and ideology and the effects of globalisation

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• The functioning of the labour market.

Social and Labour Market Policy: The Basics provides readers with an understanding of their importance to the development of contemporary society. This book is suitable for students of social policy as well as students taking a social policy module as part of a wider course within politics, social work, health care, sociology and economics. Researchers interested in the field will also benefit from reading this book.

1
What is it all about?

1.1. Introduction

In all societies, there are different kinds of social and labour market policy. Rich societies often have a more developed focus on such policies and have developed what is labelled welfare states. The degree of, approach to and types of welfare financed and delivered by the state – or other actors – varies between countries. This can often be ascribed to historical traditions, ideas and a certain kind of path-dependency. Still, there are many and diverse ways of supporting people with different kinds of needs and in dissimilar social circumstances. These ways have also changed over time because of development in societies, increasingly open societies and new ways of producing goods and services, including fewer jobs in traditional production in the agricultural and industrial sectors.

Furthermore, economic development with, in most cases, societies growing richer has also caused a shift away from nearly all social security being taken care of within families and/or churches and other voluntary organisations, and towards a role for the market and companies. Gradually, there has been a move towards the approach of stronger state influence, or at least some state involvement. State regulation of social and working conditions, such as child labour being made illegal and other types of regulation have gradually developed over time. The interplay between nation states and supranational entities, such as the European Union (EU), has also influenced the development of these issues, and economic and political pressures due to globalisation have also had an impact.

The development of social and labour market policy has not merely happened in a vacuum, but it has been framed by options (political and economic), conflicts and pressure from interest groups for changes. There are thus not only different connotations of what social and labour market policy is, but also many other issues at stake for groups in society with different needs and the willingness to pay for welfare.

Despite this, the concepts are not clear, an issue to be returned to in Section 1.3. This first chapter focuses on what the concepts of social and labour market policy are and how they can be understood. It begins with a short historical depiction of the development, using the lenses of old and new social risk (Taylor-Gooby, 2004) as a way to see how policies have developed. The new social risk can be described as “the risks that people now face in the course of their lives as a result of the economic and social changes associated with the transition to the post-industrial society” (pp. 2–3). The old risk related to the movement from the countryside into the cities, resulting in the need for support when people became unemployed, sick, old and after an industrial injury. Not only does the historical transition influence policies, but also the ongoing changes in society’s structure affect the possible need for public support for welfare.

It is also worth emphasising some of the central themes and persons having been influential in the development of the policies, as this to a certain extent helps in understanding the present day’s social and labour market policy. This is set out in Section 1.2.

The first chapter ends with a short overview of what to expect in the book.

Overall, the aim of the book is to present and discuss the following issues:

1. a) What is social and labour market policy?
2. b) The principles for delivering social and labour market policies
3. c) Who are the central actors and what is their interest?
4. d) How do policies differ among different countries – and for what reason?
5. e) What influences the development?
6. f) What does and does not work in the field?
7. g) What is the overall impact on societies’ development – including redistribution and level of equality?

This is done by presenting core concepts, discussing and analysing changes in the field, and using existing studies and new data to show what social and labour market policy actually is, and how it has been developing in recent years. It emphasises that a concrete way of implementing policies varies across countries, so that how the system looks in one’s own country cannot be used as an indication that this is the way it is in all countries. The focus is on principles, but examples of concrete approaches are given. The presentation of concepts and issues is also interpreted in line with expectations for changing societies in the years to come, such as technology’s impact on the number and types of jobs, and the possible implication not only for labour markets, but also in the way social policy can have a role, including difficult issues related to financing welfare in a global technological world.

1.2. Historical trajectories

Social and labour market policy as it is today has not just appeared overnight. In most countries, it has in fact developed over a long period, starting with a few areas and gradually moving into broader and more encompassing coverage. Sometimes this development has been along the same path; however, in relation to retrenchment, re-calibration and break-up, the development has sometimes not taken the historical path. Changes are sometimes done in line with the ideological stance of incoming governments, and sometimes as a consequence of external economic circumstances. Changes have also come about as a consequence of new ways of living and new types of social risk. Therefore, even if the historical ways of delivering and financing social and labour market policy are no longer in existence, they tell the story of what the policy is and the reasons why the systems look like they do. Historical development is also framed by the fact that countries today are more affluent than they were in the heyday of the development. Therefore, it has been possible to bring new aspects and elements into what is provided by the welfare state, and also how generous the different welfare states are able to be. This also reflects the increased expectation of citizens (and voters) of the level of benefits and size and quality of services available. This is not so say that cutbacks and austerity measures are not important, as several countries, over time, have witnessed even stronger changes with less spending on welfare policies. This section paints a snapshot of the development by looking into a few central people’s ideas and contributions to the historical development, and hereby pointing towards important aspects of the development, and also, implicitly, the central concept. How this is then related to social and labour market policy is more elaborated in Section 1.3.

Although state involvement in social and labour market policy is relatively new, a poor law was enacted in England in 1388, with the aim that local areas should provide support for individuals. It was changed in 1834 to make it more general, and workhouses were established where those in need of support should work. In many countries, poor laws have been the first approach towards social policy, and often with a distinction between those who were seen as deserving compared to the undeserving. Poor laws were later often changed into what we know today as social assistance. A distinction between deserving and undeserving is not often used in public discourse today, but habitually it implicitly lies beneath policy, in the form of those who deserve support are those who have been working hard and are in need of support due to reasons beyond their control; see also Chapter 4. The historical level of support was a long way from what we understand today as generous social policy, and, in most countries, families and churches were central in supporting those in need.

Otto von Bismarck is often labelled as one of the founding fathers of that part of social policy as we know it today. In Prussia in the 1880s, compulsory social insurance schemes in relation to sickness, industrial accidents and old age (e.g. pensions) were established. The development is often argued to be due to, and developed as, a wish to reduce the political pressure in the wake of industrialisation, where families not having in-family support who moved to the cities in order to get a job might in cases of unemployment or industrial injury be without any support, which could lead to social unrest. This way of providing benefits (social insurance), especially for those who are in the labour market, is still today the main element in many countries of the central European social policy. Thus, it emphasises the impact of path-dependency even in today’s welfare states, which are often built upon historical decisions. However, this does not imply that it cannot be very different from the way the system is now, which is the case in many countries – regarding who has access to benefits, the conditions to receive benefits, and the level of benefits, etc. compared to historic cases. Still, the social insurance principle has played a strong role in the development of social and labour market policy in many countries.

Another central person is John Maynard Keynes, who has been very influential in economic thinking in relation to his writing, especially in the 1930s. For this book, the central aspect is that government can influence the overall economic development, and by public initiatives influence the general level of employment and unemployment. Roosevelt’s New Deal in the United States in 1933 is also an example of the thinking that the use of government intervention, by, for example, building infrastructure such as roads, railroads and harbours could have an impact on the number of people in jobs. The simple idea being that those doing the work would be employed, and when they have money to spend this would increase the demand for goods and services and thereby for others to work in the economy, and in that way influencing the overall economic development; see more in Chapter 5.

Sir William Beveridge is another central name in the development of welfare states, and, as a consequence, what is important in the fields of social and labour market policy, as argued in the report written during the Second World War: “Want is only one of the five giants on the road of reconstruction, and in some ways the easiest to attach. The others are Disease, Ignorance, Squalor and Idleness” (quoted in Timmins, 1995, p. 23). From these five giants were developed the ideas and principles towards the building in the United Kingdom of what we today label the liberal welfare state, but they have also influenced the Nordic welfare states’ more universal approach, which – albeit at a later stage – developed in a more generous, encompassing and universalistic direction. Beveridge’s ideas included the universal provision of welfare and the ambition of full employment, but also flat-rate means-tested benefits at a low level, financed overall through general taxation. Comprehensive health care and support to children were also included. Overall, it was argued that the welfare system should be built upon three elements. These were: a) social insurance for basic needs, b) national assistance for special cases and c) voluntary insurance for assistance above the basic level.

The golden growth of welfare states (Esping-Andersen, 1996; Esping-Andersen, 1999) is often labelled as the time from around 1960 to the start of the first oil-price crisis. Due to economic growth, increasing prosperity and, in many countries, the possibility of, at the same time, increasing private as well as public consumption, it was argued that this would keep the unemployment rate low and with stable economic development. In this era, it was further common wisdom that societies, by accepting Keynesian intervention, would have an option to steer the economy in such a way that negative repercussions on living standards could be avoided. The working class and trade unions were strong, and tendencies towards more equal societies were on the agenda.

The first and later the second oil-price crisis with a quadrupling of oil prices caused an increase in unemployment and inflation and a stagnation of economic development. This, together with criticism of welfare states for being too bureaucratic, caused a growing discontent with social and labour market policy. Overall, it can be argued that, as it was carried out at that time, policies shifted from overall acceptance of the expansion to criticism, including retrenchment and privatisation (Miller, 1990). Further, the Organisation for Economic Co-operation and Development (OECD) declared the welfare state in crisis (OECD, 1981). This was primarily due to the lack of ability to steer through the crisis with the instruments used earlier, and of entering a time of stagflation, for example low, if any, economic growth and high levels of inflation. This gave rise to a belief in a more liberal or neo-liberal approach, where the state’s role in social and labour market policy was questioned, and with a stronger focus and ambition to bring back the market as the central institution in delivering and financing in relation to social and labour market policy.

Whether spending is a burden or whether social policy also has a positive role has come to the fore in several ways in recent years, including Giddens’s Third Way (1998); see also Morel, Palier and Plame (2012) on social policy as investment, for example, the debate on the social-investment state.

Since then, there have been ongoing discussions on the central aspects related to the policies, such as:

• the size and depth of social and labour market policy (including what can we afford)
• how to implement the policies
• how to ensure the policies are efficient
• how to reach the target groups
• who will have to pay, and in what way
• what the impact of policies is on inequality

These six questions stand as central parameters for the presentation in this book.

These debates are often framed in different ideological positions, but also in how different professions and interest groups see the need to bring their field more into the core of the social and labour market policy; see also Chapter 5.

Voters’ support has also varied, dependent on the type of social and labour market policy. This includes the indirect issue of the deserving and the non-deserving; see more in Chapters 2 and 4. Support from voters is part of the legitimacy of welfare states, and, often, high on the list has been support for health care and the elderly.

1.3. What is social and labour market policy?

Overall, social policy can be seen as central policies in welfare states, for example, social security, education, health care and housing. It might even reflect labour market policy, albeit in this book labour market policy is treated separately.

Often, social policy is, at the central level, taken care of in a ministry of social security, but has different names in different countries (social policy, family, children, elderly, etc.). Thus, aspects of social policy can be found in several ministries. Social policy is often analysed using a large variety of disciplines in the analysis – such as combining a variety of the following theoretical approaches: economics, sociology, political science, anthropology, philosophy, history and law. One could, perhaps, argue that social policy analysis is, by now, a discipline in itself, as there often is a need to look into several disciplines in order to understand the development and the way the policy is decided, implemented and financed in different countries. Still, in most countries, the ministry of finance also influences policy by setting the budget for social policy.

There has been, and perhaps still is, confusion about what social policy is, and th...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of figures
• List of tables
• Foreword
• List of abbreviations
• 1. What is it all about?
• 2. Elements of social policy
• 3. Aims of social policy
• 4. Crisis and new ways in welfare states
• 5. Ideas and social policy
• 6. Labour market policy
• 7. Active labour market policy
• 8. The future