Europe's Left and the Unemployment Crisis

...In some countries, notably Britain, action to help the under twenty-five-year-olds into paid work is coupled with tough welfare-to-work policies designed to encourage those in the most vulnerable parts of the labor market to take up paid employment...

...Before the arrival of mass unemployment, the social model was under threat in Brussels...

...So far, labor market measures are protecting those in full-time jobs, mainly in private manufacturing...

...Workers in that sector tend to belong to trade unions and have recognized and badly needed skills...

...But what has mostly been overlooked is the primary reason why the center-right proved to be such a resilient force...

...The lengthening jobless queues failed to provide any genuine boost for the Left...

...They offer temporary palliatives, not lasting solutions...

...The return of mass unemployment on the continent is thought to result from cyclical factors like lack of demand and stagnant export markets—as well as from structural change in the occupational composition of Europe’s labor force...

...A recent study by the Brussels-based European Trade Union Institute has demonstrated the widespread use of collective bargaining agreements at plant and company level to ease the employment consequences of the crisis...

...They remain essentially ad hoc and limited, and they are based on the assumption that the current troubles in the labor market are only temporary...

...It was not because it was identified with any narrow conservatism or nationalism...

...The return of mass unemployment has tested the existing social model and for the most part has underscored its importance in ensuring stability...

...The relatively generous benefits of the welfare state in Germany are being upheld and even improved to make sure that workers who lose their jobs do not suffer any dramatic fall in their living standards...

...In fact, it has found wide support across much of the continent...

...This will not be easy...

...They are the insiders in what is becoming an increasingly fragmented and diffuse work force...

...But at the same time, they are dismissing agency workers employed on shortterm contracts and those who are temporary and unskilled...

...The social democratic Left argues that it will require a radical shift in economic and financial strategies to create the conditions for a return of real employment growth and “good” jobs, but in the immediate future, as I have suggested, the pressure is in the other direction—for cuts in public expenditure, reductions in national debt, and a degree of fiscal restraint that together threaten to overwhelm the tentative signs of economic recovery...

...But in 2010 Europe’s mainstream left will face a formidable problem...

...Plans to make labor more flexible in response to what is happening are also being encouraged as Germany’s well-established social market continues to reflect a broad political consensus in response to mass unemployment...

...Those optimists who see mass unemployment as a temporary stage on the road back to a buoyant labor market will be disappointed...

...The institutions of the European social market model were designed for them and for a relatively stable employment system...

...The jobs outlook is particularly bleak for the young, those aged eighteen to twenty-five...

...In most countries, the social democratic parties suffered substantial losses...

...In recent years the European Union—a distinctively social democratic project—was unable to generate business innovation, strong labor productivity, and better skills training and education...

...The breakthrough of the labor movement came when it was able to reach out to the uneducated and the vulnerable, to all those whose working lives were characterized by insecurity and exploitation...

...Trade unions are cooperating with companies in agreed programs to ease entry into full-time employment for the young...

...It seems that fear of inflation remains stronger in Europe than fear of unemployment...

...State subsidies for part-time work and shorter working hours in the private manufacturing sector seems to have had some positive impact even if they upset liberal economists and breach European Union legislation...

...But unless we can develop a new social democracy that reflects the needs and demands of today’s fragmented and incoherent workforce, the center-left will face a long period of decline and stagnation...

...Rather, it reflected the values and policies of the continent’s famed social model of which the center-right was always a crucial cofounder...

...Only a handful of far right candidates were returned to Strasbourg, and these were confined to a few countries—Hungary, Belgium, and (dismally) the United Kingdom...

...What does massive unemployment mean for democratic politics on the continent...

...But they represent a shrinking elite...

...The resulting agreements have been reached through the existing system of collective bargaining...

...These are obvious steps, but much more is necessary...

...At the same time, political parties that advocated neoliberal solutions of unfettered markets, low taxes, deregulation, and a minimalist state made few advances either...

...Calls for policies that uphold social solidarity and cohesion went unheard...

...A new center-left European agenda for employment is urgently needed...

...Robert Taylor is an associate member of Nuffield College, Oxford...

...For migrant workers, many employed in private services and small firms, for contract workers, for women, the disabled, unskilled youth, and many other victims of the job crisis, the mainstream parties of the center-left have had little to offer...

...Critics of Europe’s social model in the past often argued that its principles and practices were formidable obstacles to the establishment of a prosperous and competitive European economy...

...The jobs crisis in Europe may be here for a long time...

...Whatever happens over the next few years to Europe’s financial markets and its banking system, we are likely to see high levels of joblessness in the “real” economy of goods and services, for a long time to come...

...The nightmare of a resurgent right-wing populism may then return with a vengeance...

...The traditional institutions of Europe’s industrial relations systems are proving adaptable enough to meet the jobs crisis in a structured way through social dialogue at all levels...

...A strong social model is the precondition for the future success of the EU’s project, and the return of mass unemployment gives an added urgency to what social democrats need to do...

...POLITICS ABROAD Europe’s Left and the Unemployment Crisis ROBERT TAYLOR Europe is suffering from its highest level of unemployment in more than a generation, and European social democrats have been unable to formulate an effective political response...

...Perhaps unsurprisingly, the U.S...

...Stronger social rights are required to reassure workers that they can agree to change without fear of exclusion...

...Only a handful of smaller West European countries—notably the Netherlands and Denmark—may be able to avoid the worst, but even there unemployment in 2010 will probably reach levels not seen since the Great Depression...

...In Germany, companies are using the state-provided shorttime working subsidy to hang on to the skilled workers they hope to employ effectively in the future...

...The German Free Democrats, who performed reasonably well, were the only exception...

...The social settlement first constructed in Western Europe after 1945 proved highly successful in creating prosperous democratic societies based on steady economic growth, a commitment to redistribution and equality, and a radical improvement in the well-being and status of workers...

...Governments and employers across the continent are seeking common ground with trade unions to develop coordinated approaches that can ease the dangers of social tension and slow down or avert plant closures and layoffs...

...This is why almost all the European countries have launched public spending programs to improve infrastructure such as roads and railways, encourage the creation of environmentally green products, and strengthen information technologies...

...There is much more flexibility in Europe’s labor markets than its critics recognize...

...As a result we are going to experience savage cuts in public spending and rising taxes in Europe that endanger any economic recovery and condemn millions more workers to a life without work...

...It is estimated that one in five of them are destined in the immediate future for a life without paid work...

...Efforts to exploit the deepening jobs crisis with appeals to racism and xenophobia proved less successful than might have been expected...

...Only New Labour in Britain continues to oppose the use of state financial support to underpin part-time work...

...More fundamental problems face any social democratic approach to the continent’s employment crisis...

...Efforts to modernize or expand the EU’s social dimension, to rebalance the rights of capital with those of labor, were often frustrated...

...model of capitalism remains as unattractive across most of the continent now as it did before the economic crisis...

...Can anything be done at the European Union level to combat the crisis...

...There is an obvious danger that social democrats will focus too much of their attention on the well-being of the core labor force and not enough on the “outsiders...

...It would be wrong, however, to see these developments as part of any grand design for the future of Europe’s world of work...

...Greater resources for skills training and vocational education are in evidence across Europe...

...they are covered by strong legal regulations and collective bargaining agreements...

...Companies such as Bosch, BMW, and Opel are using such schemes to retain their skilled employees through the crisis...

...For the time being, the combination of fiscal stimulation and flexible employment strategies may ease social and political tensions, especially when these measures are combined with a determination to uphold the generous benefits paid by European welfare states to the unemployed— most of whom receive up to 60 per cent of their previous weekly net earnings...

...In Germany, Chancellor Angela Merkel, and in France, President Nicolas Sarkozy were the big beneficiaries...

...Social democratic parties sought to make the continent’s unemployment crisis their main public policy priority, but they failed to reap any obvious electoral dividend...

...Employers are being encouraged through the provision of tax cuts and incentives to hire school leavers and university graduates...

...In Eastern Europe the jobs crisis is even more acute, with the resulting threat of widespread social and political unrest...

...What is missing from too much social democratic thought is any credible strategy of engagement with the new world of work...

...We have failed to examine what is wrong with our current world of work,” argues David Coats, assistant director of the London-based Work Foundation...

...He is writing a history of parliamentary socialism in Britain...

...Measures that establish minimum standards to deal with gender, ethnic, and other forms of inequality and discrimination in the workplace must be implemented...

...Job forecasts from authoritative bodies such as the International Labor Organization, the Parisbased Organization for Economic Cooperation and Development, and the European Commission make for grim reading...

...At the European as well as nation-state level, the informal sector remains unorganized and unrecognized...

...The European Assembly elections last June did not suggest that fascism is on the march after half a century of lying dormant...

...In the early part of the last century, socialism or social democracy became the all-embracing political ideology that provided the inspiration and hope for millions of workers across national frontiers and brought a strong coherence to center-left politics...

...Even more significantly, most West European states have responded to the jobs crisis in a positive way by adapting the flexible social market approach and offering protections and incentives for companies and workers in key areas of the economy...

...Next year and beyond, governments will need to exercise restraint in their spending programs and introduce cutbacks to ease their country’s burgeoning debt burdens...

...There are dangers of rhetorical hyperbole in likening Europe’s current unemployment crisis to that of the inter-war years...

...The center-right made impressive gains as well in Spain, the UK, Italy, and Poland...

...Of course, there can be no return to such a world...

...The German experience is especially revealing...

...Monks regards both Merkel and Sarkozy as social democrats in all but name and believes most European governments have gone as far as they can in implementing measures to bail out the banks and stabilize the financial system...

...In important ways, the European labor market is regressing to the structures of the nineteenth century—to the world of insiders and outsiders, of the skilled and the unskilled, the organized and unorganized...

...The German state is providing subsidies of between 60 percent and 67 percent of net wages to workers in firms in the auto, chemical, and metal industries to meet the extra cost incurred in shortening the length of the working week for a limited period of time, without loss of pay...

...As the ETUI paper argues, “The existence of an inclusive multi-level system of collective bargaining is an important condition for the adoption of cooperative company plant level agreements on flexible working time...

...Generous severance schemes are assisting in the redeployment of workers...

...The Christian Democratic/Social Democratic government in Berlin—in close alliance with the country’s employer associations and trade unions—has sought to mitigate the consequences of decline in Germany’s manufacturing export sectors with measures designed to assist companies through the crisis...

...Europe’s center-right governments have become the sturdy defenders and promoters of social democracy in their responses to the unemployment crisis...

...There is also wide agreement that urgent action must be taken to improve the position of young workers, particularly those with few or no educational qualifications or recognized skills...

...The Left in Europe lacks a coherent narrative,” argues John Monks, general secretary of the Brussels-based European Trade Union Confederation...

...The number amounts to more than twenty-four million people, and looks set to rise across the continent even if the European economy as a whole starts to grow again next year...

...In fact, the opposite is true...

...Now the downfall of neo-liberal capitalism and a revived sense of the importance of an activist state open the way for the continent’s center-left to seize the initiative...

...But severe limits remain on whether any of these measures can become permanent...

...This has resulted in soaring public debts that cannot be sustainable for long and need to be serviced and paid back...

...Although there is no reason for complacency about the social and economic distress we can expect, current political signs suggest that right-wing populism will remain on the fringes...

...Today’s unemployment crisis challenges European leftists to establish a new social market model that reflects the realities of a very different world of work...

...Unless these parties and their trade union allies respond in more creative ways, the “outsiders” are going to look elsewhere for political help...

...In practice in the past, capital and labor were always more pragmatic and consensual than their often militant class war rhetoric might suggest...

...But all these publicly funded measures to tackle joblessness are bound to be limited...

...This year, governments of all shades have sought to rescue the banks and the European financial system through massive injections of borrowed capital...

...Public resources are also being channeled into enhanced skills training...

...Despite the obvious strains, this remains true in these harsher times...

...Only Greece, Denmark, and Sweden defied the trend...

...Despite this, the European election results were a disaster for mainstream social democracy...

...One in ten of Europe’s workers are without paid work...

...Much of the European electorate remained unconvinced that the Left can provide credible answers to the crisis...

...The real winners of the elections turned out to be the parties of the mainstream center-right...

...The massive growth in the private services sector and the expansion of small firms makes it much more difficult to pursue public policies based on the social model...

...A similar approach on employment subsidies can be found in France, Denmark, and the Netherlands...

...Recent school leavers and university graduates face a particularly tough time...

...It is the center-right [politicians] who are sitting in the driver’s seat because they accept and are carrying out what are basically Keynesian economic policies of public expenditure and fiscal stimulation to deal with the crisis...

...Today there are millions more who do not belong to a trade union, who are not covered by collective bargaining, and who do not have strong, legally enforceable rights...