Social Exchange In The Crisis – 2010 The Turning Point

jean-marie pernotA genuine social dimension of Europe is not possible without the participation of those primarily benefitting from it and therefore the participation of their representatives. Collective bargaining, the social dialogue, has been established in the member states over many years and it ought to be extended to the European level. This is a complex task which first of all requires adherence to and the promotion of the principles of social exchange by the countries making up the Union. The turning point of 2010 has instead created a further distance from these democratic goals.

Since the 1980s, the systems of employer-labour relations have been affected by two major developments which have to various extents taken place in the countries of the EU: on the one hand a gradual diminution of the number of employed persons belonging to trade unions and on the other hand a trend towards decentralisation in collective bargaining with a general shift towards the company. This decentralisation has in general been conceded by the trade unions because of their weakened position in the relationship.

Whether coordinated or not, and rather less and less coordinated, collective bargaining has since 2000 gone through a fairly significant formal and substantial development, with three aspects: the first is reflected in the development of the number of workers covered by collective labour agreements which has diminished in the countries where extension procedures are non-existent or little used, leaving an increasing number of workers outside the scope of the negotiated standard; the second development, which has also varied in intensity from one country to another, concerns the inter-occupational agreements or sectorial agreements with an increasing number of saving clauses enabling companies to make adjustments in accordance with the local situation, or indeed the possibility of derogating from the sectorial agreements. The third development pertains to the question of wages, with increasing individualisation which has contributed to reducing the part of the wage that has been effectively negotiated.

However, there has been a turning point in these long-term developments, less so in 2008 when the financial crisis broke out than in 2010 when the crisis changed into a “public debt crisis”.

In the first phase (2008-2009), a number of countries reverted to the tripartite “social pact” formula initiated by the state, as existed in Europe at the beginning of the 1990s. Confronted with the emergency, the states have tried to control the massive threats to employment. The number of hours worked had dropped considerably in all the countries concerned and the challenge was to find formulas that would attenuate the impact on employment and living conditions. In 2010, austerity further tightened wage constraint, at times transforming it into a massive regression. In the countries put under the surveillance of international institutions, the adjustment has been drastic and has been imposed despite social protests. In Greece, in Spain and, even more radically, in Italy, the contractual construction melted down in no time as a result of labour market reforms.

In Italy like in Spain, the trade unions’ strategy has not been to incite protest. They have endeavoured to engage in arbitration, thus preserving their role as negotiators. Radicalisation, equally in Greece, Spain and Portugal, has been the response to the haphazard austerity which deprived the trade unions of all room for manoeuvre. In Greece, genuine political risks continue to pose a threat to democracy.

Elsewhere, mostly in northern Europe and in France, increased wage restraint has reflected the dual need for protecting the employment of workers and the competitiveness of companies. At formal level, it has moved towards extending saving clauses, greater freedom of adaptation for companies and, going hand in hand with this, a strong involvement of the state to change the regulatory and financial framework. In the countries of northern Europe, the trade unions adopt this strategy of exchange between wages and jobs in the industrial systems which continue to be for them the best source of income and employment for the future. The core of the production system is thus preserved but the periphery of low wages and precariousness continues to expand. In the countries of southern Europe, on the other hand, among which Ireland should also be included, the radical adjustment has eliminated any room for compromise. Those who made their voice heard in social protest have often considered the trade union movement as an agent integrated in this system which pushes a large part of the population into the margins. Elsewhere, where a certain amount of power has been retained by the trade unions, the challenge has been to prove its ability to integrate. The portion of the labour force on which the trade unions have any influence is dangerously shrinking, calling their capacity to embrace the solidarity-based defence of the workforce into question.

France, as is often the case, is somewhere in between. Collective bargaining was decentralised well before this happened elsewhere, and for a long time now coordination by the companies is no longer assured. The annual bargaining round inevitably concerns a third of workers in the private sector, with the remainder abandoned to minimalist sectorial regulation and, in terms of wages, largely dependent on the SMIC minimum wage policy.

In an assessment of the social dialogue in the crisis, form cannot be separated from content: most of the countries of western Europe have extensive procedures for negotiation or mutual consultation. What is important is not knowing whether the consultation rituals have been maintained, whether the representatives have met or have signed agreements but whether, in the final analysis, this dialogue has made it possible to reach genuine social compromise: the extent of the economic shock, the long history of the systems of social relations places a burden on the situation today. While the trade unions have in general adopted a pragmatic attitude with a view to preserving the values of collective bargaining, one cannot but recognise that apart from a number of cases, now exceptional, there is currently a trend towards more cohesive state intervention and reducing democratic procedures that underpin the abovementioned European social model.

This article is part of the EU Social Dimension expert sourcing project jointly organised by SEJ, the ETUCIG Metall, the Hans Böckler Stiftung, the Friedrich-Ebert-Stiftung and Lasaire.