- The future was a Developmental Welfare State
- Then came the recession
- Opportunity in crisis – responses to unemployment
- Developing a flexicurity model
- Applying the principles of ‘active inclusion for all’
What future lies ahead for the Irish welfare state?
- Department of Sociology, National University of Ireland, Maynooth
Beginning by outlining the pre-recession aspirations for an active Irish social policy, the article then examines the recent political economy of social policy and the cumulative impact of the National Asset Management Agency, the Report of the Special Group on Public Service Numbers and Expenditure Programmes (McCarthy, 2009), the Commission on Taxation (Government of Ireland, 2009) and Budget 2010 on unemployment, social expenditure, poverty and inequality. Assuming a Developmental Welfare State is still the aspiration of Irish social policy, it explores three different models of activation; flexicurity, mutual obligations and active inclusion for all. Arguing for a flexicurity model strengthened by incorporating principles from Active Inclusion for All (EAPN, 2008) that promote a less punitive approach to activation; the article ends by considering how to gender the life cycle approach and concludes strong political leadership is required to move in this direction.
This article begins by reminding the reader of the 2005 aspiration for an Irish Developmental Welfare State. It then reviews the political economy of social policy as contextualised by the cumulative impact of the three major policy processes of 2009: the National Asset Management Agency (NAMA), the Report of the Special Group on Public Service Numbers and Expenditure Programmes (the McCarthy report), the Commission on Taxation (Government of Ireland, 2009) and Budget 2010. It examines how the twin dynamics of increased unemployment and decreased social expenditure might impact on poverty and inequality, and examines the extent to which the current recession and government’s chosen policy instruments to tackle the fiscal deficit and banking crisis will impact on the Irish welfare state. With the objective of contributing to debate about Irish social policy, the article reviews three different models of activation; flexicurity, mutual obligations and Active Inclusion for All. It concludes that the recession offers sobering reminders of the need for security and that flexicurity is a model of active social policy that can address the type and scale of vulnerability and insecurity that will be an inevitable part of a riskier global economy of the twenty first century. The article then reviews what policy direction a model of flexicurity points towards and whether it can be strengthened by including principles from Active Inclusion for All. It draws attention to the need to gender the life cycle approach to social policy and the need for a maximal rather than minimal approach to the role of social security in active social policy. The article concludes that strong political leadership is required to move in this direction.
The future was a Developmental Welfare State ToC
In 2007 the future of Irish social policy looked well mapped out. Ireland aspired to be a Developmental Welfare State (DWS). The concept of a DWS was first introduced to Irish policy discourse in NESC (2005). NESC conceptualised a welfare state based on three overlapping domains of welfare state activity; by far the most important domain was that of ‘core services’, these were supported by ‘income supports’ where and when needed, and also by a series of ‘activist localised measures’ to enable and support economic and social participation. This DWS drew directly on the concept of activation inspired by the Dutch or Danish model of flexicurity, a welfare system that offered people security but enabled people to be flexible in adapting to ongoing and inevitable labour market change. Many public servants and social partners were optimistic that this strategy, if delivered, could offer a significant reform model with real benefits for both Irish society and the Irish economy.
NESC (2005: 155) argued that in contemporary Ireland access to core services has ‘a wholly new resonance; they underpin the social and economic participation of an increasingly diverse population and enhance labour market flexibility and competitiveness’. The provision of such services would require reform of existing services like education and a hastening of the development of innovative services to meet universal needs, for example child care. The second domain refers to the range of income support measures. These, NESC argue, should be based on the need to provide adequate subsistence and participation in society. NESC proposed that income support measures be differentiated by life stages with particular emphasis on children and the elderly. With regard to older people there is a need to ensure that those who have retired from work are not living in poverty and to make state pensions accessible and adequate for all retired people. In childhood ‘parental circumstances should not be the cause of any child being denied access to key developmental opportunities; while all children are supported, some are supported more than others (ibid.: 157). Payment arrangements for people of working age should be delivered in a more conditional framework tailored to support employment or other social activities. This would be facilitated by the improvements in core services; as the labour market becomes more inclusive for those of working age this will lead to higher employment rates. Whether such arrangements are supportive (through for example earned income disregards and employment incentives) or punitive (through for example sanctions such as loss of payment for failure to take up offers of employment) is not entirely clear. On balance however the emphasis is towards a more supportive type of activation than a conditional workfare model. The third platform of the DWS is comprised of innovative pro-active measures in which non-governmental organisations respond to unmet social needs. This would occur most frequently in the community and voluntary sector organisations funded by state agencies to provide services to communities and population sub-groups.
There was some dissent and critique of the DWS model (Murphy and Millar, 2007). Women’s groups argued that the three pronged life cycle approach incorporated only a partial analysis of how gender impacted on the life cycle and lamented the lack of focus on care in the model. Murphy and Millar (ibid.) discussed concern that the income support proposal could open up a more conditional participation income, questioned how universal services could be differentiated at delivery and worried that there could be two tier services, core services publicly provided and specialised needs provided on the cheap by a regulated third sector. They also queried whether the nature of the new relationship proposed between the ‘regulatory state’ and local activist service providers would further weaken the democratic role of civil society. There were questions about capacity to implement any or all of the recommendations, the lack of an implementation blueprint, the absence of cost implications and the need for further consultation with key stakeholders. Murphy and Millar (ibid.) also questioned whether NESC or social partnership processes was the correct governance process for developing such a key strategy and wondered whether a Ministerial initiated White Paper might have been taken more seriously in the political process.
Generally however there was good will towards the project of a DWS. The document was recognised as a political compromise, strategically but constructively ambivalent. It left open the way for a positive social democratic interpretation or a more negative neo-liberal variation of welfare reform. Subsequent political mediation of policy choices would determine the more precise direction of welfare reform throughout 2006 and 2007. Over 2006 and 2007 the life cycle framework and the agenda for more conditional income support for working aged social welfare claimants become embedded in policy discourse and the policy objective of ‘activation’ featured in key policy statements (Department of Social and Family Affairs, 2006; NAPincl, 2007; Government of Ireland, 2006). While some groups cautioned against too punitive an approach there was a general consensus about the move toward activation.
Structurally however, despite lofty objectives and discourse, we saw little evidence that things have changed in the Irish welfare state. The main features of Irish social welfare remain intact, a highly gendered male bread winner structure divided between relatively modest social insurance and social assistance payments and, at each end of the life cycle, some universal payments. Murphy (2008a) points to arrested development and a relatively ‘frozen landscape’ of welfare reform and relative to other countries no significant levels of reform towards an active social policy. In particular there was little significant institutional reform. A key question not addressed in this article is why there was such a missed opportunity in a time of plenty to use the key tool of active social welfare to tackle structural inequality and embedded risk of poverty. We look back now with the benefit of hindsight and ask what happened in the politics of welfare reform to cause this key opportunity to be missed (see ibid.).
Then came the recession ToC
If the period of boom and the Celtic Tiger was such a missed opportunity what is likely to happen Irish welfare in a period of bust or recession? Is it a period of desperation when all hope of reform and a more equal society will simply fade away? Or is it a critical juncture which opens up greater possibility of and political opportunity for reform? The political economy of social policy can be contextualised as the cumulative impact of the four major policy processes of 2009: NAMA, the McCarthy report, the Commission on Taxation and Budget 2010 and together these signal serious concern for the political economy of social policy. Cumulatively they spell out a model of development devoid of any social vision or social policy plan. These macro political economy choices signal a model or vision of development much closer to Boston than Berlin.
Three policy initiatives dominated Ireland in 2009; each has clear long term consequences for social policy. The establishment of NAMA to manage property related bad debts or toxic assets, transfers public resources directly to private banks and bank shareholders and in doing so socialises the risk attached to private profit making (O’Toole, 2009). In particular political and public debate has focused on the strategy of bailing out all banks (and in particular Anglo Irish Bank) at an unnecessarily high price. By adding greatly to the state’s debt burden, it effectively constrains state funding of social development over the next generation while at the same time maintaining or increasing wealth and income disparities. The Commission on Taxation which reported in September 2009 was required to recommend revenue neutral tax reform proposals thus ensuring Ireland remains a low tax economy. Retaining the present low corporate tax regime of 12.5 per cent maintains foreign direct investment at the centre of the Irish development model. Even in the context of revenue neutrality, the government in Budget 2010, with the exception of carbon taxes, did not proceed towards widening the tax base by introducing progressive tax reform options (such as property tax or standard rating pension tax reliefs). The combination of bailing out banks at an unnecessarily high price and refusing to pursue tax related revenue gathering policy options meant government allowed themselves only one option to manage the public deficit; public expenditure cuts. Public debate about Budget 2010 was framed in the context of the government initiated McCarthy report which proposed a long list of public expenditure cuts, the justification for which often reflected an underlying neo-liberal ideology that prized low social expenditure. While much of the proposed cuts in the McCarthy report went unimplemented, the report served its purpose of preparing the public and electorate for cuts in public expenditure. These cuts hit hardest on social welfare recipients and low paid public sector workers. Government also undermined capacity in public services like education and local development agencies. These cuts in income and cuts in public services impacted cumulatively in low income areas. There was no significant stimulus or investment in measures that could lead to meaningful job creation.
Such policy choices will embed and deepen Ireland’s status as a low taxation/low social expenditure model of development. As it is, the Irish percentage of GDP spent on social protection (18.2 per cent) continues to compare badly with not only high spenders France (31.1 per cent) and Sweden (30.7 per cent) but also the EU15 average of 27.5 per cent, the UK (26.4 per cent) and countries like Greece (24.2 per cent) and Portugal (25.4 per cent) (Eurostat, 2009). Loftus (2010) shows that Budget 2010 made the poor pay. How will social welfare cuts of almost 6 per cent (2009 loss of Christmas bonus and the 4.1 per cent cut in basic working age payments) impact on poverty and income equality? It is not clear how recent cuts and the recession will impact on relative income poverty rates. While relative income poverty rates are highly sensitive to decreases in social welfare they will also be impacted by how much median disposable income falls during the recession. Recent progress in reducing consistent poverty may evaporate as long term unemployment and welfare dependency means people will experience an absolute form of deprivation and hardship. Rising levels of poverty and related social implications have been witnessed by groups such as Society of St Vincent de Paul (see also Fahey and Hennessy, this issue), Crosscare and Ruhama and Women’s Aid. Fuel and food poverty and housing vulnerability are all more conspicuous.
The failure to make the connection between the fiscal crisis and social outcomes such as inequality and social or family disruption means the recession is likely to further deepen poverty, inequality and social exclusion, result in greater precariousness in income poverty, deepen the structural inequality that already characterises Irish society, increase an already high level of homelessness and ensure gender equality will be marginalised on the national political agenda. The biggest impact of the recession is likely to be a return to structural long term unemployment, a problem that was deeply embedded in the Irish economy up until the late 1990s (see also O’Connor, this issue). The policy debate about unemployment has to date focused primarily on economic rather than social costs (it has become a political mantra that one person unemployed costs €20,000 in revenue foregone and cost of social welfare). We hear little of the costs to people, the social price people and communities are paying for unemployment (see also Harford, this issue). Bell and Blanchflower (2009) show how unemployment leaves people stressful and unhappy, the psychological imprint of joblessness leads to loss of self esteem, fatalism and loss of control over daily life. This is associated with a physical impact to health, heart disease and poor diet. We know the longer the period of unemployment, the harder the re-entry. They demonstrate how younger unemployed carry forward a 20 per cent ‘wage scar’ all of their working life. While the social and personal cost of unemployment is shared very unevenly across communities, at a more general level unemployment also causes an increase in general unhappiness and insecurity.
It is hard to square this scenario against the optimistic and positive language and aspirations of the DWS and Towards 2016, and their key policy goals concerning poverty, inclusion and equality. However taking an optimistic stance that there are always opportunities in crisis, this article argues that, despite the above analysis, this critical juncture can and must open up space for imaginative policy reform. The article ponders what social and economic models might usefully inform the nature and direction of a post recession Irish welfare state. The article concludes there are opportunities to improve our existing development model by, for example, gendering the life cycle approach to social policy and adopting a maximal rather than minimal approach to the role of social security in active social policy.
Opportunity in crisis – responses to unemployment ToC
A recent NESC (2009) report draws attention to five interrelated Irish crises; banking, fiscal, economic, social and reputational. NESC argues that a credible plan for national recovery needs to be based on an integrated response to the five part crisis and that any short term responses need to be informed by a long term logic. A sixth crisis is also evident in the failure of our political institutions and leaders to manage the aforementioned crisis (Hardiman, 2009; O’Toole, 2009). In particular many social commentators have drawn attention to the lack of any plan to manage the most significant human manifestation of economic crisis, unemployment or a jobs crisis. To date there is no major policy initiative to respond to unemployment and no political response to the horrific growth in unemployment. The fire fighting nature of the recession, the pressures of service delivery of weekly social welfare payments to hundreds of thousands of unemployed has certainly refocused whatever policy ambitions the Department of Social and Family Affairs might have had for a more active social policy. Welcome improvements in service delivery such as quicker payments, are already being diminished by the system’s inability to respond to growing need and risk associated with over 13 per cent unemployment. The priority has shifted from activation to simply getting people their payments in a time frame that avoids social unrest. This pressure on public services to deliver even basic services is also reflected in FÁS employment service capacity to meet basic National Employment Action Plan (NEAP) three monthly targets for activation interviews. Planned extension of the NEAP to lone parents and people with disabilities has now been quietly put away. This de-emphasis is worrying. A political concern with the rising live register, while understandable, back tracks on commitments to extend activation policy to groups traditionally seen as outside the scope of employment policy. The employment needs of lone parents, qualified adults, people with disabilities and carers could fall off the political and policy agenda. This sharp u-turn on the slow road to equality or active inclusion and the underlying agenda of focusing on managing predominantly male live register unemployment may be difficult to reverse.
The tenor of recent debate about social welfare payments and fraud has reminded many of the 1980’s rhetoric of deserving and undeserving poor. The Budget 2010 decision to cut social welfare rates was presented as an ‘inevitable’ or ‘no choice’ fiscal necessity. It seems recession has been seized as political opportunity by those who want to establish Ireland as an ungenerous social welfare model and a more neoliberal welfare state. Economists like Micheal Casey (2009) argued against the principle of adequate social welfare payments, because ‘once benefits are conceded it is virtually impossible to reduce them later on’ governments are better to adopt a ‘prevention is infinitely better than cure’ strategy and keep benefits at minimal levels. Arguments for lower welfare are supported by a variety of myths: welfare is too high, the most generous in Europe; it does not pay to work; the cost of living has declined, welfare soared in recent years. These myths can of course be exposed. EAPN Ireland (2009b) citing OECD data from 2007 show payments to single claimants in Ireland are the third lowest in the EU15, while a family with two children receives just above the EU15 average. Welfare is not ‘high’ or ‘generous’, people depending on welfare are below the government’s own ‘at risk of poverty threshold’ (Loftus, 2010). You are not better off on the dole – not only single people but also those with large families get higher incomes from working on the minimum wage; the same is true up to the average wage. While the overall cost of living fell in 2009 the particular spending patterns of low income families meant they benefited least from falling prices.
Instead of this negative debate there is need for more hopeful debate with an intensified and urgent need to focus on job creation, retention and sharing initiatives, for using social policy to enable people to return to education, training and labour market participation, and for ensuring people have income adequate to enable social and economic participation. Policy paralysis seems to have been the response to date to Ireland’s urgent jobs crisis however a plan is needed now if Ireland is to avoid the structural unemployment experienced in the early 1990s. Communities can do little to resolve the banking crisis but there is much, with the right enabling leadership, that society can do to respond to unemployment. An emergency such as this requires all hands on deck but without a framework people cannot maximise their capacity or ensure optimum mobilisation of infrastructure, resources and people. How should we respond to the unemployment crisis? Where is the debate about policy options to respond to unemployment? From where can we find this framework? It seems there are three parallel frameworks to choose from, for simplicity we name them ‘flexicurity’, ‘active inclusion for all’ and ‘a mutual obligations activation’ and outline them in three paragraphs below.
ICTU (2009) argue that, to protect jobs and tackle unemployment, Ireland needs to adopt an Irish model of ‘flexicurity’ based on a Nordic or Danish vision of social economic recovery but ‘modified’ for Irish conditions. This model informed the social partnership analysis in NESC (2005) and Towards 2016. Put simply, flexicurity (derived from the two words; flexicurity and security) is a policy based on a set of common principles which aim, in the context of fast changing global economies, to enable rapid economic adaptation. The policy which originated in Denmark and the Netherlands in the early 1990s, works to enhance the flexibility of labour markets by ensuring unemployed workers and other socially excluded groups can make flexible transitions between work and unemployment. Decent jobs are crucial to this model of activation. Three principles inform flexicurity. These are periods of unemployment cushioned by (i) generous welfare schemes, (ii) workers while unemployed are obliged to remain work active by participating in active labour market programmes that up-skill people to (iii) return to employment in a changed labour market. The 2008 FÁS Labour Market Review (FÁS, 2009) refers to how the philosophy of flexicurity must be adapted to meet Irish circumstances. NESC (2008) argues the focus should be on protecting workers rather than specific jobs and that this implies; freedom for enterprises to restructure, high levels of unemployment benefit during job search, active labour market policies, and supports such as childcare, public transport and housing to promote mobility and flexibility. Forfás (2010) place heavy emphasis on up-skilling, re-skilling and work experience, and stresses the need for responding in demand led fashion to different labour market integration need of different cohorts of unemployed.
Mutual Obligations Activation
The OECD (Grubb et al., 2009) on the other hand, recommends intensification of activation and benefit control activity for the unemployed and other benefit recipient groups in an overall shift towards a more coercive approach. Citing ‘Work for the Dole’ programmes under the Mutual Obligation Australian approach, the OECD advocate using the social welfare system to pay for compulsory education, training or labour market participation. It differs from the flexicurity model in that it cautions against generous social welfare arguing instead that benefits be moderate. More common in Anglo Saxon welfare regimes, an important principle of this approach rests on the belief that activation contributes to declines in unemployment simply because such activation processes exist. This implies activation policy is as important for the political or policy message it sends out to society about the obligations of the unemployed as it is for the type of activation outcomes that the unemployed might pursue. Success is judged by the decline in numbers on the live register, there is less focus on where people exit to, how long they remain off the register and whether activation leads to long term enhanced social outcomes. In that context activation for the sake of activation may not lead to appropriate, quality or relevant activation programmes. There is little focus on the quality of jobs. This approach is receiving significant attention in Irish policy discourse. FÁS (2009) in their 2008 Labour Market Review note how OECD argues that greater resources should be devoted to activation measures and that activation measures, in their own right, contribute to an acceleration in the fall in registered unemployment. This approach to activation has been outlined in the OECD Irish report (Grubb et al., 2009) and promoted by FÁS in their Annual Labour Market Conference. The Fine Gael Employment and Enterprise front bench visited Grubb in January 2010 and he featured on a national current affairs programme (Frontline, 2010). There has also been speculation that Irish government departments might be reformed to make administration of benefits and employment support services more consistent with an Anglo Saxon approach to activation (The Irish Times, 2010).
‘Active Inclusion for All’
A third approach ‘Active Inclusion for All’ is an EU driven holistic strategy which stresses work for those who can work and inclusion for those who can’t work. This is the less performative or work focused of the three and stresses quality public services for those most distanced from and unlikely to access the labour market. In contrast to the OECD approach ‘Active Inclusion for All’ as a principle avoids punitive conditionality – the focus on reducing or cutting benefits when people fail to get or take up jobs offered, especially when reduced job opportunities exist. This is based on the belief that punitive approaches are more about getting people off benefits rather than into a decent job. Active Inclusion is built on three pillars; adequate income support, inclusive labour markets and access to quality services, and is being promoted over flexicurity as the best model by many social groups including the EAPN (2009a). Active inclusion shapes an ‘active welfare state’ by providing personalised pathways towards employment and ensuring that those who cannot work can live in dignity and contribute as much as possible to society. EAPN highlight severe shortcomings in the current implementation of the Recommendation on Active Inclusion, endorsed by the European Council in December 2008 arguing countries continue to pursue narrow activation strategies rather than fully integrated approaches which support access to adequate income and to quality services as well as access to quality jobs. Stressing the importance of services they emphasise the need for clearer analysis of the strategic function of ‘flanking services’, which play a key role in removing obstacles to sustainable work, including the key role of quality training and lifelong learning opportunities. EAPN argue the Active Inclusion recommendation and strategy should be mainstreamed and embedded in LISBON 2020 and in the European Employment Strategy Open Method of Co-ordination.
The question arises as to which of these three approaches will inspire the Irish model for active labour market policy. Are we moving away from the Copenhagen inspired and NESC DWS promotion of flexicurity as the model for Irish activation? Are we moving towards a more Canberra oriented OECD favoured model which stresses sanctions and keeps welfare low to encourage incentive to work (Grubb et al., 2009) or will an emerging EU Active Inclusion for All Employment Strategy become a more mainstream feature of Irish labour market discourse? While all three choices stress institutional reforms to achieve greater levels of activation they are informed by very different visions of the quality of life under which Irish people will survive periods of unemployment or activation. In particular they are informed by different approaches to conditionality. Whether activation arrangements are supportive (through for example earned income disregards and employment incentives) or punitive (through for example sanctions such as loss of payment for failure to take up offers of employment) is not entirely clear. While the DWS discussion of activation leant towards supportive conditionality it does seem that Irish discourse has shifted towards a harder more punitive form of activation that stresses obligations of the unemployed. On the other hand Forfás (2010) stress the need for a range of training, education and employment service opportunities available for unemployed persons, to improve their employability, taking into account differing levels of skills, education and experience. Crucially they argue these are more effective when ‘demand-led’ (ibid.: 37).
Developing a flexicurity model ToC
A long term logic, vision or a model of development is required to choose between these different recovery plans. Globalisation brings with it greater vulnerability and risk and heightens the need for security. The recession has highlighted the risky nature of Irish society and its political economy. Irish policy needs to recognise peoples’ vulnerability and aspire to protect society in the face of future risks and dislocation. Flexicurity offers a vision of how to proceed in the precarious and risky future of more vulnerable political economies. The recession therefore strengthens the ‘logic’ for flexicurity as a vision for social policy. Citizens want and need a social and economic model that maintains standards in and out of employment. Greater welfare effort is required to achieve this and people may well be willing to pay for this level of comfort and security. The logic of security and safety embedded in the model of flexicurity enhanced by some of the principles in ‘Active Inclusion for All’ could express a vision of an Irish welfare state. This could inform strategic choices about how to guide short term public expenditure reductions. The following sections explore what a flexicurity model, modified for Irish conditions and enhanced by principles of Active Inclusion for All, might require under three non-optional pillars; flexible employment regulations, active labour market programmes and generous social security.
On the first principle, flexible working, Ireland already has one of the most relaxed employment protection regulatory frameworks in the EU or OECD. Flexicurity also requires flexible use of the social welfare system to enable and financially support education, up-skilling, activation and job retention/creation programmes. With some notable exceptions, for example the innovative mid-1990s introduction of Back to Work, Enterprise and Education Allowances, the Irish system is relatively inflexible and rule bound. The traditional deeply embedded mindset has been to prioritise fraud control over activation. The Irish social welfare codes need immediate review and modernisation to enable maximum flexibility in the transition between welfare and work.
Active labour market measures
On the second principle, enabling transition to new forms of employment, Ireland has a relatively good record. Ireland spent 0.49 per cent of GDP on active labour market programmes in 2006 (Murphy, 2008b). This is significantly more than the 0.15 per cent of GDP spent by Australia, New Zealand and the United Kingdom, and is close to Nordic level investment of 0.64 per cent of GDP. However the efficiency and effectiveness of this expenditure needs significant enhancement (Boyle, 2005). FÁS, the main institutional provider of labour market training has clear infrastructural and capacity issues, and is already struggling to meet current objectives under the National Employment Action Plan (Murphy and Kirby, 2009). This is borne out in the March 2010 announcement to restructure FÁS. The OECD (2008) recommends institutional refinement in the roles of FÁS, the Local Employment Services and Department of Social and Family Affairs. Political leadership is required to move beyond historical institutional turf wars. Serious institutional reform is required to reconfigure relevant agencies towards the most optimal and sustainable use of labour market resources.
Educational disadvantage and unemployment are like opposite sides of the same coin. Forfás (2010: 22) show those with highest unemployment rates are: older low-skilled workers, younger age cohorts, (under 25’s, particularly those with low educational attainment) and those in 25-34 year old age cohort with PLC/upper secondary educational attainment or below. Ensuring that the current crisis is used as an opportunity to redress such embedded educational inequality requires new educational interventions designed to be relevant to key target groups including young male early school leavers (see also Maxwell and Dorrity, this issue). These will not be short courses. Changes are needed to make the social welfare system more receptive to enabling education (relaxation of the Back to Education Allowance qualification criteria) and to make the education system more flexible to accommodate return adult learners (a modularised Leaving Certificate would enable flexible return to education). Danish flexicurity policy prioritised free pre-school childcare as a central long term strategy to achieve greater equality in educational outcomes. Investment in early childhood education should be enhanced as an objective in its own right and because it could create thousands of jobs. It is noted that policy has recently moved in this direction.
Income security/income adequacy
The rationale behind flexicurity is that people cannot take risks about work transitions without a base line guaranteed security. The third principle of the Danish style ‘enabling welfare state’ is therefore high social welfare payments and comprehensive quality public services. There is a significant gap between Irish social welfare rates (typically 30 per cent net average household income) and Danish social welfare rates (typically 80 per cent of previous earnings). The ‘minimum threshold of income adequacy’ (NESC, 2005: 219) offered in Irish payments does not enable workers make transitions between employments with any sense of security. The maximum 2010 adult job seeker payments (benefit and assistance) is €196 per week. This is below 60 per cent average disposable income relative poverty threshold (estimated to be €225 per week in 2010). The absence of an even adequate social welfare payment is a significant weak link in an Irish pathway to flexicurity.
In the immediate fiscal climate it is unrealistic to call for meaningful increases in social welfare, however in the longer term, the logic of security requires a considerable shift in the Irish mind set about social welfare. A more generous approach to social welfare is required in any sustainable economic and social model. In the shorter term, a ‘participation payment’ could compensate the real costs of participation in education and training. People’s security could be strengthened through guaranteed access to and provision of basic health, housing and public services through, for example, a medical card or guaranteed access to GPs for children and a moratorium on house repossessions. Rather than spending half of state pension expenditure on tax reliefs for supporting middle to high income earner’s investment in private pensions, the state would be better to use these resources for a comprehensive and adequate universal type state pension that could deliver pensioner security for all.
Applying the principles of ‘active inclusion for all’ ToC
A flexicurity model would need to be modified for Irish conditions but it could also be enhanced by applying the broader social inclusion principles of Active Inclusion for All. In particular Active Inclusion for All stresses a less punitive approach to conditionality and a more gender sensitive approach to activation. These types of principles could enhance an Irish jobs strategy and are explored in the paragraphs below.
Mandatory or compulsory participation in active labour market programmes is a central principle of ‘flexicurity’ and Nordic social policy (Torfing, 1999). The Irish social welfare code already requires those on job seeker’s payments to seek and accept labour market offers and so requires little adjustment to adopt this principle. This conditional obligation is an understandable feature of a Danish flexicurity package programme that offers social welfare rates of 80 per cent of previous income. However given the moderate nature of Irish social welfare rates it is less logical to argue for conditionality to be a strong principle of an Irish flexicurity model. There is already significant concern about the quality and relevance of some FÁS training; making training more conditional means providers may be less incentivised to provide quality relevant training. Historically Irish people have never refused reasonable offers of training and job opportunities, indeed quality Irish training opportunities are already over subscribed. The key modification or difference between Irish and Danish flexicurity relates to the level of social welfare generosity. The less generous nature of the Irish model indicates a proportionally less need for conditionality, or conversely, more generosity could be set against greater conditionality. The Active Inclusion principles of the EU might help modify an Irish model of flexicurity as it is applied to conditionality. The principles underpinning active inclusion stress supportive springboard rather than punitive approaches to activation. Such principles could protect against a disproportionate or overly conditional approach to flexicurity and activation and maintain a ‘demand led education and training strategy recommended by Forfás (2010).
Recent proposals introduce mandatory work requirements for some recipients of one parent family payments whose youngest child is 13 or more (One Family, 2010; Department of Social and Family Affairs, 2006). The focus on Active Inclusion for All raises the question of why only some lone parents and not all social assistance dependant parents are included in the Minister’s plan to make activation mandatory when the youngest child is 13 years old. Specifically spouses or qualified adults in families in receipt of job seekers allowance and widows or widowers on one parent family payments are not included in the 2010 activation plans. There is concern that the focus of activation on unmarried one parent families may add to rhetoric of deserving and undeserving poor, and shift blame for the problem of unemployment from the political system to unemployed people. The logic informing this policy direction is worrying. Taking the governments own logic at face value, such women are being excluded from activation measures even in the context where the government believe a job is the best route out of poverty. Omitting them from a supportive activation framework is surely disadvantaging their labour market re-entry and possibly committing them to pensioner poverty. Irish maternal employment is still low. Fifty four per cent of those mothers aged 25-54 who have children aged 0-6 do not work (CSO, 2009), and this trend is remarkably reinforced for those with low education – work only pays for mothers with children if they are educated enough to earn enough to pay for childcare. Mandatory work requirements will do nothing to make childcare affordable, tackle educational disadvantage and tackle low pay. Efforts to reform these structural barriers to employment would need to be key elements of any positive gender sensitive activation strategy and such opportunities should be open to all low income women with children.
Activation policy needs to engage with the reality that the labour market is still highly gendered. Debate about labour market responses to the crisis needs to reflect the gendered reality of the impact of the recession. The difference in the types of jobs that women and men have shapes the impact of the recession and should shape our policy responses; different policy responses will benefit or disadvantage different groups.
The recession is a threat to gender equality. Smith (2009) argues that women’s different relationship to the labour market means falling employment rates for women are not necessarily accompanied by similar rises in unemployment rates; there may be pressure or barriers for women attempting to sign on the Live Register or claimant count. Workers in or having had atypical jobs are also more likely to be excluded from unemployment benefit systems since they may have broken employment histories or may not have made sufficient contributions – this has longer term pension implications but short term benefit implications. An analysis that focuses on the Live Register as the political manifestation of unemployment will inevitably focus more on male and young male unemployment – this has worrying implications for the equality agenda. The second threat is more ideological in nature. Smith (ibid.) observes that in previous recessions (USA in the 1930s, Finland in the 1990s), policy responses did row back progress in relation to women’s participation in the labour market. It is obvious that the agenda of cutting community development infrastructure, decreasing welfare rates and the minimum wage was a pre-recession political agenda. Recession is an ideal smokescreen for ideologues to pursue an agenda that hijacks and downgrades equality issues in the national policy agenda to ‘a luxury we cannot afford’. On the other hand, Smith (ibid.) observes more hopefully that recession offers opportunities to achieve European goals of high employment and equality. There are opportunities to creatively argue that increasing women’s employment and economic participation is a perquisite of economic recovery. Advancing gender equality can be seen as a strategy like other investment strategies in a smart economy or in green technologies that seek to modernise the physical infrastructure. Conversely arguing for stimulus spending for investment in public services like health, transport education and housing or more general investment in services and infrastructure is also an investment for gender equality.
Earlier it was identified that a fault line of the DWS was a lack of gender sensitivity in the life cycle approach. Activation policies have a number of implications from a gender perspective; these can be seen across the life cycle and are especially relevant at the parenting stage of the life cycle. A gender sensitive approach to the life cycle would do much to strengthen the gender blind nature of the life cycle approach in NESC’s DWS. Gender disparities in exposure to poverty show higher rates for women than men and do so across a life cycle perspective, with women's greater likelihood for slower, shorter and/or interrupted careers and on average lower earnings than men translating into pensioner poverty. This means there are strong anti- poverty arguments for making sure women have equal access to quality and relevant activation programmes. Given the care related barriers to women’s employment a focus on adequacy of minimum income is important from a gender perspective where women are absent, for care related reasons, from the paid labour market. Women also depend more than men on access to quality services (including child care, long term care and health services). This focus on services in Active Inclusion is particularly important for the social and labour market participation of women who still have in many Member States the main responsibility for caring for the most vulnerable members of the household (children, elderly, sick and disabled).
None of these policy options discussed above are optional extras; all are required to work in an integrated fashion to make flexicurity and active inclusion work and to make it work for all. A gender sensitive full model of flexicurity does offer a framework or pathway out of unemployment. Key principles include a more flexible and creative social welfare system to protect, share and create jobs, quality short term training and long term educational opportunities, and a policy to protect and enhance social welfare adequacy and public services. This requires tax reform – widening and expanding the tax base, a new approach to care and a whole new gender regime, a new approach to solidarity with fewer contingencies and more comprehensive payment structures, and a realignment of the state’s role in the provision of services, more universal rights alongside more variety in delivery. The crisis offers the opportunity for a new model of development in a different global political economy where utilising Garrett’s ‘compensation thesis’ which Hardiman et al. (2008) explain requires an appreciation of the role of welfare not as residual but as part of political economy and a flexible adaptable labour market. A strong political and policy process is required to solve this unemployment crisis and flexicurity offers political and policy leaders a joined up framework for policy. For political leaders to fulfil their political obligations to the unemployed there needs to be a focused ministerial responsibility for developing a vision of inclusive labour markets for all.
One of the more curious features of Irish policy reform is the slow nature of institutional change in Irish public sector (NESC, 2005; OECD, 2008; Murphy, 2008a). For two decades prior to the recession there was significant awareness of and demand for public sector reform. A DWS would necessitate a significant change in how public services are planned and delivered, and this is particularly true in the area of social welfare, employment services, training and education. Forfás (2010: 37) seek ‘greater collaboration between education and training providers and employers to provide relevant ‘progression pathways’ for different groups’. Public scandals about FÁS corporate governance (in a context where FÁS are accountable for more than €1 billion of public expenditure), also provide ample political space for reform. In March 2010 a Cabinet reshuffle was used as an opportunity to restructure FÁS by moving job placement functions to the newly named Department of Social Protection (formerly Department of Social and Family Affairs). At the same time some FÁS training functions were moved to a renamed Department of Education and Skills. The policy function for social inclusion and equality was moved to a third department, the Department of Community, Equality and Gaeltacht Affairs. It is not clear at the time of writing what the implications of these shifts are for a more active social policy. Implied in the restructuring is a closer relationship in the new Department of Social Protection between income supports and employment supports. However because this department has now no clear policy function it is hard to tell which model of activation is informing this institutional shift. It is not yet possible to determine how the changes will impact on the day to day work of FÁS or even which Minister will be responsible for the different aspects of its work. Recession means more not less need for an active social policy implied in the concept of a DWS. It is clear a policy vacuum remains and that there is a deficit of public policy debate about this important area. A special Joint Oireachtas Committee on Employment with invited external experts could be established. Michael D. Higgins T.D. (2009) called for more ‘talk about the society we wish to create’. Mary Robinson (2009) in Cork echoed his demand for a vision of ‘where we wish to be at the end of all this’ and argued such a vision was too important to leave to economists. It is time for more voices to be heard in the debate about Ireland’s future.
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