Causes, Consequences and Remedies
Ive Marx and Lien Van Cant
Belgium’s social concertation model is extraordinarily resilient. Social dialogue is institutionally firmly embedded and the social partners continue to wield significant influence in shaping social and economic policy. Belgium is also among the few rich countries not to have seen growing income inequalities. Belgium maintains just about the most equal wage distribution in the capitalist world – including one of the smallest gender pay gaps – and there is little evidence of precarisation of work. The key argument of this chapter is that robust social dialogue has helped to contain inequality. The Belgian experience thus provides a powerful antidote to views that growing inequalities are inevitable. However, Belgium’s labour market is not as inclusive as we would wish and this, too, has to be seen, at least in part, in the context of the institutional rigidities and insider biases inherent in an extensive social concertation model such as Belgium’s.
Once considered an exception among the post-socialist countries owing to its inclusive industrial relations system and the role of social dialogue, the conditions for the social compromise in Slovenia have eroded significantly since mid-2000s. The pressures intensified in the post-2008 period when social dialogue at the national level virtually collapsed, the gap in working conditions and wages between sectors of the economy widened, while precarisation and increased unemployment seriously undermined the position of trade unions at the company level. In cases when collective bargaining was not mere ‘concession bargaining’ it often resulted in reduction of various forms of inequality but, with regard to weaker unions and non-unionised segments of the labour force, union actions at the national level proved crucial for imposing certain minimum standards. On the rare occurrences when meaningful social dialogue at the national level did take place, the results were more pronounced on the flexibility rather than the security side.
Daniel Vaughan-Whitehead and Rosalia Vazquez-Alvarez
This first chapter, as an introduction to the whole book, summarises how growing inequality in Europe may have emerged from mechanisms in the world of work, with a particular focus on the possible role of social dialogue and the social partners – and more generally industrial relations – in reducing inequalities. The chapter first presents some major lessons from the national chapters and summarises their contributions to the existing research: How did national industrial relations systems address inequalities over time, and what have been their effects on various sources of inequality? This introduction also reviews some concrete outcomes of collective bargaining at national, sectoral and firm level that may have helped to reduce inequalities. It extends for this purpose the number of countries (beyond those covered by national chapters) in order to provide the most extensive overview of such outcomes. Third, this introduction complements the national stories with a comparative statistical analysis from the European Structure of Earnings Survey (SES, Eurostat) to more accurately identify specific effects of collective pay agreements on pay inequality, working time distribution and work contracts. Finally, this leads us to a number of policy considerations, which are presented briefly in the closing section and further developed in the national chapters.
Edited by Daniel Vaughan-Whitehead
Rafael Muñoz de Bustillo and Fernando Pinto Hernández
This chapter reviews the role played by the system of industrial relations in the working of the Spanish labour market, focusing on the level of security and flexibility achieved and its impact on inequality. With that aim, we first review the main characteristics of the Spanish system of industrial relations before the Great Recession, including the role played by social agreements and social consultation, and the major changes produced during the economic crisis, both in terms of labour (de)regulation and in terms of the changing power relations between workers and firms resulting from the massive increase in unemployment. With this background, we explore the impact of the system of industrial relations on the functioning of the labour market in terms of jobs security and income inequality using, among other sources, the 2014 wave of the Structure of Earnings Survey. This chapter will provide two successful equality-enhancing case studies of social dialogue.
Maria Karamessini and Stefanos Giakoumatos
The Greek Great Depression (2008 to date) has had profound consequences on labour market inequalities by producing mass unemployment of historical dimensions and radical changes in industrial relations. By investigating only the effect of the latter on inequalities among employees, the chapter has found that the dismantling of collective bargaining and ‘imposed flexibility’ have reduced traditional differences in employment and working conditions between large and small firms, formal and informal sectors and reinforced those between young and older workers. As regards the public–private divide, inequalities in employment security and working conditions have been amplified, while wage inequalities have narrowed given the huge cuts imposed on public sector wages in 2010–11. Wage devaluation in the private sector since 2012 has reversed the trend but has failed to contribute to the creation of a sustainable growth pattern which requires a multi-level social dialogue framework to promote productivity and investment in quality production.
Damian Grimshaw and Mat Johnson
The world of work in the United Kingdom has for many years been characterised by major inequalities. Despite hosting some of the world’s highest executive salaries, basic employment and welfare standards tend to be relatively low. Moreover, a series of qualitative shifts in the labour market, in worker protections and in the nature of work have tended both to reproduce and to feed off workers’ unequal socio-economic position. A key causal factor is the ‘perforated’ industrial relations model caused by two generations of trade union decline. This has facilitated a specific mode of labour market flexibility, which is strongly biased towards employer short-term interests and militates against both longer-term employer security needs (for example, to underpin skill investment) and the kinds of flexibilities that might meet worker needs (for example, flexible careers and working time). This chapter investigates the relationship between inequalities and industrial relations and explores positive and negative outcomes via two case studies.