Full Employment in Europe
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Full Employment in Europe

Managing Labour Market Transitions and Risks

Günther Schmid

Transitional Labour Markets (TLM) – defined as legitimate, negotiated and politically supported sets of various employment options in critical events over the life course – are an essential ingredient of modern full employment strategies. After assessing the European Employment Strategy, this book offers a detailed comparative analysis of employment performance for selected European member states and the United States. It suggests that successful employment systems arise from a new paradigm of flexibility and security (‘flexicurity’) the balance of which varies according to countries’ institutional paths. Whilst there is no ‘best practice’, TLM theory does provide normative and analytical principles that can be generalised for various institutional settings. The book also provides good practice examples for managing critical transitions over the life course – from education to employment, from one job to another, from unemployment to employment, from private activities to gainful work and from employment to retirement – and develops the contours for extending unemployment insurance to work–life insurance.
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Chapter 8: Managing Risks through Transitional Labour Markets: Can Flexibility and Security be Married?

Günther Schmid


8. Managing risks through transitional labour markets: Can flexibility and security be married? There is no more paradox in this than there is in saying that motorcars are travelling faster than they otherwise would because they are provided with brakes. (Schumpeter 1976, p. 88) The argument developed in this final chapter can be summarised by reformulating Schumpeter’s famous paradox pertaining to intellectual property protection: ‘There is no more paradox in “flexicurity” than there is in saying that workers are more flexible and creative than they otherwise would be because they are provided with security’. This paradoxical marriage of flexibility and security has already been strongly promoted by the European Employment Taskforce, which published its report Jobs, Jobs, Jobs: Creating More Employment in Europe in November 2003 (Kok et al. 2004). The title of this report was contested, and in some countries even badly received, because to many people the term job connotes nonstandard low-quality employment. However, the report clearly regarded security as a prerequisite for the acceptance of flexibility, albeit in a new sense: 1. Job security in the sense of preserving a job for life is abandoned. Instead, the emphasis is on employability, decent pay and good working conditions. Individualised assistance in finding a job and transferable social rights to foster mobility become therefore a priority. People should be encouraged to take risks. Social-security institutions, especially pension systems, should therefore be conceived in a way that rewards rather than punishes people for accepting flexible jobs. Denmark and The Netherlands...

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