Friday, 15 January 2016

"Flexicurity" - The Future Of Work?

The Fictional Realm: Borgen's prime-ministerial heroine Birgitte Nyborg (Sidse Babett Knudsen) is consoled by her Machiavellian spin-doctor Kasper Juul (Pilou Asbaek) in the award-winning drama series from Danish public television. Until very recently one of the world's most progressive states (its current immigration reforms are insupportable!) Denmark is able to run active labour market policies such as "flexicurity" only because the Danish working-class still enjoys effective representation in the country's political system. Would it were so in New Zealand!
 
IF ONLY New Zealand’s politics could be like those of Borgen – the Danish television series. Centred around the actions of a fictional Danish prime minister, Borgen’s politics are realistically riveting. More than this, however, they are rational. Denmark is portrayed as a nation with a conscience: the host of better angels to which, in extremis, Borgen’s heroine (yes, the prime minister is a woman) can successfully appeal. In the fictional realm, at least, the Danes remain the sort of people New Zealanders once believed themselves to be: decent, practical and courageous.
 
In population terms, Denmark and New Zealand are not that far apart: 5.6 million to 4.6 million. They are also similar in possessing large and efficient primary production sectors. Like New Zealand, Denmark’s political history has been strongly influenced by social democracy, with both countries boasting large and historically competitive Labour parties.
 
It is, therefore, unsurprising that left-wing intellectuals and Labour politicians from New Zealand have, from time to time, turned to Denmark for inspiration. In the late-1950s the left-wing political economist and public servant, William B. Sutch, urged Walter Nash’s Second Labour Government (1957-60) to follow the example of the small, highly-productive nations of northern and western Europe by radically increasing the range and complexity of New Zealand’s exports.
 
Excluding the political anomaly of the Rogernomics years (1984-1990), Sutch’s blueprint, albeit much updated and amended, has remained at the core of Labour’s economic thinking ever since.
 
Equally consistent has been the party’s predilection for adapting Scandinavian solutions to New Zealand’s social problems. Until the mass unemployment created by Roger Douglas’s free-market policies rendered the whole subject moot, the David Lange-led Labour Government borrowed heavily from the so-called “active labour market” regimes of the Scandinavian countries – especially Sweden and Denmark. Under the rubric of Grant Robertson’s “Future of Work Commission”, Labour is about to look northward again.
 
The Holy Grail? Grant Robertson's Future Of Work Commission looks set to make "flexicurity" an important part of Labour's 2017 manifesto.
 
Robertson’s buzzword-de-jour is “flexicurity”. As the name of this highly successful Danish policy suggests, the dual objective is to facilitate the maximum degree of labour market flexibility while providing the maximum level of employment security. Employers are offered considerable freedom to hire and fire, but, in return, employees are generously supported through periods of unemployment, and assisted with re-training and re-entering the labour market, by the state.
 
According to the official website of the Danish Government: “Danes are positive about globalisation and do not fear losing their jobs. Rather they seek opportunities for new and better jobs. This is partly ascribed to the flexicurity model which promotes adaptability of employees and enterprises.”
 
Small wonder that Labour’s Future of Work website links directly to this quintessentially Danish solution. In a New Zealand labour market increasingly composed of “independent” contractors, people holding down multiple jobs, part-timers, interns, and the plethora of similarly “precarious” employment relationships, the Danes’ flexicurity policies must have appeared to Grant Robertson in much the same way as the Holy Grail appeared to King Arthur.
 
Unfortunately, Robertson and his advisors failed to read the small print. New Zealand and Denmark have many similarities, but in 2016 they also feature a number of vital differences. In relation to flexicurity, the most important of these is the respective level of union density.
 
As the official Danish website puts it: “The development of the labour market owes much to the Danish collective bargaining model, which has ensured extensive worker protection while taking changing production and market conditions into account. The organisation rate for workers in Denmark is approx. 75%.”
 
The organisation rate for New Zealand workers in 2014 was approx. 19%.
 
It is typical of the contemporary New Zealand Labour Party that it has simply ignored the profound contextual differences between the workers of New Zealand and Denmark. With three-quarters of the workforce organised, the Danish Confederation of Trade Unions is a force in the land. With fewer than one in five New Zealand workers organised, the NZ Council of Trade Unions is in no position to prevent flexicurity turning into a government-backed scheme for employers to hire and fire at will. Presumably, the lone trade unionist on Robertson’s “External Reference Group” pointed this out. Presumably, Robertson wasn’t listening.
 
Borgen’s politics are rational because the balance of social forces in Denmark obliges its politicians to behave reasonably. Labour’s policies of 30 years ago predetermined the future of work in New Zealand: flexibility without security.
 
This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 15 January 2016.

26 comments:

peter petterson said...

Once in government Labour has to legislate an asap employment relations - (we used to call it industrial relations) - reform. Move back to pre-Employment Contracts Act days. the only thing they won't be able to do is to return to compulsory unionism. Collective bargaining and democratic employment relations is a must!

Brendon Harre said...

The Danish economic model is discussed in this article about Christchurch published just before Christmas.

https://makingchristchurch.com/is-christchurch-a-big-farm-supply-town-or-a-diversified-urban-economy-493a489c708e#.8i1zkzchd which was updated and republished in the New Year at transportblog
http://transportblog.co.nz/2016/01/05/guest-post-is-christchurch-a-provincial-market-town-or-a-diversified-commercial-city/

The villain in the article -Gill Cox was appointed to his dominant position by Steven Joyce in 2011.

The question for the voter is does it continue with National even though it is throwing urbanites (residents and businesses) to the wolves -unprotected and unloved? Despite urbanites being the majority of the economy and population. As a second option does Key and co modernise National's ruralism thinking? Or does the third option come to fruition -Labour returns to its reforming progressive role in New Zealand's society?

Anonymous said...

At the 2015 Labour Party conference, Robertson waxed about "shared prosperity' now that has morphed into "future of work" with a commission set up.

He is off to an international conference to learn all about it.

We shall have to wait and see of course.

I want to be enthused, I want to be positive, I want to be able to talk to my family and mates about it, encourage them, but

I feel sceptical, wary, cheated and tired.

Guerilla Surgeon said...

It will be nice to know exactly why Denmark has such a high take-up of union membership. I mean is it compulsory? Or are they just sensible. Because wherever a neoliberal government gains power one of the first priorities is to bugger the unions. There is a court case going on in the US at the moment that is going to potentially wipe out the teachers union. And wherever you have low union membership, you have low wages. You've only got to look at the difference between New Zealand and Australia, though Australia's membership has plummeted over the last couple of years. Want to bet that wages follow?

greywarbler said...

Denmark always sounded an interesting country to study and seemed to be successful with standards as we would like to emulate (though has taken fright at the foreigner threat on its borders). It sounds as if it has handled its economy far better than our little semi-colonial country.
Here we send commissioners in to oversee unsuccessful entities. Perhaps Denmark would lend us a panel of thoughtful, coolly intelligent northern managers to bring some Danish nous to our beleagured land.

Anonymous said...

peter petterson: 11:18

Re 'Once in government etc', when Andrew little stood for the leaders job he stated quite clearly' at all the delegate meetings" that when he was PM the 90 day employment bill would be rescinded, he has since then stated that it might not be rescinded but replaced with something that would promote fairness????.

Nice to see someone posting for Labour, but if Andrew Little becomes our PM I would not hold my breath waiting for Labour to do anything about industrial relations, it could be fatal.

Jigsaw said...

As usual the left focus on the similarities with various Scandinavian countries - in this case Denmark and do not take into account the distinct and considerable differences. One of those major differences is our indigenous population and the pacific immigrants since WW2. The other major difference are the close neighbours to Denmark and a long and different history.
I find that most people I meet and talk to-younger people especially have little time or regard for trade unions and my son in Australia regards the trade unions there as a huge impediment to prosperity. People in the trade unions being concerned with their own status and little interested in the country's progress.

greywarbler said...

Jigsaw
You failed in your task to pass on your wisdom and knowledge to your son in Australia before he left. There are reasons for trade unions, and young people can't rely on being in the right spot when the good jobs are going and being fairly treated by business or if in business oneself, by banks and creditors. Your attitude is very dismissive of history and social systems, and all you give us your prejudices not any useful insight.

Jack Scrivano said...

Until maybe ten years ago, the Scandinavian countries had populations that were predominantly Scandinavian. The majority ruled. That has changed a bit recently. It will be interesting to see how they cope.

If NZ was a predominantly Maori culture, it would be a different country. I’m not saying that it would be a better country; but it would be different. However, the reality is that Maori are fast becoming one of the minority minority groups. People of European and Asian heritage are the majority in this country.

Things to think about, boys and girls.

Guerilla Surgeon said...

Jigsaw. Funnily enough, most of the young people I talk to are in favour of unions, and so is my son. What a surprise – our kids tend to take after us.
An impediment to prosperity? Well, who's prosperity? Not the average working person's prosperity, because the higher the union membership the higher the wages. That's pretty much a given in a developed society.
I'd also quite like an explanation of the major difference of our indigenous population and Pacific immigrants? In what way does that make us different? Sounds like dog whistle racism to me, but feel free to correct me.

Anonymous said...

As we get closer to the end of the capitalist epoch the Labour Party is bereft of ideas. They offer nothing more than the extension of the domination of capital over labour.

Anonymous said...

GS:

You are right about union membership, most Maori and Pacific Islanders join unions with their jobs.

Jigsaw made a racist comment, ignoring the facts.

Jigsaw also made anti-union statements without cause or truthfulness.

Loz said...

European Economist Ronald Janssen wrote a fascinating article in 2013 titled "Flexicurity: The Model That Never Was". In it, he highlighted that the concept of "Flexicurity", when first revealed by the OECD in 2004, suggested that Denmark had low structural employment protection but also achieved high job security and a generous welfare system. Considering more than 70% of employees in Denmark are unionised, the suggestion of relatively low employment protection is itself curious.

In 2013, the OECD updated its Employment Outlook database to provide more comprehensive data to assess the level of employment protection that existed amongst member states. Apart from New Zealand being listed as the country with the lowest level of employment protection within the OECD, the problem for Flexicurity is that upon review, Denmark has never actually had a low level of employment protection at all. He states in relation to the updated data that:

...in contrast to the estimates from the earlier database, Danish workers in 2004 were benefiting from a level of job protection that is twice as high as in the UK and is not far removed from the job protection levels of France and Germany,

Instead of "Flexicurity" being a bizarre form of prosperity coming from the removal of workers protection - it appears that the Denmark's statistics actually show the opposite is true. High job security and a generous welfare system actually accompany a high level of employment protection. Who would have thought such a thing?

Bushbaptist said...

Oh Jigsaw you just can't help yourself! Jiggy you need to get out more!

Some-one else where here remarked that there is no "Free Market" (I think it was GS) and that is quite right. All economies are regulated, it is a case of whom benefits from those regulations. In the period from WW II to 1984 (strong Unions) we had the largest and most successful middle class in NZ history. The regulations then advantaged the low income earners.

After 1984 it changed and the regulations benefited the wealthy at the expense of the ordinary workers. At the same time Unions were destroyed so now we have the smallest middle class, who are struggling to make ends meet, whilst the wealthy cruise around Monaco! The whole purpose of the Unions was to make sure that at least some of the profits generated by workers, went to the workers not the bank accounts of the wealthy. That way the economy improved, more jobs and better pay.

Since 1984 we now have a single main political party with two branches, one slightly more "Compassionate" than the other. Because the Unions were demolished, that stopped the Union funding for the Labour Party, who must now go to the same sources that the Gnats get theirs from. So the Labour party (whose sole reason for being was to support the low income workers) have become Gnatlite.

Guerilla Surgeon said...

Further to what Loz was saying, there is apparently now some suggestion that job security encourages innovation in Scandinavia. I'll try to find the link.

Tiger Mountain said...

with Labours unwarranted capitulations over TPPA and 90 day “Fire at Will” and capital gains, they are on a hiding to nothing for 2017 unless Mr Robertson is going to propose something truly radical by modern neo liberal orthodox standards

e.g. if he instituted a UBI through the tax system and disestablished WINZ entirely, made tertiary education of all kinds free, returned right to strike and no freeloading on union members CEAs, and introduced rent control, people might just start to listen

pat said...

This posted on The Standard yesterday.....pust everything into perspective by the most concise demonstration ever (Id kill to have his ability to clearly express a concept) of all of our problems be they jobs, climate change, inequality....whatever you care to name.....it will be the best spent hour of any thinking persons life.

https://www.youtube.com/watch?v=F-QA2rkpBSY&list=PL6A1FD147A45EF50D

jh said...

Job market skewed in favour of employers, Trade Me says
"Applicants for hospitality and tourism, customer service, and office administration jobs in particular would find it more difficult to secure a role owing to increased competition, with "as many as 100 or 200 [applications] per listing".

http://i.stuff.co.nz/business/75953876/job-market-skewed-in-favour-of-employers-trade-me-says

On Radio NZ 6 o'clock news A2 Union said the jobs were going to Indians and Chinese.
What will loaves and fishes left-wing intellectuals do about that?

Bushbaptist said...

As an aside, I found this interesting:

http://www.independent.co.uk/news/uk/politics/britain-could-be-more-left-wing-than-people-assume-study-finds-a6813801.html

David Stone said...

Hi Chris
If government policy provides no security to industry, and even creates a tax environment that favours overseas companies as pointed out by Mr Fletcher as he retired from the reserve bank board, then industry can provide no security to its employees .
We are the world's most open economy , forget job security.
Cheers David J S

jh said...

On Radio NZ 6 o'clock news A2 Union said the jobs were going to Indians and Chinese.
.......
That must have been Etu Union, and I didn't dream it. Maybe slipped through but the media are so self inbred that they cannot tell the children ?
No wonder journalists rate down there with real estate agents.

Tiger Mountain said...

what a roll call of fatalists and wishful tory triumphalists above, there are only two scenarios in the medium term–a barbaric futurist world where everything remaining is scrapped over tooth and claw as per “Mad Max”, or some form of socialism to end the grotesque reign of neo liberal corporate capitalism

fiddling in the margins won’t be sufficient

Charles E said...

The Danish model you describe Chris sounds good. Only two or three issues:
Denmark is populated by Danes, a mature people who have an old, sophisticated civilisation;
They have significant oil income;
They have about 500m people close by to trade with;

It's sort of like the case with MMP, a German system. Good idea, except we are not Germans, so it does not work so well with Kiwis eh. If we were German there could be a grand coalition between National & Labour, deploying the sensible policies from both, for the long term, and leaving the extremist out. No chance of that here so MMP does not serve us well.
So it's the people a policy applies to that counts and unfortunately we are an immature lot, although we probably have more fun than the Danes, who currently are pretty unhappy with the Muslim invasion of Europe as it happens. Probably worried about their jobs, like jh.

greywarbler said...

Chris since Christmas it seems very hard to get the current page up. It took one minute this afternoon and at the base of the page it said something about oauth google. I haven't made any changes at this end, except I have not updated my browser to its latest version. I thought I'd let you know.
It seems as if there is a timer, as when I tried to get in from the latest title listing in the left column, it brought up the current page, but almost immediately it reverted to the deep brown shade over the whole page.

Guerilla Surgeon said...

"old, sophisticated civilisation;"
Oh come on. Seems like everyone has one of these except for us eh Charles? What nonsense. This civilisation is no older than ours which is essentially British. Of course, it depends on how you judge maturity. The Danish suicide rate is very close to ours for instance. Doesn't say much for this civilisation I suspect.
And if you going to make these airy pronouncements about MMP not serving as well perhaps you could provide some evidence? I think it serves us very well indeed.

jh said...

Unfortunately, Robertson and his advisors failed to read the small print. New Zealand and Denmark have many similarities, but in 2016 they also feature a number of vital differences. In relation to flexicurity, the most important of these is the respective level of union density.
'''''
Michael Reddell has been pointing out the place of geography: draw a circle x miles out from NZ all you get is seagulls; if you drew the same circle around Denmark you would get a very large population.
I agree with flexicurity but wages will only go up if migrants are kept out and house prices will stay down if buyers are restricted to New Zealanders.