The politics and policies of labour market adjustment in post-1989 Poland Catherine Spieser Seminar ‘East meets West’ London, 6 November 2009

6 November 2009 Introduction Labour market adjustment in CEECs –reshuffling and redistributive process (jobs, income, risk) –constructed by policies (regulatory framework and welfare state) –politically mediated: the scope of public policies is a matter of debate and contention  how a shift of paradigm (market economy, neoliberalism, flexibility) is negotiated in its practical implementation Theories of the welfare state as a risk-pooling arrangement –Identifying welfare regime –Explaining reforms (retrenchment, recalibration, paradigm shift) Case studies: policies addressing unemployment; employment regulation in Poland Process-tracing methodology: Tracing policy trajectories (labour code and unemployment insurance) and mapping the politics of LM adjustment 2Catherine Spieser

6 November 2009 Welfare state theories go East Welfare state lit and the CEECs: a few issues A conceptual map –to identify a shift of welfare regime –to map the politics of regime change Identifying the underlying sociopolitical ‘compromise’ Explaining the conditions of emergence of residual/minimalist welfare states Shift to residual policies takes place when there is a shift or breakdown in coalition among risk communities (Baldwin 1990) … but not when policies are supported by identifiable categories of beneficiaries who gained rights and entitlements in return for contribution, unless they are compensated 3Catherine Spieser

6 November 2009 Setting the stage actors & institutions Legacies and starting point: universalistic and contribution-based institutions, ‘state of entitlements’, distorted by artificial full employment, workforce administration, and limited consumption The actors of labour market reform in Poland have some specific features to be taken into account –Party-system without a salient left-right cleavage, social democratic party succeeding to former communist one, high govt turnover –Fragmented trade unions: NSZZ Solidarnosc and OPZZ –Relatively young employers federations (PKPP) –A top-down form of institutionalized neo-corporatism which does not function well but tends to close the decision-making arena to other collective actors –Institutional inheritance: universal employment, no U, 1974 Labour Code 4Catherine Spieser

6 November 2009 Employment regulation Mapping extent of protection and risk-pooling: –employment security (protection) and flexibility –integration and dependence of labour (respective scope of work-based versus employment based contracts) A ‘constituent moment’: the rebirth of a ‘labour market’ – : reinstitutionalizing a labour market –1974 Labour Code revived, minimal adaptation but no radical reform –Law on collective dismissals 28/12/89; Law on empl. and unemployment 29/12/89; Balcerowicz plan 31/12/89: executive projects without debate in Parl. –More than 1 M unemployed in 1990 alone Four successive waves of reforms: – : 1st, limited attempt to reform LC – : trade union pressure to protect standard employment – : reform and long-awaited deregulation – : alignment on EU framework legislation 5Catherine Spieser

6 November 2009 Employment regulation II : limited reform attempts –inadapted rules, rapid expansion of FT and civil contracts (dependent self-empl.) > Extraordinary parl committee for LC reform (94-96), expert committee drafting texts (91-96) –Law 2/2/96 eliminated outdated provisions, redefined employment as any subordinated paid work (initial proposal: regardless of contract) and introduced restrictions on successive FT contracts (only 2) –Union-friendly compromise of SLD coalition : deregulation defeated, employment protected –Rising unemployment, comprehensive labour law reform on the agenda, support of new govt (AWS) + employers demands –Employers and unions as proposal actors –Law on SME containing various general liberalizing measures, failed adoption –Repeated attempts to liberalise or bypass the LC, but continuous union opposition defeated them. But the terms of the debate have moved. 6Catherine Spieser

6 November 2009 Employment regulation III : long-awaited deregulation –Growth and employment agenda top priority of SLD-led govt, Hausner announces profound LC changes –Tripartite consultations revived, package of reform discussed in TC early 2002 but eventually rejected by Solidarnosc, adopted in Parl July 2002 –Redefinition of empl relation, more flexibility (FT contracts, coll dismissals, WT, cut overtime pay) –Special commission for LC codification : alignement on EU framework legislation –Law on dismissal procedure, laws refining certain aspects of LC, limitations on consecutive fixed-term contracts reintroduced. –Finally regulation of non-standard forms of work: law on temporary workers 9/12/03 –EC noted in last report Oct 2003: more needed on working time, part- time work, posting of workers. After May 2004: more politicized? 7Catherine Spieser

6 November 2009 Unemployment policy A ‘new’ risk, and a ‘new’ sector of public policy after 1989 Unemployment benefit, from introduction to marginalisation: –Introduced in 1989 with a very broad definition of unemployment (70% last wage or more depending on seniority), clearly not sustainable by state budget –From 1991 onwards, several restrictions introduced: limited duration, upper ceiling at level of national average wage, linked to local employment situation, stricter eligibility criteria –In 1996 & 2004, reform of benefit calculation rules –Formally an insurance system relying on mandatory contributions as % of salary, but flat-rate benefit set by Ministry independently from individual wage… –More support for ALMP, yet few resources until 2004 (also marginal)  failed to become a legitimate branch of the welfare state, lost insurance and universal character 8Catherine Spieser

6 November 2009 Unemployment policy II Particularistic schemes Exit through early retirement or disability as a widespread phenomenon –Retirement earlier than normal legal age (various exceptions maintained) –Pre-retirement benefit/allowance for those nearing end of career –Disability benefit (13% working age pop in 2002) Redundancy plans and collective mobilisation as an exception –Mining: workforce reduced by 3/4, generous severance payments reflecting bargaining power, often flowing into inactivity or informal sector, bypassing unemployment status –Steel industry: same proportion of dismissals, using retirement and disability benefits (until 1998) and later a severance + activation package 9Catherine Spieser

6 November 2009 Emerging welfare regime I Flexibility at the margin 10Catherine Spieser

6 November 2009 Emerging welfare regime II Flexibility po-polsku: without income security  A residual welfare state as far as LM policies are concerned 11Catherine Spieser

6 November 2009 Politics of labour market policies Social outcome: welfare segmentation  Institutionalising market society Politics of reform –The conditions of employment are negotiated in class terms (two-side conflict, peak associations, few but strong veto points) = redistributive politics –The conditions of unemployment are not a matter of mobilization, hence successive restrictive reforms (low politicization, little involvement of peak associations) –Exceptions: mobilization to obtain more favourable conditions in a few highly unionised, regionally concentrated sectors (coal and steel); early retirement  An illustration of how the insider-outsider divide reflects in the policy-making arena... 12Catherine Spieser