The number of permanent employment contracts in the Netherlands, but also in the rest of Western Europe, is declining. There are more and more self-employed people, temporary contracts and on-call contracts. As a result, Western European industrial relations are starting to resemble what is customary in the rest of the world. “The permanent employment contracts and all the benefits that come with it were something of the twentieth century.”
The correct term for what is currently going on in the Dutch and Western European labor markets has not yet been fully invented. This is evident at the mini-symposium 'Working without security', organized on 14 January by the International Institute of Social History and the KNAW. However, historical sociologist Abram de Swaan (Uva), historical sociologist Jan Breman (Uva) and historian Marcel van der Linden of the IISH agree that a historical change is taking place in the Dutch and Western European labor markets.
The labor market 'informalises', 'precarises' or 'insures'. In almost all sectors, permanent employment contracts are disappearing – including the security of continued payment in the event of illness and accrual of a pension – and new employees are being recruited who often have no idea of these old privileges. They are often self-employed, self-employed without staff. 'Entrepreneurs', in other words, who are often hired by their former employer to do exactly the same work, but at much worse working conditions. Their employer no longer provides disability insurance or a pension, they have to arrange that themselves. When the assignment for which they have been hired is completed, they can just be on the street again.
“A dangerous global development,” Abram de Swaan calls it. The loss of certainties leads, certainly in the traditionally weaker economies of Southern Europe, to an aversion to minorities and a huge youth unemployment. “A 'lost generation' easily seduced into extremist activism,” he says, pointing to the success of the neo-Nazi Golden Dawn party in Greece. “Unequal opportunities have arisen for labor and capital. Capital flashes across the world and settles where the return is highest. There will be jobs there for a while, but no one will get security. As soon as the return is higher elsewhere, the work disappears just as quickly.”
From colleagues to competitors
“In Asia in particular, population migration is underway that has no historical precedent,” says Jan Breman, who has been a sociologist for decades conducting research in countries such as India and China. "In the hope of employment opportunities in new factories, residents of the overcrowded countryside moved to the cities.
The informal economy, made up of workers who offered casual services on the street, was initially a kind of waiting room; the factories with their stable employment would come naturally. But often enough they didn't come at all, making the waiting room permanent. Less than half of Asian migrants now work in factories. The rest are hopelessly stuck in the uncertain, informal economy."
It is of course not that bad in Western Europe. But in the growing army of freelancers, who often work in a kind of formalized uncertainty, there are certainly parallels. Breman:“The informal economy was already there in Asia, but it is now reaching the west. Informalization drives employees apart. Employees who used to be colleagues now become competitors for the same assignment. It seems to be a return of the social question (see box) of the nineteenth and early twentieth centuries and trade unions are powerless.”
“Insecure workers in Italy invented a new saint in 2004:San Precario (precarious =insecure), the patron saint of all unprotected workers,” Professor of the History of Social Movements Marcel van der Linden begins his talk. San Precario is a symbol of the increasing uncertainty in European labor markets. “Flexible labor has been around for centuries, although in ancient Greece loose, unattached workers who did not belong anywhere had a lower status than house slaves,” says Van der Linden. “The standard job, a job for life, including all social security, did not come until after the Second World War. It arose at the same time as the norm of the male breadwinner. Casual work became something for women who occasionally wanted to do things outside the home.”
Historical exception
Was the expanded Western European social system after the Second World War a short-lived historical exception, from which only one generation - that of the 'baby boomers' - could fully benefit? “The permanent employment contract and all the benefits that go with it were indeed something of the twentieth century,” explains Van der Linden by telephone. “As early as the 1960s, the economist Ernst Mandel predicted that building a system with permanent contracts for everyone could not go on for long. The breakdown would start at the first crisis, because it is diametrically opposed to the importance of cheap labour. And indeed, it now turns out to be a historical phenomenon that lasted very briefly in only a small part of the world.”
“After the Second World War, you see two things emerge:the build-up of social security and the ideal of the male breadwinner, who could support his family with one salary,” Van der Linden continues. “But no clear explanation has yet been found for the question of why this arose precisely at that time and why in Europe in particular. Large companies had an interest in retaining important employees with specific knowledge, by means of a permanent contract and a pension fund. That happened before the war. But why the permanent contract for everyone became the norm is not yet entirely clear.”
The disappearance of permanent contracts and the informalization of the economy has already started in the early 1990s. “It all started with the collapse of the Soviet Union in 1991,” says Van der Linden. “Western social security was also a counterweight to communism; "You don't need communism at all to be able to offer security to every worker," they tried to say. In the 1990s, that argument was no longer valid. And the current economic crisis has only accelerated the breakdown.”
The permanent employment contract as the norm has become part of history and will not return, Van der Linden thinks. Informalization has weakened trade unions and collective bargaining has become an outdated form of advocacy that is of no use to employees without a permanent contract. For now, Western Europe is going back to what – apart from that special twentieth century – has always been the norm; cheap, flexible labor without too many certainties.