Introduction

1. The politics and policies of labour market adjustment in post-1989 PolandCatherine SpieserSeminar ‘East meets West’London, 6 November 2009

2. 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 Catherine Spieser

3. 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 policiestakes 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 Catherine Spieser

4. Setting the stageactors & 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 Catherine Spieser

5. 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’ • 1989-1990: 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: • 1995-1996: 1st, limited attempt to reform LC • 1997-2001: trade union pressure to protect standard employment • 2002-2003: reform and long-awaited deregulation • 2003-2005: alignment on EU framework legislation Catherine Spieser

6. Employment regulation II • 1995-1996: 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 • 1997-2001: 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. Catherine Spieser

7. Employment regulation III • 2001-2003: 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 • 2003-2005: 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? Catherine Spieser

8. 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 Catherine Spieser

9. Unemployment policy IIParticularistic 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: 1989-2003 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 Catherine Spieser

10. Emerging welfare regime I • Flexibility at the margin Catherine Spieser

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

12. 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... Catherine Spieser