During the past four decades, the comparative literature on welfare state development has been dominated by approaches that emphasize the implications of class conflict for welfare state outcomes. Most influential among these approaches has been the so-called power resources approach, which depicts welfare state development as mainly involving distributive conflict between workers and employers. As a result of their emphasis on class conflict, power resources scholars have displayed a strong tendency to view labor as a homogenous and disadvantaged group that needs to be compensated by the welfare state. In the view of power resources scholars, “the welfare state is a class issue. Logically and historically, its principal proponents and defenders are movements of the working class.”1
This emphasis on class relations, and the resulting tendency to view labor as a homogenous and disadvantaged group, has had important consequences for our view of the involvement of organized labor in welfare state development. These consequences have by no means been limited to the writings of power resources scholars. Scholars from other backgrounds and scholarship traditions have also given little attention to the very diverse and often conflicting natures of workers’ demands for security against labor market risks. The tendency to view labor unions as the natural supporters of welfare state development, for example, is common among power resources scholars, so-called institutionalists, employer-centered scholars, and those who emphasize the importance of other societal groups like the self-employed.2 And although power resources scholars place most emphasis on labor’s relative power resources, there is a strong consensus that the political efficacy of left parties depends on strong trade unionism.
In this book, I have challenged this view of the involvement of organized labor in welfare state development. I have done so by arguing that labor union support for redistributive welfare state development cannot be taken for granted. Depending on the risk and income profile of their members, I have argued, unions value public welfare solutions, and especially their redistributive consequences, in quite different ways. Rather than viewing welfare state development as a political victory of labor over
1
Shalev, “The Social Democratic Model and Beyond,” 320. 2
Earlier, I referred to Peter Baldwin’s omission of union structure as an explanation for the TUC’s failure to support superannuation in his The Politics of Social Solidarity, which emphasizes instead the role of the “middle classes.” His acceptance of the depiction of labor unions as supporters of welfare state development also comes to the fore in his statement that: “Until recently, it has been common to seek the social source of the most comprehensive and generous legislation in the ability of those groups and classes with most at stake to achieve their goals – a laborist approach to the welfare state.” Baldwin, The Politics of Social Solidarity, 7 and 9. And the institutionalist Theda Skocpol also accepts this view when she states: “The political class struggle between workers and capital…helps to explain why the United States has not developed a comprehensive full-employment welfare state along postwar Scandinavian lines.” Theda Skocpol, Social Policy in the United States: Future Possibilities in Historical Perspective (Princeton: Princeton University Press, 1995) 18. For her dismissal of the importance of craft unionism to this, see the reference to scholars who have emphasized the importance of craft unionism for welfare state outcomes in the United States in footnote 10, below.
188
capital, I have therefore emphasized the importance of the willingness of labor unions to redistribute income and risk within the labor category. It is for this reason that I have argued for the importance of the organizational blueprint of labor unions and have criticized the preoccupation of scholars with their organizational strength.
The starting point of my analysis has been that workers differ greatly in terms of income and exposure to labor market risks. The main purpose of the welfare state is to diminish these differences, so that all workers are adequately insured against labor market risks like unemployment, sickness, disability, and old age. In their ability to redistribute risks and resources between society’s more and less privileged members, public welfare solutions differ strongly from private ones. It is for this reason that unions representing only skilled, and thus privileged, workers often prefer private to public welfare solutions – or favor a combination of private and public insurances against labor market risks that involves no redistribution between more and less privileged workers. In this, they differ strongly from unions who also represent lower- skilled, and thus less-privileged, workers. To make sure that all their members can achieve adequate insurance against labor market risks, such unions are far more willing to consider redistributive welfare solutions that result in a leveling of income and risk between more- and less-privileged workers.
I have demonstrated the importance of union structure through an empirical case study of labor union involvement in the development of the British and Dutch welfare states during roughly the first half of the postwar period. This period presented a crucial epoch in the development of the modern welfare state. In the first decades of the postwar period, all advanced industrial nations experienced a sharp increase in both public and private social expenditure. Yet they differed markedly both in the overall level of this increase and in the share of this increase accounted for by private and (redistributive) public programs. As a result, societies came to differ substantially in their ability to protect all their members against the risk of economic misfortune and dependency. As we have seen in the previous pages, the Netherlands and the United Kingdom were good examples of this difference. The pages also showed how this related to differences in labor union structure between the two countries.
In the Netherlands, the three industrially organized labor union federations proved to be the main initiators of plans that aimed to increase the generosity of public welfare programs through risk redistribution and systems of contributions and benefits that benefited lower-paid workers at the expense of higher-paid workers. In the United Kingdom, matters were quite different. During the entire period under investigation in this book, the TUC never initiated a single redistributive contributory initiative. Moreover, it gave at most lukewarm support to all of Labour’s public welfare initiatives. The reason for this lack of enthusiasm lay in the ‘craft’ or ‘occupational’ nature of many of its union members. These unions represented workers who stood to lose from the redistributive consequences of such initiatives, and thus organized against it. As a result, and even though it organized a relatively high percentage of all workers, the British union movement did anything but increase the political efficacy of the Labour Party.
189 In the Netherlands, by contrast, the union movement so actively pushed for redistributive welfare initiatives that public welfare development there did not depend on the presence of a Labor-dominated government. The 1955 General Old Age Act, the 1966 Sickness Act and Act on Disability Insurance, and acts that increased the generosity of the unemployment insurance and state pension in respectively, the mid- and late 1960s, all passed parliament under confessional-liberal governments – and thus with Labor in opposition. All these acts also came about after strong and prolonged pressure from the labor union movement, and all of them were prepared in detail during discussions between union and employer representatives in one of the country’s many corporatist bodies. This shows that labor unions do not have to organize a high percentage of workers to push for redistributive welfare proposals – after all, the Dutch union movement, even then, fell into, at most, the middle of the organizational density levels spectrum. Much more important is that unions are united in their support for these initiatives.
Three of the chapters of this book deserve to be summarized separately. These are chapters 3 to 5, in which I analyzed how the organizational structure of the British and Dutch labor union movements determined their stances on the development of public provision for the elderly, the unemployed, and the sick and disabled. Together with chapter 6, which will be discussed below, these chapters formed the empirical core of this book. Their findings on the way in which union structure affected the British and Dutch labor union movement positions on redistributive public welfare development during the first half of the postwar period can be summarized as follows.
In chapter 3, I compared the postwar development of public old-age pension provision in the Netherlands and the United Kingdom. I began this chapter by contrasting the support of the TUC for a completely flat rate “egalitarian” pension system with the support of the three union federations in the Netherlands for a redistributive solution combining flat rate benefits with earnings-related contributions. I then analyzed the TUC’s unwillingness to support Labour’s proposal to introduce a similar system in the United Kingdom, and its later reluctance to align itself with Labour’s superannuation proposals. I showed how the TUC’s reluctance stemmed from the strong opposition of its craft and occupationally organized white-collar union members to the redistributive consequences of these proposals. I also showed how the failure of consecutive Labour governments to improve matters for Britain’s poorer pensioners related to this opposition. In the final section of this chapter, I returned to the Netherlands, to analyze how the three Dutch union federations’ success in increasing the public pension benefit related to their ability to promote its redistributive features.
In chapter 4, I compared the postwar development of public unemployment provision in the Netherlands and the United Kingdom. I began this chapter by emphasizing that public unemployment development inevitably involves a redistribution of good and bad risks between different grades of workers. I then set out to show that British craft and occupationally organized unions were as opposed to any extension of risk reapportioning as they were to the introduction of a redistributive contributory system. I illustrated how this opposition complicated attempts to improve the generosity
190
of the public unemployment insurance in the United Kingdom. In the second part of the chapter, I contrasted this with the agreement of the “big three” in the Netherlands to increase the level of risk reapportioning among different categories of workers, and to introduce a contributory system that benefited lower-paid workers at the expense of other workers.
In chapter 5, I compared the postwar development of public provision for the sick and disabled in the Netherlands and the United Kingdom. I began this chapter by noting the disparity in the treatment of work-related and non-work-related disabilities in the United Kingdom. I then analyzed the TUC’s opposition to several Labour attempts to improve public provision for non-work-related disabilities, and showed how this related to the resistance of many of its union members to the redistributive consequences of these initiatives. In the second part of the chapter, I contrasted the TUC’s stance with that of its Dutch counterparts. In this part, I demonstrated that the very generous outcome of public disability insurance development in the Netherlands was possible because the unions there pushed for highly distributive solutions.
Although the main purpose of this book has been to demonstrate how the organiza- tional blueprint of labor unions affects their involvement in welfare state development, I have also aimed to contribute to the now-popular topic of employer interest group involvement in welfare state development. I have attempted to do so in two ways. First, I have explored the arguments of recent employer-oriented writings by looking at possible instances in which British and Dutch employer interest groups may have supported public welfare initiatives because they appreciated their “productive” or “redistributive” consequences. I have found no evidence of such instances. Second, I examined the ways in which union structure impacts employer interest group stances on welfare state development. I have suggested two ways in which union structure affects the positions employer interest groups adopt.
I have dealt with the first issue most thoroughly in chapters 4 and 6. Chapter 4 dealt, among other topics, with the introduction of a redundancy payments scheme in the United Kingdom in the first half of the 1960s. The introduction of such a scheme was first publicly proposed by a Conservative government and eventually introduced by a Labour government. Both governments justified the scheme by arguing that it would improve the operation of the labor market by facilitating labor mobility between more- and less-productive sectors. Chapter 6 dealt with the use of social security schemes for redundancy purposes in the Netherlands in the 1970s and 1980s. This use was greatly facilitated by two important decisions made during this period. The more important of these was the 1973 decision to “broaden” the use of the labor market consideration clause of the 1966 Act on Disability Insurance. Second in importance was the 1976 decision to extend the duration of the unemployment benefit for workers aged fifty- seven-and-a-half and over, and release them from the obligation to look for work. These decisions greatly facilitated the use of the public disability insurance and public unemployment insurances to dismiss workers, in particular older ones, thereby effectively turning them into “early retirement pathways.” From the late 1970s on, a third such pathway emerged in the form of industry-wide retirement schemes.