Labour tensions weaken polder model

The ongoing tensions surrounding labour disputes has led many to claim the famous Dutch polder model of negotiation has failed. JOEP DERKSEN asks what this failure might mean for workers in the Netherlands.

First 16 billion euro in cutbacks, then another 18 billion euro and last month the government announced that again a deficit of 4.3 billion euro will have to be compensated. Prime Minister Mark Rutte (VVD) and his associates are eagerly looking to unemployment benefits (Werkloosheidswet, WW). If it were up to them, the terms for receiving these benefits after dismissal would be cut severely. The dwindling trade unions are furious, but are they still powerful enough to take a stand? We are all spectators in a show where the only thing that matters is money. Forget the poldermodel; long live corporate free entrepreneurship!

The Dutch “polder model” refers to the win-win negotiations between employers, unions and the government that has characterised Dutch labour negotiations in the past. In the Agreement of Wassenaar (1982) the polder model was reintroduced; the labour unions agreed to a cutback in working hours and the employers promised to hire more employees. At the time, it was the turning point for the Netherlands to come out of a deep recession. In the next thirty years, the three parties have always sat around the negotiation tables to discuss new wage increases and social benefits. Because of the willingness from all sides to compromise and cooperate, this was a very good system that brought a lot of benefits to the whole country and its inhabitants.

But now the government, consisting of the liberal party VVD (Volkspartij voor Vrijheid en Democratie; People’s party for freedom and democracy) and the socialists PvdA (Partij van de Arbeid; Labour Party), has taken up another attitude. Before negotiations start, the announcement is made how much money is at stake and how much money the other parties have to come up with. In the short run, this seems to be beneficial; the other "partners" protest and struggle at first, but after a (short) period of time, they give up their fight. In return for some small bread crumbs, they ultimately come to an agreement with the government. Leaving the hard working labourers with less money in their pockets and less job security.

To give an example: a disturbing trend is going on in the country; hard working employees are suddenly told that they will have to agree to become a flexible worker (flexwerker), so that they will only be paid for the time that they actually work. However, if the company decides to later on permanently fire the person involved, he will have a much lower unemployment benefit. The company involved has a short term benefit: it is much easier to get rid of flexwerkers than to fire "normal" employees. There is also a benefit for the government; a shorter term for unemployment benefits means fewer expenses for the Treasury. But ultimately, the economy as a whole will suffer: more unemployed people will spend less money, decreasing the profits of corporations, leading to even more unemployment.

It is of the utmost importance to change this vicious circle. A new "Akkoord van Wassenaar" could mean another turnaround for the nation’s economy. But with the current leaders, this seems too much to hope for. New negotiations were announced between the government, employers unions and trade unions, and all three sides dug in their trenches. It was a tough challenge; the government’s intended outcome is to stop the budget deficit from going up. The employers want to bring back the consumers’ confidence, so that they will spend more and the trade unions are terrified that even more people will be laid off.

Ton Heerts, chairman of the Federation of Dutch trade unions (Federatie Nederlands Vakverbond, FNV) announced Tuesday 5 March in de Telegraaf that he would not accept a cutting down of the WW or "relaxing" the terms  to lay off employees. Nevertheless, the FNV did start the negotiations a mere week later. And already the outcome is certain. Again a compromise will be made; the trade unions have to give in, the employers will make promises and the government negotiators will announce that the results will be good for the future of the Dutch economy.

But the outcome of the negotiations will not be an end result; it is just a matter of time before new bad news about the economy will be announced. The local governments (the cities and villages) have a combined budget deficit of 4.1 billion euro, it was announced last month. This deficit will also have to be covered. The polder model does not function anymore; employees and civilians will have to accept that they will have to pay for the failures that the money-makers, politicians and financial institutions have committed.

Until a new breed of influential people stand up, the type that does not look for their own benefits, but who are interested in reviving the economy as a whole, the Dutch citizens will in the future have to swallow or choke on any outcome of any negotiations.

(The Holland Times, April edition)