Flexibilisation, Dualization or Deregulation? Three trajectories of change in collective social risk protection

Social protection for workers and citizens is changing. Alongside changes resulting from retrenchment, processes such as post-industrialization and individualization affect the foundations that support collective arrangements not just in the welfare state but also in the industrial relations domain. The interplay between these two domains is integral to understanding social protection systems in contemporary societies. While the social security systems in modern welfare states protect workers against the risk of income loss in cases of unemployment, sickness, disability or old age, these welfare state arrangements have their origins in the industrial relations domain. Employers, employers’ organizations and unions began regulating the organization of working life and social security in (collective) labour agreements. The relationship between developments in the welfare state and industrial relations domains differs, however, from country to country.

This paper uses the findings from a comparative study on the developments in unemployment insurance and parental leave in the welfare state and industrial relations domains in Sweden, Germany and Australia to outline three different trajectories of change. It focuses on the changes that have taken place in social risk protection in both domains, what the interplay is between these two domains and in the end, what this means for the level of social risk protection provided to citizens or workers in these countries. The findings stem from analyses of qualitative interview material from interviews with union experts, document analysis and analyses of occupational welfare arrangements in all three countries, analysed using a ‘thick description’ approach in the analytic sociological tradition.

The findings reflect dynamic developments over several years, and in some cases decades, of collective social risk protection. While our case countries show some similarities, such as increased attention for post-industrial risks including the reconciliation of work and care, there are notable differences. Thelen’s (2012) recent review of the Varieties of Capitalism (VoC) approach offers a means of interpreting these different trajectories of change. Sweden demonstrates a trajectory of embedded flexibilisation, meaning the level of equality in social protection remains high and hardly changes, but strategic employer coordination has diminished. Germany shows evidence of dualization, a strategy in which coordination remains more or less stable but the level of equality declines (Thelen 2012: 146). The Australian case provides evidence of deregulation combined with social investment: deregulation, or a movement in the direction of less equality (which was already low) and less coordination (which also was low) combined with strategies aimed at improving labour market participation.

In conclusion, we demonstrate that the fact that welfare state politics have to deal with retrenchment as well as modernization creates a dynamic different from the new politics approach of Paul Pierson and makes strategies other than exchange and blame avoidance possible. We outline these strategies in the three case countries and attempt to understand them by looking at union behaviour within three unique, institutional settings. We conclude that when we look at the interplay between social security and occupational welfare across welfare states there are no universal processes of compensation or reinforcement to be found. Different national trajectories, resulting from different national ideological and institutional legacies, result in different outcomes. The implications of our findings are discussed in the conclusion.