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SOCIOLOGY OF LAW, EUROPEAN LAW

2012

Employment Strategy in contrast with the EU employment strategy Keyword: EUs employment strategies, Swedish employment strategies, Economical knowledge, Employment system, Labor market, Skill formation, Lifetime employment, Innovation system; EU, Sweden, Japan, cultural legally,

Student Ana Froki Supervisor: Johanna Alkan Olsson Master of Education, Lund’s University Mars 2012

Contents Summary EU employment and job strategy Scope of study  

Changing Employment Patterns - Fall case Sweden General employment trends and job dimensions – Fall case Japan

Brief discussion of the “golden” triangle References

Summary In our era, EU is going through major structural upheavals and have different perspectives presented on the implementation of these changes looking at EU employment system, this can hardly be overstated. The institutions and practices of the EU employment system are closely linked to the Swedish model and also not. The similarities can be seen in implementation of skill formation, economical knowledge, job creations, innovational system, employment system, labour market, lifetime employment etc. The relevance of EU employment strategies is seen in the accumulation and preservation of knowledge within companies. The knowledge sharing, problem solving capacities and high commitment of any EU-employees are very much supported by the Swedish employment system. In essential this is the prime purpose of this rapport. Each of the following sections is focusing to look at specific changes in the EU economic environment and what challenges are for the further labour market. This report studies want to light up EU expert knowledge of economy and policy advice of labour market field with especial focus in particular Sweden and Japan as cultural legally of contrasting employment market in the EU. The report compares employment strategy in Sweden with the EU employment strategy. The comparation context in the end brings in discussion of employment system of both EU and Sweden and their respective working methods of solving employment system with also in terms of the creating the new jobs on the labour market policy agenda towards Japan. It is not difficult to guess that EU have impact on Swedish employment system but in comparation with Japanese internationalization of the huge industrial system due competitive pressures from low labor cost countries as Sweden in EU the adaption of certain necessities are more interesting to follow in the end of this rapports discussion.

EU employment and job strategy EU legalization of general informing about employment law and job strategies has been presented in Directive 2002/14/EC (http://europa.eu.int/scadplus/leg/en/cha/c10817.htm) in the European Community. The propose of 2003 EU Employment Guidelines (Ennals, 1998, 2000; Ennals, 2000) have full focus on three over-arching themes: full employment; quality and productivity at work; and cohesion and an inclusive labour market. 1|Page


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However, policies to promote ‘employability’ has own outlines of broad guidelines and practical arrangements that are to be defined and implemented in accordance with national law and industrial relations practices in the individual Member States as a center of the European Employment Strategy 2003 (EES). The national governments in European institutions experienced during 1990s as well as 1980s mass unemployment that’s why the pressure of European social model was with top high priority with measurement about promoting access to work. In the re-formulated version of EES 2003 (European Commission, 2003) the term of “employability” wasn’t explicit. According European Commission (2003) the promotion of employability of workplaces for young people as well as unemployed and the all other potentially disadvanted groups in the labour market remains an important object in reinformation of the “new” EES (European Commission, 2003). Today´s EES (http://ec.europa.eu/social/main.jsp?catId=101&langId=en)speaks in original of including more flexible, long-termed strategy of promoting better “investment in human capital and strategies for lifelong learning”. However, this and many of the Commission’s other guidelines for implementing the Strategy reflect the preexisting focus on employability including: the promotion of active and preventative measures for the (especially long-term) unemployed and inactive; improving financial incentives to make work pay; and promoting active ageing (European Commission, 2003).The European Employment Strategy, has own combat unemployment system for different national positions, those strategies has been promoted specifically in policy learning as European policy-making. Partly because policy making has been subsumed under the Lisbon target to make the European Union the world’s leading ‘knowledge economy’, and partly because new methods has been open when new coordination appears as offer of exciting new approaches of “old-style regulation”. Task force has been discussed specifically by Wim Kok, who says that the Commission has recently expressed concern about EES´s actual - real impact - on national policies. According Kok´s report some pessimistic evaluation has been cached of the EES on the process of convergence towards the employment target that has slowed down or stopped in the context of economic slowdown since 200 (Biagi and Biagi 2000).According to Susan Milner (2004, p.11) the EES subordination of the Lisbon agenda means that some policy objectives, notably the quality of work and to some extent gender inequalities, have been neglected whilst other policy objectives, particularly pensions reform and the wider ‘active ageing’, have become more important (Guy Palmer and Suriya Edwards, 2004, p.11).

Scope of study Many questions appear when it comes to the new patterns of “working life” and how those are changing in EU and all different Members States. But with the above short presented material of EES (European Commission 2003) those unfortunately today “anecdotal signs” of labour and employment standards has changed the direction of job strategies in following: more frequent job changes, more freelancing, more working at home, more opportunity but also more uncertainty. The old contract is shredded in between employers and workers. For me it´s unclear what will replace it.

 Changing Employment Patterns For the purposes of this study, consider only general internal patterns of employment strategies of dynamics. The interest is rather focused on the overall impact of policy advice of labour market on organisational performance and quality of individual working life from EES sigh on Sweden. This report want to light up EU expert knowledge of economy and policy advice of labour market field with especial focus in particular Sweden and Japan as cultural legally of contrasting employment market in the EU. Therefore this report at fist compares employment strategy in Sweden within the EU employment strategy.

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Fall case Sweden - “From the cradle to the Grave” Social Welfare – the contraction of two words means world to someone who lives in Sweden today. Social Welfare system is Swedish proud and today is currently the most popular concept for employment and labour market reforms in the European Union. This is clearly testified by European Union that has called every Member States to pursue reforms in labour market and social policies under an integrated social welfare approach, and commits the European Commission to establish a common set of principles on Swedish model of Welfare. According to the European Council the benefits of such a social welfare approach are improved adaptability for workers and enterprises and more open and responsive labour markets, more productive workplaces, and positive interdependencies of competitiveness, employment and social security (Council of the European Union, Brussels, 18 may 2006). Labour and employment strategy have own definition in Sweden towards EU employment strategies. For example Sweden have own welfare policies and employment context of family and the labour market in Sweden. First time we speak of unemployment raise is during major recession in 1990s. The first half of 1990s was problematic financial period from social political aspects in both economic and demographic way. Today’s situations in Sweden regarding employment and job strategies are based on EU policies and political view. Sweden’s welfare system have been improved during later part of 1990´s regarding same social groups in society’s as young lone mothers and immigrants for example (Ginsburg 2001).

Sweden has developed a welfare society into a strong public sector that every single country in the world wants to copy, starting with EU. Varmstad (2007) tried to explain the main question that all Swedish asks "what is so Swedish about the Swedish welfare state?" (Vamstad 2007, p.18). Vamstad (2007) explains as being particularly Swedish is main characteristics of being part of all the other European countries. I find that as defining moment in this book, therefore there is many other principals that could be saying more or be argued on to be less than exclusively Swedish. Having said that I tried to draw silent parallels over the conclusions that define in particular category of welfare regimes, to which Sweden could belong.

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From European Commission point of view there is certain things that are recommended among integrating and updating tax benefit system and increasing employment incentives by developing unemployment compensation into employability insurance (http://actrav.itcilo.org/actravenglish/telearn/global/ilo/seura/euwok.htm). And not at least maintain narrowing of the gap between total salary costs and net take-home pay for low-skill workers; increasing employment incentives and opportunities for older workers; and activating integration policies associated with minimum social benefits (http://actrav.itcilo.org/actrav-english/telearn/global/ilo/seura/eusocial.htm). In Sweden the traditions is to encompassing and redistribute income security and active labour market policies. Sweden possess a long history of active labour market and different kind of policy measurement, all based on a strong work ethics. Those traditional labour market policies are described as a universalistic model of activation in contrast of selective ways of activation. Meaning of active labour market policy is known from the mid-20th century. Active policy is directed by different segments of population and integration and re-integration from unemployed citizens into the active labour market. Those two models are combined from formally to strict forms of work enforcement within social protective service (Johansson and Hvinden 2007). Swedish overall goal for well functional labour market policy is to contribute to well-functional labour market and to fulfill the goals of the European Employment Strategy. Swedish Government attributed three areas in focus for the labour market policy. First area is to stimulate the labour supply by turning unemployment insurance into security of reconversion insurance, on the levels that the compensation makes it profitable to work. Second area is to make labour demand by interventions which will reduces employers cost to employ a person on difficulties of finding a job and those marginal position in relation to the labour market. Third area in focus of making new labour market policy is to match job seekers and vacancies; by means of making persons with long term unemployment and on long term sick leaves into active employer (Sibbmark 2009 p. 5; EU, 2004). The practice of active labour market policy which include new job strategy for every day are including every combination of job service, guidance, labour market programs, and vocational induction schemes, rehabilitation for working life and activities for young persons with functional limitations. The new job strategy include even implementation of skill formation, economical knowledge, job creations, innovational system, employment system, labour market, lifetime employment etc. The relevance of EU employment strategies is seen in the accumulation and preservation of knowledge within companies. The knowledge sharing, problem solving capacities and high commitment of any EU-employees are very much supported by the Swedish employment system Those kind of the implementation of the measures are the local employment offices (Sibbmark 2009). National Government authority Swedish Public Employment Service (Arbetsfรถrmedlingen) are maintain the jobs through the local employment offices. In summary the changing nature of work is main thing coming from European Commission Directives regarding in between any member state policy design by letting any state improve flexibility of those designed prove security. Changing balance of employment and job strategies come even when we speak of gender and the balance those two groups can maintain in working life. The equal opportunities for job issues are still in terms of social protection as well as ageing and the population of the Europe, where the rapid growth are forcing pace of pension and those kind of reform. EU employment strategies 4|Page


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are not only in need to reform because of coordination of national security but even for the other kind of issues that comes up when we talks about people moving within the EU. Swedish labour market is based on high employment levels and 100% active labour policies those thing maintain good welfare society which is based on only working market economy that goes through government intervention and social democratic values. Not even equality is left in Sweden when it comes to welfare which through any Swedish participate to develop an universal welfare system based on generous transfer payments and extensive public and social services.

 General Employment Trends and Job Dimensions In this following chapter I will apply the social welfare framework that characterise the relationship between different forms of employment and job strategy in Japan. I will try lift up those characterised traditions in combination with job stability of Japan. I will also try to lighten up Japanese permeated life-time employment practice towards Swedish employment system and EU Employment strategy.

Fall case Japan I want to being with the explanation of employment protection contra legislation in Japan that comes through in rapport of OECD (2005c) where the regulation of permanent workers are on individual dismissal, specific requirements for collective dismissal, and regulation of temporary forms of employment. Those type of question are threating Japanese job security. Something that characterized Japan is that there are no courts for specially designated for labour disputes. Those type of issues as labour and employment related lawsuits can only be filed in ordinary courts (Araki 2002, p 11-12, 28). Japan is well known for its life-time employment system. In relation to the concept of social welfare and EU employment and job strategies provides high job security, where job stability and low external numerical flexibility is traded off against high internal flexibility. The Japanese labour market systems have traditions on job stability and maintenance of employment within firms. This type of internal labour markets cannot be in context and find own sharp in contrast to the external labour market as Swedish system (ILO 2005). After World War II Japan was in huge economic and material crises. The establishment of economic stability and minimum standards of living was the highest priority to the government (Araki, 2002). Through the years Japanese maintained to developed flexible mass production firms with high quality all based by American organisational models, with different procedures, but still jobs of evaluation and huge lay-off system, all adopted by Japanese traditions and norms. Japan have huge labour management consultations joined basics of long term labour relation through legal enforcement, employers and enterprises developed internal enforcement mechanisms (Passet 2003, p. 161). Japanese doesn’t seem to work with contractual state of lifetime employment, this kind of employment legislation or collective agreements, is considered as informal and mutual expectation between employers and workers. Japanese have unique recruitment practices seen in how employers hire workers immediately after graduation and then retains them in open-ended contracts until retirement by age of 60. Something that is similar to Swedish system when it comes to full time permanent worker who cannot seek or apply for any other jobs in the external labour market and from which employer expect to remain loyal and committed to the company (Araki 2002). This kind of typical mutual expectations is usual in Japanese firms. In Japan it talks about lifetime employment guarantees, something that in Sweden have departs. Lifetime employment guarantees is bounded with commitment and not fearful dismissal. In Japan is also very usual that manager’s position gives high wage and constant freedom of action; higher firm positions are also close to consultation with employees and their unions. This form of actions by employee through rewardness and only “higher level of firms” acceptance shows rewards 5|Page


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to those who are ‘commitment’ , ‘flexible’ and fast adaptive to new technologies and new market opportunities. In Japan is also usual that when company faces difficulties that worker are willing to accept a complete change job functions and so undergo trainings and became more likely to leave the company, those situations brings even more acceptance of wage etc. According to Japanese system of employment and job strategies those kind of actions show judicial practice and never legalization of any kind (Araki 2002, chapter 2).

Brief discussion of the “golden” triangle I started this paper with welfare contra work in mind. I made classification through EU employment system and job strategy by viewing on first step Swedish way of working though those given strategy. I could not hold myself of not making comparative analyze of as such interesting country as Japan, that’s why welfare through work method generate good test result of my hypothesis as well as highlight case-specificities. I could find massive literature of welfare states, from every given category of welfare regimes in Sweden all from 1990 until today. What’s makes my paper interesting is that in repeatedly employed regards every EU country wanted to be a part of Swedish welfare phenomena. Because of EU countries I could easily simplify the reality to an extent that we can hold some variables as constant founded on OCDE. The construction of welfare and job typology is added as axis, as my own attempt to analyze the domain of labor market institutions from EU, Sweden and Japan. The welfare regimes based on the private relation mix through the income and basic of welfare market, state, law, as well as individuals in society and family scored qualitatively different from workings states see below.

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The employment performance are different in EU countries with the regard of my paper I chose following criteria indicate into employment as well as unemployment in different countries among the population as well as equalities of employment contra unemployment rates from both standardized as well as and long-term, youth rates, male rates, female rates. Both diagrams shows the distinguish rates of averages from the 1990s with contained cyclical changes of economies. I used employment rates instead of unemployment rates regarding both male and female. Moreover job situation through the past couple of years shows different variance among countries of EU in comparation to Japan itself, the numbers are quite wide and I see those reflecting on different public policies toward retirement processes as well as societies etc.

From the above showed statistic we can acutely we map country for country in EU towards Japan and analyze along with labor market institutions measured by the six indices and employment performance indicated by the six criteria. The welfare regimes can be observed by labor market institutions as said before but only with divination of Anglo-Saxon countries and elsewhere. Anglo-Saxon countries in EU are low degreed of regulation toward workers regulation of dismissal and temporary workers. The real differences between Scandinavian 7|Page


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countries seem to be falling into the category of social democratic welfare state and Continental Europe. The existence of these outliers of every single country in EU makes each scholars of regime important to analyze Japanese typology of welfare states towards work. The Japanese fall case tends to be excluded from comparative studies of social policy, because if the fact that Japan is considered as a hybrid case of the liberal regime and the conservative regime (cf. Huber and Stephens 2001, Scharpf and Schmidt 2000, Esping-Andersen 1999, 1990, 1996). With Japanese conservative regime in consideration the various geographical distance from the Continental European countries stays in mind. Employment performance within each regime (taking in consideration Sweden and Japan only) is wider than the labor market institutions Swedish model of welfare states. The differences in between levels of employment, welfare state and work do not correspond the typology by itself. The result of this paper is not surprising because labor market institutions affect distributional patterns of both employment contra unemployment risks on the same level of range. In fact analyzing only the statistic above (tab 1 and tab 2) we can see the differences between varying employment rates among different groups of workers such as young people, women or male workers. What does it says? Yes that would say that for example unemployment is highest in EU in Southern Europe while Scandinavian countries, Anglo-Saxon countries, Continental Europe and Japan are located somewhere in the middle. You can also make notice of equalities that Anglo-Saxon countries are most unequal in contrast to the Nordic countries. Continental Europe and Japan are again in the middle. Early retirement appears to be highest in the Netherlands, Finland, France, Belgium, and also Italy which is in contrast to countries as Denmark, Sweden, and Japan where elderly workers stay in the labor markets longest. So if we choose to make thought switch for example we can instead ask ourselves why is Japan able to avoid welfare. Some of the hypothesis I can think of is that Japanese lean social safety are very high with the strong incentives to work, that truly exist in Japan. Second opinion that comes up is that there is low pick up rates of social assistance and they have developed late public pension system. In summary the labour market of EU treat employed or unionized workers as insiders. In the case of Sweden we can see asymmetrical EU regulation. Sweden have typological boundary when it comes to permanent workers and atypical workers. Sweden have also, as EU require, high degrees of employment protection such a legislation increase interests in permanent regular workers. Those type of boundary are deeper in Japan for example. The fact that European Union prioritizes employment protection elevates organizational structure of any European Country high. Off course those preferences required from EU employment strategies can be varies goals across place and time and state as well as organizations. Generally, EU employment strategy goes with pursuers of the real wages, better working conditions, and job protection. When EU employment strategies require high quality of worker any country in Union can face trade-offs among these goals, as we can see in Sweden where highest employment priorities are, they are placed differently from rest of EU Members State. In fall case of Japan we can see that the unions have been concerned the most with the preservation of life long employment. EU employment strategies are most vigorously resisted of any changes that might potentially undermine long-term employment practices and employment protection legislation for permanent workers (ILO, 72, 97, 99).

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Referencer: Araki, T. (2002): Labour and Employment Law in Japan, Tokyo: The Japan Institute of Labour Biagi Marco, Biagi Marco (2000) Job Creation and Labour Law, From Protection Towards Pro-action Continental European Social Policyî. in Gosta Esping-Andarsen ed. Welfare States in Transition. London: SAGE Publication Council of the European Union, Brussels, 18 may http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/89013.pdf

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Ennals R., (1998) “Partnership for a new organisation of work and Europe as a development coalition: an interview with Allan Larsson”, Director-General of DGV, European Commission, Concepts and Transformation, Vol. 3, Nos 1-2, pp 143-152. 1998. Esping-Andersen, 1999. Social Foundations of Postindustrial Economies. Oxford: Oxford University Press. _____. 1990. The Three World of Welfare Capitalism. Princeton: Princeton University Press. _____. 1996. Welfare States without Work: ìthe Impasse Of Labour Shedding and Familialism in Ennals R., (2000) Work life 2000: quality in work, yearbooks 1, 2, 3, Springer Verlag, London 1999, 2000, 2001. EU (2004) ‘Labour market transitions and advancement: temporary employment and low-pay in Europe’ in Employment in Europe 2004 http://ec.europa.eu/employment_social/employment_analysis/eie/eie2004_chap4_en.pdf Ennals R., (2002) The existing policy framework to promote modernisation of work: its weaknesses, DG Employment and Social Affairs, European Commission, Brussels 2002. European strategy of law and http://ec.europa.eu/social/main.jsp?catId=101&langId=en

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Ginsburg, N. (2001) "Sweden: The social democratic case", in Cochrane, A. C. & Sharon, J. G. (eds) Comparing welfare states, London: Sage publishers. Huber, Evelyne and Stephens, Jophn D. 2001. ìWelfare State and Production Regimes in the Era of Retrenchmentî. in Paul Pierson ed. The New Politics of Welfare States. Oxford: Oxford University Press ILO (2005): World Employment Report 2004-05: Employment, Productivity and Poverty Reduction, Geneva: ILO. International Labour Organization (ILO). 1972. Employment, Incomes and Equality: Strategy for Increasing Productive Employment in Kenya (Geneva, ILO). ------------------. 1997. The ILO, Standard Setting and Globalization, Report of the Director General, 85th Session, Geneva. -------------------. 1999. Panorama Laboural 99 (Lima, ILO).

Information on Directive 2002/14/EC is http://europa.eu.int/scadplus/leg/en/cha/c10817.htm

available

at:

Directive

2002/14/EC

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Johansson, H. & Hvinden, B. (2007) "Nordic activation reforms in a European context: a distinct universalistic model?", in Hvinden, B. & Johansson, H. (eds.) Citizenship in Nordic welfare states: dynamics of choice, duties and participation in a changing Europe, London: Routledge. OECD (2005c): OECD Economic Surveys: Japan, Paris: OECD Passet, O. (2003): Stability and Change: Japan’s employment system under pressure, pp. 159-218, P. Auer & S. Cazes, eds. Employment Stability in an Age of Flexibility – Evidence from Industrialised Countries, Geneva: ILO. Proposal for a council decision on guidelines for the employment policies of member states, Brussels: Commission of the European Communities, 2003 Palmer Guy and Edwards, Suriya 2004, p.11 Reflections on the European Employment Strategy: How Relevant to the UK? Published by the New Policy Institute Scharpf, Fritz W. and Vivien A. Schmidt (eds.) 2000. Welfare and Work in the Open Economy. Vol.1: From Vulnerability to Competitiveness. Oxford: Oxford University Press. Sibbmark, K. (2009) Arbetsmarknadspolitisk översikt 2008, Rapport 2009: 21, Uppsala: IFAU – Institutet för arbetsmarknadspolitisk utvärdering. Vamstad, J. (2007) Governing Welfare. The Third Sector and the Challenges to the Swedish Welfare State, Östersund: Mid Sweden University.

Internet sources: http://actrav.itcilo.org/actrav-english/telearn/global/ilo/seura/eusocial.htm

http://actrav.itcilo.org/actrav-english/telearn/global/ilo/seura/euwok.htm

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One of My Analysis