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Supporting the European Pillar of Social Rights: Social research for upward convergence in social and employment policies

Interview with Bea Cantillon, Professor of Social Policy and Director of the Herman Deleeck Centre for Social Policy at the University of Antwerp

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Bea Cantillon
The European Commission published today a Communication launching a consultation on a European Pillar of Social Rights. The initiative is part of President Juncker's agenda for upward convergence in employment and social affairs.

FP7 project ImPRovE – Poverty Reduction in Europe: Social Policy and Innovation provided important evidence and methodological innovations with regard to tracking poverty and enhancing social inclusion and protection in the EU. The research findings and recommendations produced by the project should help enrich the European Pillar of Social Rights.

Open and Inclusive Societies asked the coordinator of the project Bea Cantillon, a few questions concerning social exclusion in the EU, the role of social investment and research input into the Pillar.

Bea Cantillon is Professor of Social Policy and Director of the Herman Deleeck Centre for Social Policy at the University of Antwerp. She has acted as a consultant to, among others, the OECD, the European Commission and the Belgian government. Next to being the Chair of the National Administration for Family Allowances, she also served as a Belgian senator (1995-1999) and was the president of the National Reform Commission on the Belgian Social Security for independent workers (2000-2002). Prof. Cantillon is secretary-general of the Foundation for International Studies on Social Security and as of 2003 she is also a Fellow of the Royal Belgian Academy and member of the Belgian High Council for Employment.

 

In your work you have shown that the EU has not managed to make significant progress in the fight against poverty in the last decades. If anything there seems to have been a poverty standstill in the economically favourable years prior to the crisis, while since then the situation has mostly deteriorated. As it stands, the EU is far from reaching its Europe 2020 targets in poverty and social exclusion. How can this phenomenon be explained?

The lack of poverty reduction in the last few decades cannot generally be attributed to a lack of “effort” from welfare states. Spending has changed in form in most Member States, but it has not decreased; most welfare states are working harder than they did in previous decades.

Still, welfare has in many countries become less effective in supporting the most vulnerable. Work-poor households have benefited less from job growth while the poverty reducing capacity of social protection decreased to their detriment. Meanwhile, downward pressures on low wages have required increased gross-to-net efforts in order for welfare states to ensure decent working conditions and adequate social protection.

The symbiosis and contradictions between the market and the welfare state have increased in the last decades and so did spending to tackle new risks - child care, activation and the work-family balance. However, minimum income protections for the outsiders have become increasingly inadequate. Today, minimum income protection for jobless households falls short of the at-risk-of-poverty thresholds - in particular for families with children - even in the most generous of settings. Additionally, the wage floor has become increasingly inadequate for working age families in several Member States (although with important variations).

Certainly, some Member States have performed better than others in making progress towards the Europe 2020 goals but a greater collective effort must be made if the EU as a whole is to preserve living standards for its most vulnerable citizens.

Social Investment" as an all-encompassing approach to social policy has dominated discourse and practice in the EU in the last 15 to 20 years. This paradigm is largely premised on the principle of equality of opportunity – achieved through investments in people's productive capacities as pathways out of poverty vis-à-vis simple economic maintenance via the provision of benefits.

How effective has Social Investment – and its corresponding emphasis on workfare, activation, flexicurity, family policies and human capital investment – been in terms of combating poverty and exclusion; especially in relation to the crisis years?

The precise effectiveness of the policies relating to the “social investment” strategy and to equality of opportunities is difficult to determine. In part because the concepts can be difficult to disentangle from outcomes and more traditional social protection policies, but also because potential gains from the “investments” may not be realised in the short run.

What is clear, though, is that any shift towards the policies you’ve mentioned must be accompanied by strong minimum income protections if EU Member States are to alleviate poverty and exclusion; especially during tough economic times. Social investment cannot be a substitute for social protection. Instead, the two must be viewed as twin pillars of the modern welfare state.

Most scholarly research deals either with the extent to which the welfare state provides adequate social protection for those not employed or with the extent to which policies succeed in preparing people for the market. The first approach reduces the welfare state to "after-the-fact redistribution - let the market rage and then clean-up afterwards”, while the second one often disregards the protective and redistributive role of social policy. For a proper understanding of what is happening today, the two perspectives need to be integrated in a more comprehensive view on the relationship between the welfare state and the market. That was the purpose of the ImPRovE project.

Can something be said about the conceptual and practical robustness of "Social Investment" when considering issues of redistributive justice and the weight of inherited disadvantage?

As with any set of policies, it’s important to consider and assess how benefits and protections are distributed across the population. Evidence suggests that some of the benefits that relate to the “social investment” model are primarily distributed upwards in the socioeconomic ladder as opposed to supporting the most vulnerable - particularly during periods of adverse economic trends.

For example, childcare support often benefits middle-income families more than low-income ones because such provisions are only beneficial to low-skilled individuals if they are able to find decent jobs. The point here is, again, that the EU must balance social investment with social protection in order to ensure adequate protection for all.

Since the 1970s we are dealing both with growing dependencies and stronger contradictions between the new economy on the one hand and the welfare state on the other. The welfare state needs to generate well educated, creative and productive people and provide the means to combine work and family. Social investment is thus at the service of both the market and individuals. Conversely, poverty among workless households has steadily increased and reached dramatically high levels today. This is the consequence of increased tensions at the bottom of the labour market. Technological developments and globalization have rendered low-skilled and low productive work partly economically redundant. Jobs for low-skilled people are under pressure – both in number and in pay – and so is social protection in case of inactivity. To halt these downward pressures we need to embrace the principle of a minimum social floor as a core value at EU-level.

In 2001 under the auspices of the Belgian Presidency of the Council of the EU you co-authored (together with Atkinson, Marlier and Nolan) a pioneering report on social indicators.

Almost 15 years later in project ImPRovE you have (principally) put forward: a) reference budgets and b) input/policy indicators in minimum income packages as those innovations that would allow us to advance in monitoring and ultimately tackling poverty. Could you in a few words describe what these entail and their advantages?

Yes, we’re proud of the work that has come out of the ImPRovE Project. Our team has produced important work that, as you’ve mentioned, contributes much to our understanding of how reference budgets can be designed and utilised, and how the EU can make greater progress towards reducing poverty.

Our project on reference budgets has played an important role in the understanding of the realities of poverty in different Member States, and in contextualising the at-risk-poverty threshold. Reference budgets are designed to translate essential human needs into baskets of country-specific goods and services that people need in order to fulfil their different social roles in daily life. These budgets consist of a broadly accepted priced list of items required as a minimum by households of various types, living in various socio-economic circumstances.

The project allowed us to develop cross-nationally comparable reference budgets in countries such as Belgium, Finland, Greece, Hungary, Italy and Spain, generating an enhanced tool with which to contextualise and assess poverty and policies within these countries.

As you’ve noted, we’ve also proposed to insert indicators of minimum income packages in the European semester governance framework, which could support the EU-2020 outcome target indicators. Including carefully selected indicators of policy packages in the streamlined EU policy monitoring process (European Semester), would render Member States more accountable for the social quality of economic policies and anti-poverty strategies, and can bring out different policy mixes, available options, and potential imbalances.

Without interfering with national authority and policy structures, such indicators can pinpoint imbalances in the nexus of minimum wages, work incentives, and minimum incomes for jobless households. This leaves room for subsidiarity, monitoring, and mutual learning, starting from a broad view of the overall quality of social policy. The aim should be to support the Member States to find adequate country-specific economic and social balances.

In general, how can we move forward in combating poverty in Europe and what should the role of the EU be? In other words – and in relation to the EC's consultation for a European Pillar of Social Rights – what would you see as the next step forward for the EU in social policy?

A broad approach to minimum income protections, including minimum standards in social assistance and minimum wages, is the place to start. The principle of adequate minimum incomes for all should serve as a compass for a renewed convergence within the Union. As noted previously, minimum income protection for jobless households falls short of the at-risk-of-poverty thresholds, in particular for families with children (even in the most generous of settings). Incorporating a set of well thought-out policy indicators and benchmarks would contribute to a better monitoring of minimum income policies (in a broad sense) in the Member States in line with previous EU policy initiatives.

In light of inter alia changing work patterns, technological developments, migration and international competition, European welfare states will continue to be challenged by poor wages, growing tensions at the lower end of the labour market and the ability of social protection systems to provide adequate living standards for all. As national welfare states continue to work harder, yet achieve less, there is indeed an increasing need for the EU to reconsider its role in supporting Member States in their attempts to guarantee decent incomes.

 

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