The Reconfiguration of the Employment Regime in Portugal Under Austerity: Neoliberal Trends and Inequality

Thursday, 2 July 2015: 2:15 PM-3:45 PM
TW2.1.02 (Tower Two)
Maria da Paz Campos Lima, Dināmia'CET, Lisbon University Institute, Lisbon, Portugal
The reconfiguration of the employment regime in Portugal under austerity:  neoliberal trends and inequality

Maria da Paz Campos Lima, Dinâmia-CET-IUL


Abstract: The discussion of varieties of capitalism LMEs and CMEs has pointed to the relevance of definition of ‘mixed market economies’ (Molina and Rhodes, 2005) to understand the specificity of Southern European Countries. Furthermore, the discussion of employment regimes (Gallie, 2007, 2013 ) highlighted that the varieties of capitalism approach did not give enough attention to the differences between countries within the CMEs variety in relation to labour market regulations, collective bargaining, and welfare protection, suggesting that they should be grouped in two distinct types of employment regimes: the inclusive regime encompassing the Nordic countries and the dualist regime encompassing continental countries; while LMEs countries were included in the liberal regime of employment. As for the Southern European countries they included some characteristics of the dualist regime, but presented lower levels of welfare protection. Among other, the critical differences between employment regimes concern three main issues, which have impact in inclusiveness/equality: employment protection, collective bargaining (in particular trade union density and collective bargaining coordination and coverage), and unemployment benefit regime. 

After the 2010 sovereign debt crisis, austerity policies and policies centred on competitive wage depreciation and competitive deregulation of social legislation (Pochet and Degryse, 2013) escalated at the EU and national level in order to achieve ‘internal devaluation’.  One crucial question is whether they contributed to the radical reconfiguration of national employment regimes, in relation to employment protection, collective bargaining and unemployment provisions, and if so which countries were mostly affected and in what direction?  Our hypothesis is that these policies contributed to the reconfiguration of the employment regimes towards the liberal model, undermining the existing institutional foundations of equality and inclusiveness of the labour markets in Southern Europe, by reducing simultaneously employment protection (facilitating collective and individual dismissals) and the level of protection of unemployment provisions,  and by reducing dramatically the level of coordination and coverage of collective bargaining, as well as by freezing or cutting down minimum wages.

Against this background, the paper focuses firstly on the policies launched in Portugal, in the period 2008-2014 regarding employment protection, unemployment regime, collective bargaining (procedural and substantive rules) and wage policy, arguing that they eroded substantially the features of the employment regime in Portugal which distinguished it from the liberal regime of employment. Secondly, it examines the role played by supra national institutions (Troika) and the government in the definition of these changes, as well as the role and strategies of trade union and employer confederations. In particular it includes the analysis of the processes of decision making (unilateral decision and social pacts) and the responses in terms of social mobilization and protest, looking at how these processes contrasted with Portuguese industrial relations tradition. Thirdly, it explores the impact of such transformations in terms of increasing income inequality and poverty, transference of income from labour to capital and reduction of the quality of employment. Last but not least, it explores the impact of such transformations in the aggravation of the position of Portugal as a peripheral country (Rodrigues e Reis, 2012; Reis et al, 2013; Costa and Caldas, 2013)  and examines how they might suggest the reconfiguration of ‘mixed market economies’ by including further elements of liberalisation.