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Privatization of Public Services and Consequences for Labour

Privatization of Public Services and Consequences for Labour



Experiences from Europe - with author and researcher Christoph Hermann, Working Life Research Centre, Vienna, Austria.

Experiences from Europe - with author and researcher Christoph Hermann, Working Life Research Centre, Vienna, Austria.



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  • Wie haben diesen Prozess der Polarisierung und Fragmentierung von Tarifvertragsstrukturen für insgesamt 8 Branchen untersucht. In der linken Spalte sind die liberalisierten Branchen, in der Mitte die Tarifvertragsstrukturen der Ex-Monopolisten und rechts die der neuen Wettbewerber mit oftmals tariflosen Zuständen. Ich will jetzt gar nicht einzelne Bereiche herausgreifen. Entscheidend ist, dass es in keinen Sektor eine sektorübergreifende Regulierungen von Tarifstandards gibt. Abgesehen lediglich von den Post-Mindestlohngesetz für die Briefdienstleistungen und ab Mai 2009 die Affallwirtschaft

Privatization of Public Services and Consequences for Labour Privatization of Public Services and Consequences for Labour Presentation Transcript

  • PRIVATISATION OF PUBLIC SERVICES AND CONSEQUENCES FOR LABOUR European Experiences 19 November 2009 Toronto, Centre for Social Justice Christoph Hermann , Working Life Research Centre, Vienna
    • Presentation of the PIQUE project
    • Forms of liberalisation, privatisation and marketisation
    • State of liberalisation, privatisation and marketisation
    • Company reactions
    • Employment, working conditions, HRM, industrial relations
    • Trade unions strategies
    • Conclusions
    • Three-year project funded by the European Commission in the 6th framework programme
    • 6 countries: Austria, Beligum, Germany, Poland, Sweden, United Kingdom
    • 4 sectors: Electricity, postal services, local public transport, health services/hospitals
    • Literature and data analysis
    • Company case studies
    • Survey on users‘ perspective
    Privatisation of Public Services and the Imapct on Quality, Employment and Productivity (PIQUE)
  • THE PIQUE CONSORTIUM Forschungs- und Beratungsstelle Arbeitswelt, Vienna, Austria Instituut voor de Overheid, K.U.Leuven, Belgium Wirtschaft- und Sozial- wissenschaftliches Institut (WSI) der Hans-Boeckler-Stiftung, Duesseldorf, Germany Working Lives Research Institute, London Metropolitan University, UK Instytut Socjologii, Universytet Warszawski, Poland Hoger Instituut voor de Arbeid (HIVA), K.U. Leuven), Belgium Institutionen för Arbetsvetenskap, Göteborgs Universitet, Sweden
    • Abolishment of monopolies
    • Competitive tendering
    • Changes in funding
    • Conversion into private law companies
    • Part and full divestment
    • Outsourcing, PPPs and PFI
    • Electricity: fully liberalised since 2007, oligopolistic markets, strong increase in private ownership
    • Postal services: full liberalisation in 2011/13, market dominance of incumbents; substantial increase in private ownership
    • Local public tranport: largely liberalised in Sweden and UK; concentration; international providers
    • Hospitals: Conversion into private law companies; changes in funding; privatisation in Germany, PFI in the UK
    • More privatisation than liberalisation
  • OWNERSHIP, MARKETS, REGULATION Austria Belgium Germany Poland Sweden UK Postal services Liberal. Limited Limited Rather limited Very limited Moderate Rather limited Privat. Substantial increase Substantial increase Strong increase Marginal increase Limited increase Limited increase Electricity Liberal. Limited Very limited Limited Strong Moderate Strong Privat. Substantial increase Moderate increase Substantial increase Substantial increase Substantial increase Very strong increase Local public transport Liberal. Limited Very limited Rather limited Limited Strong Strong Privat. Limited increase Very limited increase Moderate increase Limited increase Strong increase Very strong increase Hospitals Liberal. Limited Limited Moderate Limited Very limited Very limited Privat. Limited increase Moderate increase Strong increase Limited increase Very limited increase Limited increase
    • Mergers and acquisitions
    • Private and foreign ownership
    • Internationalisation
    • Diversification
    • Focus on lucrative market segments
    • Profit-oriented price policy
    • Cost-cutting
    COMPANY REACTIONS – Major strategies
    • Reorganisation and introduction of new technology
    • Streamlining of supply
    • Reduction in employment
    • Payment of lower wages
    • Casualisation and dequalification
    • Intensification of work
    COMPANY REACTIONS – Cost cutting
  • SUBCONTRACTING AND OUTSOURCING: German municipal transport provider
    • Substantial reductions in electricity and postal services
    • Increase in atypical and precarious employment
    • Part-time and marginal part-time
    • Temporary jobs
    • Fixed-term contracts
    • Self-employment
  • WAGE DIFFERENTIALS IN POSTAL SERVICES Average basic wages rates (in Euros) Incumbent old Incumbent new Competitors Austria 11 9.35 4-6 Germany 17 11,5 5-6 Netherlands 14 9 6-8
  • WAGE DIFFERENTIALS WITHIN FORMER MONPOLISTS   Electricity Postal services AT Lower wages for employees hired after 2001 (minus 13 %) Lower wages for workers hired after 1. August 2009 (up to minus 25 per cent BE Lower wages for employees hired after 2002 (between 22 and 34% less GE About 30% lower wages for employees employed after 2006 in the largest electricity company Lower wages for blue-collar workers hired after 2001 and white-collar workers hired after 2003 (up to minus 30 per cent) PO Higher wages for new employees
    • Increase in work intensity and work pressures
    • Increase in weekly working hours
    • Increase in part-time hours
    • Increase in overtime
    • Increase in split work-days
    • Temporary job instead of life-long employment career
    • Introduction of performance-related wage components
    • Weakening of seniority and performance-based promotion
    • Differential access to training
    • Dequalification
    • Growing fragmentation and emergence of two- and multiple-tier labour relations systems
    • Differences between ‘old’ and ‘new’ employees
    • Differences between incumbents and new competitors
    • Differences between parent companies, subsidiaries and outsourced services
  • THE DISMANTLING OF THE PUBLIC SECTOR LABOUR RELATIONS REGIME Public sector labour relations before liberalisation Labour relations after liberalisation Former Monopolists New Competitors Union density High High Low Collective bargaining Centralised bargaining Company bargaining Company bargaining, no bargaining Bargaining coverage High High Low Employment status Civil servants and public employees Decrease in civil servants, in crease in ‚private‘ employees Private employees Workforce Relatively homogenous workforce Segmented workforce (Core- versus peripheral staff) Employment security High Relatively high for core workers, increase in fixed-term contracts Low Competition on wages and working conditions Low High
    • Initial phase of rejection and opposition
    • Second phase: concession bargaining (early retirement, golden handshakes); protection of rights for established workers, concessions for new entrants
    • Third phase: building broader anti-privatisation alliances with social movements; anti-privatisation referenda
    • At the same time: resisting further restructuring; bargaining and lobbying for social regulation (e.g. minimum wages)
    • Fourth phase: promoting alternatives (re-municipalisation); public service directive; rebuilding the public sector
    • The commodification of public services demands for the commodification of public sector employment (use value is subordinated to exchange value)
    • Commodification of public sector employment = wage cuts, casualization, intensification
    • Growing inequality among workers as well as service users: Privatisation as class project!
    • Deteriorating service quality especially where quality depends on labour inputs and working conditions
    • Commodification of public services is an ongoing process with no end in sight
    • The financial crisis will cause additional budget cuts and likely result in more outsourcing, PPPs and PFI
    • Pressure on public sector trade unions and workers will further increase
    • Services will further deteriorate
    • Coalitions between trade unions and social movements must be intensified and expanded
    • New competitors and contractors must be organised
  • FOR DETAILED REPORTS, ARTICELS AND OTHER PUBLICATIONS please visit www.pique.at or contact [email_address]