Privatization of Public Services and Consequences for Labour: European Experiences

8/14/2019 Privatization of Public Services and Consequences for Labour: European Experiences

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Funded under the European Commissions FP6 (CIT5-2006-028478)

PRIVATISATION OF PUBLIC SERVICESAND CONSEQUENCES FOR LABOUR

European Experiences

19 November 2009

Toronto, Centre for Social Justice

Christoph Hermann, Working Life Research Centre, Vienna


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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

CONTENT OF THE PRESENTATION


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Three-year project funded by the European Commission inthe 6th framework programme

6 countries: Austria, Beligum, Germany, Poland, Sweden,United Kingdom

4 sectors: Electricity, postal services, local publictransport, health services/hospitals

Literature and data analysis

Company case studies

Survey on users perspective

Privatisation of Public Services and theImapct on Quality, Employment and

Productivity (PIQUE)


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THE PIQUE CONSORTIUM

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Forschungs- undBeratungsstelleArbeitswelt,

Vienna, Austria

Instituut voor deOverheid, K.U.Leuven,Belgium

Wirtschaft- und Sozial-

wissenschaftlichesInstitut (WSI) der Hans-Boeckler-Stiftung,Duesseldorf, Germany

Working LivesResearch Institute,London MetropolitanUniversity, UK

Instytut Socjologii,UniversytetWarszawski, Poland

Hoger Instituut voor deArbeid (HIVA), K.U.Leuven), Belgium

Institutionen frArbetsvetenskap,Gteborgs Universitet,Sweden


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Electricity: fully liberalised since 2007, oligopolistic markets,strong increase in private ownership

Postal services: full liberalisation in 2011/13, marketdominance 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

STATE OF LIBERALISATION, PRIVATISATIONAND MARKETISATION


7/22Funded under the European Commissions FP6 (CIT5-2006-028478)

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OWNERSHIP, MARKETS, REGULATION

Austria Belgium Germany Poland Sweden UK

Postalservices

Liberal. Limited Limited Rather limited Very limited Moderate Ratherlimited

Privat. Substantialincrease

Substantialincrease

Strongincrease

Marginalincrease

Limitedincrease

Limitedincrease

Electricity Liberal. Limited Very limited Limited Strong Moderate Strong

Privat. Substantialincrease

Moderateincrease

Substantialincrease

Substantialincrease

Substantialincrease

Very strongincrease

Localpublictransport

Liberal. Limited Very limited Rather limited Limited Strong Strong

Privat. Limitedincrease

Very limitedincrease

Moderateincrease

Limitedincrease

Strongincrease

Very strongincrease

Hospitals Liberal. Limited Limited Moderate Limited Very limited Very limited

Privat. Limitedincrease

Moderateincrease

Strongincrease

Limitedincrease

Very limitedincrease

Limitedincrease



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Mergers and acquisitions

Private and foreign ownership

Internationalisation

Diversification

Focus on lucrative market segments

Profit-oriented price policy

Cost-cutting

COMPANY REACTIONS Major strategies


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SUBCONTRACTING AND OUTSOURCING:German municipal transport provider



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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

EMPLOYMENT



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EMPLOYMENT IN GERMAN LETTER MARKET

0

10

20

30

40

50

60

70

German Post AG Competitors Total

Full-time Part-time Marginal part-time

%



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WAGE DIFFERENTIALS IN POSTAL SERVICES

Average basicwages rates (inEuros)

Incumbent old Incumbent new Competitors

Austria 11 9.35 4-6

Germany 17 11,5 5-6

Netherlands 14 9 6-8



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WAGE DIFFERENTIALS WITHIN FORMERMONPOLISTS

Electricity Postal services

AT Lower wages for employees hiredafter 2001 (minus 13 %)

Lower wages for workers hiredafter 1. August 2009 (up tominus 25 per cent

BE Lower wages for employees hiredafter 2002 (between 22 and 34%less

GE About 30% lower wages foremployees employed after 2006 inthe largest electricity company

Lower wages for blue-collarworkers hired after 2001 andwhite-collar workers hired after2003 (up to minus 30 per cent)

PO Higher wages for new employees



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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

WORKING CONDITIONS



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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

HUMAN RESOURCE MANAGEMENT



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Growing fragmentation and emergence of two- and multiple-tierlabour relations systems

Differences between old and new employees

Differences between incumbents and new competitors

Differences between parent companies, subsidiaries andoutsourced services

INDUSTRIAL RELATIONS



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Public sector labourrelations before

liberalisation

Labour relations after liberalisation

Former Monopolists NewCompetitors

Union density High High Low

Collective bargaining Centralised

bargaining

Company bargaining Company

bargaining, nobargaining

Bargaining coverage High High Low

Employment status Civil servants andpublic employees

Decrease in civil servants,in crease in private

employees

Private employees

Workforce Relativelyhomogenous

workforce

Segmented workforce(Core- versus peripheral staff)

Employment security High Relatively high for coreworkers, increase in fixed-

term contracts

Low

Competition on wagesand workingconditions

Low High

THE DISMANTLING OF THE PUBLIC SECTORLABOUR RELATIONS REGIME



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Initial phase of rejection and opposition

Second phase: concession bargaining (early retirement, goldenhandshakes); 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 andlobbying for social regulation (e.g. minimum wages)

Fourth phase: promoting alternatives (re-municipalisation); publicservice directive; rebuilding the public sector

TRADE UNION RESPONSES



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The commodification of public services demands forthe 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 serviceusers: Privatisation as class project!

Deteriorating service quality especially wherequality depends on labour inputs and workingconditions

CONCLUSIONS I


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Commodification of public services is an ongoing processwith no end in sight

The financial crisis will cause additional budget cuts andlikely result in more outsourcing, PPPs and PFI

Pressure on public sector trade unions and workers willfurther increase

Services will further deteriorate

Coalitions between trade unions and social movements

must be intensified and expanded

New competitors and contractors must be organised

CONCLUSIONS II


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Privatization of Public Services and Consequences for Labour: European Experiences