Abstract
Union responses to the liberalization of the political economy are often portrayed as either beating the same drum for decades or retreating into the defence of an increasingly small group of core workers. This article argues otherwise. A longitudinal ideational analysis of collective bargaining documents issued between 1976 and 2021 by the Netherlands Trade Union Confederation (FNV) shows that the Federation has gradually adapted its Keynesian-inspired interests to a more market-oriented understanding of the labor market, wages, and employment, legitimized by Third Way ideology in the 1990s. During the 2010s the union returns to Keynesian thinking. The findings suggest that the ideological conversion of the trade union movement may have been more significant than currently realized in explaining the liberalization of the labor market.
Social democratic trade unions built welfare states and de-commodified labor in democratic capitalist countries in the decades following the Second World War. Their role in the political economy since the advent of neoliberalism in the 1970s is much less clear. This paper investigates the role of the labor movement in the reconfiguration of the labor market since the 1970s via a detailed case study of the ideological underpinnings of the collective bargaining policies of the Dutch trade union federation FNV and the objectives it pursued.
The re-commodification of labor began in the mid-1970s, together with the retrenchment of the welfare state and the strengthening of market forces (Streeck, 2005). State actors reformed labor laws that once protected workers to now serve employers, leading to contract flexibilization, individualization of remuneration, fragmentation of working hours, and relaxation of dismissal law (Baccaro and Howell, 2017; Nagelkerke and Wilthagen, 2000). Existing research shows that social pacts concluded between organized employers and employees often contributed to these transformations (Woldendorp, 2005).
This reorganization of the political economy and in its wake the labor market is intimately connected to the ideological shift from Keynesian welfare state thinking to neoliberal beliefs (Biebricher, 2019). The new right successfully introduced a number of ideas in the 1970s and 1980s: the economy was not competitive enough, the quality of the production process was too low and citizens and employees suffered from a lack of entrepreneurship, autonomy, and self-motivation to name a few (Miller and Rose, 1995). The ideological construction of “the new employee” as an enterprising individual and the conviction that an introduction of free-market forces in more spheres of life would not only solve the economic crises but would also lead to a more egalitarian, democratic, and free society resonated widely (Boltanski and Chiapello, 2005; Miller and Rose, 1995).
Mudge (2018) convincingly shows that Western social democratic parties played a pivotal role in this transformation by adopting a neo-liberalized leftism in the 1990s. Research on the Dutch social democratic party (Labour Party, PvdA) shows that a similar ideological transformation has taken place here as well (Hellema and Lith, 2020; Oudenampsen, 2016). These parties’ recognition of the importance of competition and free-market forces as a means of organizing societal and economic relations, and their keen focus on moral issues rooted in the conviction that “old” social democratic values and ideas, no longer met the demands of modern times were seen as the electoral answer to the successful restructuring of political economies (Crouch, 2001; Giddens, 1998; Mudge, 2018).
Trade unions were in many ways confronted with similar questions as social democratic parties, their “Siamese twin” (Ebbinghaus, 1995; Upchurch and Taylor, 2016): a decrease of political and popular support for power-sharing with interest groups; employers who increasingly engaged in activism to realize their interests; the shrinking importance of the industrial sector while it was precisely here that the trade union movement was strongest, and the financialization of the economy that questioned how necessary workers, in the global north, still were in capitalist money-making.
How did unions respond? There seem to be two dominant views in the literature. The dualization literature argues that trade unions were willing to compromise their interests for strategic reasons (Emmenegger et al., 2012). It argues that unions concluded social pacts that contributed to the deregulation of labor markets and decentralization of collective bargaining to protect their traditional male membership of full-time manufacturing and public sector employees at the expense of other workers (Ebbinghaus, 2007; Lindbeck and Snower, 1986; Thelen, 2014).
The power resources tradition, on the other hand, argued that although trade unions kept beating the same drum for decades, they became less successful because of the erosion of union power due to the decline in union membership, changes in the labor force composition, and the industrial organization of most capitalist democracies (Baccaro and Howell, 2017; Gumbrell-McCormick and Hyman, 2013; Streeck, 2005). In the Dutch literature, this explanation is present as well: “Within this context [the transformation from Fordist to post-Fordist labor market, decline in union density and weakened authority of peak employers’ organizations over their constituencies] it is ultimately the preferences of employers and the increasing degree to which they can realize them […], that have shaped the changes in the labor market” (De Beer and Keune, 2018: 249).
This paper attempts to contribute to this debate on the liberalization of labor markets by adding a longitudinal analysis of the ideational development of the trade union movement as an explanatory element. The question that is central to the research is whether, and if so how, the ideational foundations and the interests pursued by the labor movement changed in the last decades. Linking interests in collective bargaining to the ideational development of the labor movement can shed light on the driving forces behind the changes in the labor market in the last decades.
The research question is answered via a case study of the Dutch trade union federation FNV. A longitudinal ideational content analysis was carried out to identify change or stability in the ideas and interests concerning wages and employment in the Federation's policy documents that are used for collective bargaining and were issued between 1977 and 2021.
The remainder of this paper is organized as follows. Sections 1 and 2 describe the theoretical framework and the methodology. Section 3 reports the results, followed by a discussion (Section 4) and the conclusions and limitations (Section 5).
Ideational institutionalism
Scholars often explain institutional change or stability by exogenous shocks or critical junctures, path-dependence, equilibria, and changes in power-relations (McLaughlin and Wright, 2018; Schmidt, 2008). Often these theories are built upon the notion of pre-supposed, fixed interests derived from a clear and knowable economic position (Béland and Cox, 2011; Blyth, 2002). If the objective material position of trade unions, in this case, is altered because of changes in its membership-base for instance, then the pursued interests and ideas about the world change accordingly. These approaches can explain effects on actors and outcomes, but are also constrained by a limited number of possible explanations (McLaughlin and Wright, 2018).
The ideational approach that is used here does not use a pre-supposed economic theory that guides the analysis of – in this case – the interests of the Dutch trade union movement (Blyth, 2002: ix; Hall, 1997: 178). It is understood that there is no “right” way of pursuing one's interests, but that the road taken by an actor is also a matter of power, ideology, and fortuities such as personalities (Hendriks, 2011). Hence, novel ideas will only be adopted by actors if they are made relevant by and for the actor (Morgan and Hauptmeier, 2021: 3).
This means that ideas precede interest formation and therefore that unions choose their strategies in response to their interpretation of the world around them, and it is precisely in these interpretations that ideas shape interests (Blyth, 2002; Hay, 2002; Schmidt, 2008). After all, how can one act without any prior ideas about the situation one is in?
Ideas are conceptualized as beliefs or interpretations of the outside world and are used by trade unions to make sense of the world (Blyth, 2002). Interests are operationalized as “wants’: the material desires that actors pursue in response to their beliefs about the world (Steinmo, 2003).
In this article, the analytical question is whether the FNV changed its ideas about employment and wages, and how this influenced the interests it pursued. This offers an additional explanation for the liberalization of the labor market. Additionally, the question of why the Federation changed its ideological stance will be touched upon in the discussion section.
As the ideational approach to interest formation grants transformative powers to ideas, it is necessary to understand under which conditions ideas and ideologies change and become part of the discourse. Here Blyth (2002) and Steinmo (2003) are followed. Blyth argues that external shocks, like the oil crises of the 1970s or the financial crisis of the 2000s, allow for new ideas to emerge and force a paradigm shift because the possible effects of actions driven by pre-crisis interests are no longer known. If the new alternative narratives and solutions lead to collective action, institutional alignment will follow. Ideas can then function as: institutional blueprints if they succeed in organizing collective action and persuading actors of their interpretation of the issues and their proposed solutions; as weapons if they delegitimize the policy of the institution that needs replacing or reformation; and as cognitive locks, if they effectively limit the potential outcomes of policy processes or political struggle to only their own terms. Finally, when these ideas are embedded in new institutions, they coordinate expectations and make institutional stability possible.
Steinmo (2003) proposes a dynamic process of slow change, in which the experiences of actors and the institutionalization of practices in one period form the foundation of new policy ideas in the next. New ideas can gain prominence because others are “discredited by experience” (p.229), new opportunities and contexts for innovation are emerging, and the balance of power is changing, creating new potential for ideas to be put forward. New ideas and consequently interests as well, as they are interdependent variables, lead to institutional change in an evolutionary process that is contingent and open-ended.
Methods
The Dutch trade union federation FNV is the case study at hand. It is ideally suited for studying changing ideas to increase our understanding of the liberalized labor market. The Netherlands is often characterized as a stable and robust neo-corporatist country. Several arguments are used to back this claim: the legal framework organizing collective bargaining and the extension of collective agreements have remained intact; collective bargaining coverage is still high; and social pacts are still concluded regularly (De Beer and Van der Meer, 2020; Visser, 2012). So social partners have not changed their institutional behavior within the institutions considerably. Nevertheless, distinct liberal features were added to the coordinated market economy The Netherlands once was (Touwen, 2008): flexibilization of contracts, working hours and remuneration, a retrenched and activating welfare state, and moderated labor costs since the early 1980s (De Beer and Keune, 2018; Nagelkerke and Wilthagen, 2000). We know that organized employers have been consistent during collective bargaining in their pursuit of deregulation, decentralization, flexibilization, and wage moderation over the past decades (Boumans, 2021). A reasonable assumption, therefore, is that since the FNV did not change its institutional behavior, i.e., it kept concluding social pacts and collective agreements, it continued to achieve its objectives. One explanation is that these objectives, its interests, changed over the last decades. This will be explored in this case study.
The primary sources used to assess changes in the ideational thinking of the Federation and shifts in its pursuit of interests are the collective bargaining documents (“agenda”) the FNV issued between 1976 and 2021 (1980 and 1993 are missing). These documents instruct union officials on collective bargaining: they stipulate objectives, ideas, and proposals on terms of employment and include an assessment of the labor market, and are therefore well suited to assess changes in the FNV's ideational thinking and the interests it wants to achieve in collective agreements.
The longitudinal policy analysis focusses on two core themes in trade union collective bargaining: wages and employment. Ideas, i.e., FNV's interpretations of the outside world, and its interests were identified during a two-stage coding process. During the first round of coding, a coding scheme was developed by identifying sub-themes, words, and phrases used for both themes. During the second detailed phase, all documents were re-coded according to the coding scheme. MAXQDA was used for this process.
Ideas and interests on both themes were put on a timeline and compared to the indicators of change described below to determine their ideological status and identify changes or continuity over time and across themes.
Over time and within different theoretical approaches, the role wages and employment are attributed in the labor market have changed. Three approaches were used as indicators of change: Keynesian welfarism, Third Way thinking, and post-Keynesianism.
First, Keynesian-welfarism assumes the importance of wage-led growth, a solidaristic and collective understanding of the welfare state, full employment policies to stimulate aggregate demand, and the social and political integration of workers via the expansion of social rights and the recognition of collective representation. Wages are mainly considered as income, and are the basis of economic growth via consumption and effective demand. But in order to realize full employment and to maintain the welfare state, wage moderation is a central instrument of Keynesian economic policy as well (Crouch, 2001; Upchurch and Taylor, 2016). As such, wage moderation has been a central motive of economic policy in The Netherlands since 1945 (Albeda, 1987).
Second, in the 1990s and especially influential in social-democratic circles actors like the Clinton and Gore and their New Democrats faction in the Democratic Party, Blair and Schröder (1998), and Giddens (1998), tried to merge right-wing liberalism and social democracy by holding on to a right to work and minimum social standards on the one hand with supply-side solutions like deregulation, vocational education and training, skill development and activating labor market policies to solve rigidities and stimulate individual workers to cash in on their employability on the other. Wages are seen as both income and an instrument of competition and activation. These changes are here referred to as Third Way social democracy (Giddens, 1998) or liberalized leftism (Mudge, 2018).
More recently, and third, Upchurch and Taylor (2016), Piketty (2020) and Stockhammer and Onaran (2012) among others, made a case for less market, more protective measures for labor, rebuilding the welfare state, a fair labor market with decent jobs and likewise wages, referred to sometimes as post-Keynesianism or neo-Keynesianism. Normative arguments and discourses entered the public arena again depicting a fair society, economic justice, and social equality.
Results: FNV's collective bargaining policy
The analysis of the FNV-documents reveals four distinct but intertwined periods of ideas and interests concerning wages and employment.
1977–1991: (No longer) a story of its own
Full-employment and a solidaristic and extensive social welfare state were the main battlefields during the long 1980s. Three interests stood at the center: (1) fair distribution of national income, (2) preservation of the social welfare state, and (3) the right to work (less) for everyone. The ideational foundation of FNV's collective bargaining policy was the understanding that economic growth had to be consumption-led and that the market needed interventions to shield labor.
Employment. Soaring unemployment plagued the labor market in the late 1970s, and both employers and politicians called upon the labor movement to moderate wages to restore private profitability and thereby preserve employment (Albeda, 1987). The emblematic event of this period is a social pact called the Wassenaar Agreement (1982). It is often depicted as the turning point in the Dutch political economy; then the labor movement agreed to wage restraint, resulting in an employment miracle and spectacular economic growth in the 1990s (Scharpf, 2000; Visser and Hemerijck, 1997).
An analysis of the collective bargaining documents of the FNV makes clear though that already in the years before the Wassenaar Agreement the FNV was prepared to agree to wage moderation – not especially surprising as the government had ordered wage measures in 1971, 1974, and 1976 (and would do so in 1980, 1981, and 1982 as well).
In return, the Federation wanted to have a say in companies’ investment policies (FNV, 1976). The main idea behind its desire to have a say over companies’ investment policies was the notion that wage moderation would only have a stimulating effect if the realized returns were to be invested productively. From 1977, the FNV aimed to conclude job contracts that regulated workers’ voice-over investment policies (FNV, 1976). Employers fiercely opposed the proposal because it stretched the post-war compromise on managerial prerogative.
From 1976 onwards, non-governmental think tanks and organized employers began speaking out against demand-side economic policies and promoting supply-side economics (Oudenampsen and Mellink, 2021). Additionally, the government changed colors, from social-democratic to center-right, as well. The opposition of the Federation to the government's crisis policy was articulated: “The FNV rejects both the societal vision and the concrete policy intentions of the government. This means that the FNV will have to achieve its objectives on its own.” (FNV, 1979). But it did not succeed in concluding many job contracts.
In 1979, the Federation shifted its focus to the collective redistribution of jobs (FNV, 1978). The ideational change was that workers themselves would solve the crisis via the collective redistribution of working hours and wages instead of via increased returns. The supporting idea was that shortening the workweek would liberate workers, decrease unemployment and increase economic equality: “…employment can only be redistributed if at the same time existing income is also redistributed, in other words, a shift from wages to leisure time” (FNV, 1980).
Wages. FNV's wage policy was characterized by its desire to realize a just society with a fair distribution of income among the working class: “We cannot pretend that nothing is wrong. [W]e must keep in mind that we can only spend each guilder once: to finance an increase in worker purchasing power or to finance collective and social provisions” (FNV, 1976).
The FNV's main wage policy instruments are the bargaining margin and its annual wage demand. The bargaining margin consists of the percentage change of inflation plus productivity, and the wage demand takes up a share of this margin. In the 1960s, most collective agreements included an automatic price index (API), leaving the union to negotiate only about realized productivity growth. In the 1970s, employers increasingly turned against the API, supported by the government as social benefits and public-sector wages were linked to private-sector wage growth.
In these years, the union did not change its formula to calculate its annual wage demand: “The FNV finds it justified that labor costs (including an increase in social security contributions, the costs of working time reduction, etc.) will increase with price compensation plus productivity.” (FNV, 1982). Its wage policy is then still inspired by the Keynesian idea that aggregate consumption should not be depressed and that financial resources for investments are needed as well: “The bottleneck…is the insufficient volume of investment, which is too low relative to consumer spending. At the same time, we must strive to maintain total consumption expenditures as much as possible. …In the absence of economic growth…the existing income must be distributed among more people. And that, of course, has consequences for individual spending possibilities.” (FNV, 1982).
The FNV had three solutions to its dilemma regarding maintaining consumption levels and freeing up funds for investments: first, the FNV moderated its wage demand, specifically by not factoring in higher employer contributions and taxes as a way to free up money to fund the welfare state; second, it tried to spare lower-income workers and realize income leveling by raising lower pay scales, especially in well-performing industries, and third and already discussed above, it opted for a redistribution of wages (FNV, 1977; 1980; 1981; 1984; 1985; 1987).
After several failed social pacts, in 1982 the FNV managed to consolidate its demands in the Wassenaar Agreement: a labor-cost neutral redistribution of working time financed by using the API. The bipartite agreement also included the appeal to the government to stay out of wage policy and the common understanding that full employment was out of reach.
While the Wassenaar Agreement is not the start of wage moderation, it did change two things in the ideational thinking and practice of the FNV. First, the Federation completely discontinued the profit-wage discussion and accepted that stimulating the private market was necessary for economic growth (AWV, 1982) and thus accepted that the employment crisis was paid by workers via collective redistribution of work and income. Note though that the FNV made a distinction between increasing corporate profitability and accepting the necessity of stimulating the private sector: “[c]ontrary to some interpretations, business profitability is not the primary objective of the…Agreement” (FNV, 1983). And: “[c]ontrolled wage cost movements remain important for combating unemployment and paying for the welfare state. …there is no reason…to further improve the financial position of companies” (FNV, 1986).
Second, the FNV turned to individual redistribution of working time, such as more holiday and care leave and regulated part-time work instead of focusing on collective solutions (FNV, 1987, 1989). Part-time work came to be seen as an attractive way to increase the (female) labor participation rate and facilitate “a different life pattern” (FNV, 1980). The FNV's ideational narrative gradually changes in this period from a clear, distinctive one to ideas and solutions that coincide more with the ones of the government and organized employers.
1992–2000: international competitiveness and individual self-reliance
The flexibilization of the labor market and the reworking of the welfare state picks up speed in the 1990s. Social benefits are decreased, pensions cut, and public sector and minimum wages are frozen after being nominally decreased in the 1980s. Labor market regulations are loosened, sometimes with the cooperation of the Federation (restructuring of temporary work, 1998) and sometimes against its will (flexibilization of working time, 1995).
Two ideas enter FNV's thinking on wages and work. The first ideational change is that work becomes an individual endeavor to realize economic independence, and the second is that wages are primarily understood as a price within a framework of export-led growth. Its main interest in this period is increasing labor participation. At the same time, FNV continued to juggle a multitude of social objectives, all to be financed from the bargaining margin: regulation of part-time work; top-up benefits to smooth the retrenchment of social security; VET; and an increase in leave entitlements.
Employment. As in the previous period, employment was a spearhead of the FNV's collective bargaining policy, with the difference that it changed the value attached to work: “The FNV believes that it is of the utmost importance for people to be economically independent. In principle, this should be derived from paid work” (FNV, 1993), because “[e]conomic independence allows people to be self-sufficient” (FNV, 1994).
Work became the new social security, and it was individual. For example, the FNV introduced the notion of “job security,” defined as “training agreements…age-conscious personnel policy, performance interviews and/or career guidance” (FNV, 1997). Security, then, did not refer to legal safeguards, like protection from dismissal or a replacement income, but to an individually crafted potential market value within a competitive framework.
This ideational reinterpretation had consequences for the interests the FNV pursued in its employment policy. Increasing labor participation via redistribution policies replaced fighting unemployment as its core objective: “The labor participation rate must increase. There must be fully-fledged jobs for as many people as possible” (FNV, 1998). The focus was on getting more young people, elderly workers, ethnic minorities, low-educated workers, and women to participate in the labor market via the well-known solution of redistribution; stimulating part-time work, expanding leave entitlements, and collective working hour reductions, but also via lowering wages as stepping stones, creating new low-wage work by splitting functions, and flexibilization of working hours (FNV, 1993, 1994, 1995, 1998, 1999). In its 1995 document, it writes for example: “Task splitting can be used to create low-skilled positions. The FNV sees these jobs as temporary, starting positions …The space between the [legal] minimum wage and the lowest collective bargaining scales can be used to create these entry-level positions.” FNV's thinking on employment and work echoes that of the European Union in the 1990s (Goetschy, 1999).
It is worth noting the absence of demand-side employment policies in which the state and employers play a role through investment, hiring and industrial policy, and so on. Employment creation was a matter primarily for labor itself and fully funded by wage redistribution, as agreed upon in the previous period.
Flexibilization of labor became an increasingly prominent theme in this period. The Federation tried to find a middle ground between employers’ desire for flexibility in the face of increased international competition and its belief that workers wanted to have more possibilities to combine work and care, but without sacrificing rights. At the same time, it also noted that the shorter working week had led to more flexible contracts (FNV, 1989). It began promoting internal flexibility (FNV, 1995, 1997) as an alternative to external flexibility and the replacement of “unacceptable forms of flexibilization” by milder, more secure flexible contracts (FNV, 1995, 1997, 1998). Especially, regulation of flex work via collective agreements was seen as a solution “to reduce uncertainty about the volume of work demanded (per day, week, or month), and to improve the legal status (pay, dismissal protection, social security, and so on)” (FNV, 1997).
Wages. The FNV had previously agreed to wage moderation mainly to preserve the welfare state. In Wassenaar, it agreed to use the automatic price indexation that was part of many collective agreements to finance a labor-cost neutral reduction of the contractual working week. With the welfare state gradually being dismantled, and the union's employment policy redirected towards increasing labor participation, it became increasingly difficult to underpin its wage policy with claims of solidarity.
Wages were now seen primarily as the price of labor, and not so much as income. In the 1990s, the preservation of the welfare state was mostly absent from the FNV's policy discourse and motivation. What remained was its commitment to employment creation through wage restraint. But it increasingly used the same ideas about the necessity of wage restraint to remain internationally competitive and preserve employment as employers: “Competitiveness is improving because wage costs per unit of product in Dutch industry lag far behind its competitors. The controlled development of labor costs is an important driver” (FNV, 1993) and proudly mentioned: “The favorable economic trend was largely stimulated by FNV's policy. The responsible development of labor costs helped boost international competitiveness and create new jobs” (FNV, 1998).
When the economy boomed in 2000, the union warned against “excessive” wage increases: “The tighter the labor market, the greater the risk that the results of nearly twenty years of responsible labor cost development, shorter working hours, and employment policy will be wiped out by a trend in the opposite direction: excessive wage increases and longer working weeks. This could jeopardize employment growth in the medium term” (FNV, 2000).
The FNV's changed understanding of the role of wages in the economy was not sudden. In the late 1980s, union officials were allowed to take industry or company profitability into account during wage negotiations (FNV, 1986, 1987). But in the early 1990s, their new conception of wage became more prominent. In 1992, the formula determining the bargaining margin was adjusted downwards and again in 1995. In that year, the FNV introduced a “maximum wage demand” as well; union officials were not allowed to agree to contract wage increases above a pre-determined maximum percentage. The FNV would adhere to the maximum wage demand until 2015. These changes deeply engrained wage restraint in the collective bargaining practice of the FNV.
There is considerable ambiguity in the union's wage policy in this period. The focus on increasing labor participation led for instance to a policy of stimulating low-wage work by introducing new and extending existing low-wage scales and encouraging the activation of unused low-wage scales to solve the “problem concerning the employment of lower-skilled workers.” And even though the objective was to maintain the purchasing power of contract wages, the FNV also applied an inflation figure that excluded indirect taxes and incidentally allowed for the option of “deviating negatively” from this objective (FNV, 1993, 1994, 1995). A third example concerns the maximum wage demand. It was not just seen as an effective employment instrument, but also as a way to facilitate decentralization while maintaining a fair distribution of income: “[d]ifferentiations… may sometimes be necessary…. Too much differentiation, however, ultimately makes it harder to pursue an effective employment policy” (FNV, 1997, 1999). Capping the percentage that could be spent on wages increased the remaining bargaining margin, which could then be used to finance employment creation and extra-statutory benefits to cushion social welfare cuts, raise the lowest pay scales, repair pension cuts, improve leave entitlements or promote VET – depending on members’ needs and desires and the companies and industries concerned (FNV, 1994). At the same time, the union opened the door to “result-dependent remuneration, such as profit-sharing schemes” in profitable industries, therewith individualizing remuneration and increasing differences (FNV, 1994, 1997).
2001–2014: something is wrong?
The FNV's collective bargaining policy developed along two lines in this period. On one side, the idea that work is an individual endeavor from the previous period evolved into the notion that work is an asset. Simultaneously, the FNV began to address growing economic inequality and insecurity caused by excessive flexibilization of the labor market and the unfair distribution of income. The economic crisis of 2008 accelerates the slowly growing discomfort about economic injustice, but only in 2015, the FNV will stop its policy of wage moderation.
Employment. The FNV first redefined work from a necessary inevitability requiring proper regulation and remuneration to an individual endeavor that allows economic independence, and then – in this period – to an activity that adds meaning to life and is a personal necessity and asset. One could say that the FNV rewrote the foundational idea of the right to work to the obligation to work: “In a society based on solidarity, as many people as possible must be able to have paid jobs. Paid work is the glue of society. It enables people to be economically independent and to make a meaningful contribution to society” (FNV, 2005). Increasing labor participation via VET, career guidance and more options for combining work and care through increased leave entitlements were still its main policy instruments.
Additionally, the idea took hold that employees actively wanted to craft their careers and lives: “The FNV wants people to be able to make their own choices in work and wants to support them in doing so” (FNV, 2005). The FNV “explicitly chooses to respond to the wishes and desires of the individual employee. This means that [employees] play an active, directing and guiding role in…this process of individualization” (FNV, 2000). It does so by claiming the right to VET, increased leave entitlements, available, and free career guidance, well-facilitated job changes, and a stronger voice regarding working hours and other terms of employment.
Another consequence of this way of thinking was that the FNV expected employees to take up responsibility for their own market value within an ideational framework of individual worker voice and emancipation. Notions like employability (1999–2009), employees as “an attractive and strong party” (2002), “resilience” (2004), “shared responsibility” (1999–2004), “employees’ own responsibility” (2004) (FNVc, 2007; FNV, 2008) entered the policy discourse.
The FNV's support for self-employment in this period stems from this understanding of work as an asset and a means of self-realization: self-employment is the activity par excellence that makes work a self-chosen way of life. The Federation advocated for expanded access to tax benefits, the removal of restrictions in labor contracts on ancillary activities, the inclusion of self-employment in company career policies, and a self-employment start-up bonus for redundant employees (FNV, 2003, 2004, 2007, FNVc, FNVd). Like the decade before with non-standard work contracts, the Federation simultaneously advocated for sheltering regulation for the self-employed: minimum tariffs for self-employed workers in collective agreements, regulation of intermediary agencies, better access to pension funds, occupational disability and health insurance (FNV, 2002, 2003, FNVc, FNVd).
But the financial crisis of 2008 changed the FNVs point of view. It began to address bogus self-employment, described employees as in need of protection against the arbitrariness of employers, and started to focus more on insecurities caused by excessive flexibility (FNV, 2008, 2009, 2010, 2011, 2012, 2013).
Wages. The FNV had maintained its wage moderation policy during the economic boom at the turn of the century, warning that “labor costs have risen more sharply in recent years here than in neighboring countries. This can affect our competitiveness …The recent economic prosperity was partly the result of the FNV's collective bargaining policy and its responsible labor cost development… We continue this successful policy” (FNV, 2001). It is the same analysis the FNV employed in the 1990s.
But something changed as well in this period. The FNV began to emphasize that “employees need to share in economic growth” and that “[t]heir income should grow along with the improved economy.” (FNV, 2001). This change – the first crack in its wage moderation policy – was reinforced by the fact that angry members managed to raise the wage demand for 2000 against the will of the FNV leadership. This would happen again in 2007.
The continuation of wage restraint and the emerging notion of economic inequality led to unconvincing prose struggling to reconcile both: “The FNV…wants responsible labor cost developments. On one hand, this means keeping pace with foreign competitors and being considerate of the possibilities of companies and sectors. But the responsible labor cost developments must also include fair remuneration for employees. Both objectives must be given their due value” (FNV, 2002).
In 2004, the second crack in FNV's wage moderation policy becomes visible. Then, the union managed to organize the largest demonstration since WWII, and its policy document breathes self-confidence: “The foundation under the consultation model, in which parties jointly seek opportunities and tools to create and retain jobs, ensure prosperity, and safeguard the sustainability of the economy, has been undermined in recent months.” […] “The FNV will therefore realize its policy on its own merits at the collective bargaining table and will not shy away from confrontation…” (FNV, 2004).
Ideas and analyses concerning the economic divide between the haves and have-nots, job and income insecurity, continuous austerity, uncontrolled market forces, bureaucracy, and self-enrichment of top managers (re)surfaced in the years that follow – still combined with policy objectives based on individualization of rights and increasing labor participation.
The third crack in FNV's wage restraint policy becomes visible in 2008 in response to the financial crisis. The framework of competitiveness was questioned: “The eurozone is in dire straits, but both the Netherlands and Germany are ‘surplus countries’. They should cut back less and spend more in the interests of their own economies and the rest of the eurozone,” and: “The wage share is still below 80 percent…and may become slightly higher” (FNV, 2011). The FNV hit the government hard; its austerity policy was “economically unsound” and would “exacerbate the crisis” because the biggest problem was declining consumption, caused by “low consumer confidence, problems in the housing market, rising unemployment, wage restraint and, above all, tax increases” (FNV, 2012). Wage leveling via “a combination of a wage demand in percentages and a contribution in euros” (FNV, 2011) was seen as a viable solution.
Despite all these ideational changes, it kept propagating wage moderation during the whole period.
2015–2021: on the offensive
The FNV abandons in this fourth and last period its non-confrontational style of trade unionism. Dutch trade unions went on strike in 2017 like they had not done since 1989, and again in 2018. In 2019, collective agreements had the highest contractual wage development in ten years, although still only 0.1% above inflation. In response to a continuously falling density rate, that is now well below 20%, the FNV adopted more offensive strategies, like organizing.
Its collective bargaining policy becomes more coherent again: it stopped its wage moderation policy because it argued for higher wages from a wage-led growth perspective and asserted for a re-collectivization of rights to increase job security based on the understanding of power imbalances between employers and workers. More equity between labor and capital, a fair labor market, and social justice for all are the interests it pursued.
Employment. The main idea of FNV's employment policy in this period was that the massive amount of precarious labor – both in terms of contract duration and workable hours – led to an increase in income inequality, an individual and collective sense of insecurity and stress, and increased work pressure. The first and foremost objective was the reduction of the use of precarious labor contracts and the second was employment creation via public investments.
The FNV abandoned its focus on improving personal skills and knowledge development and saw employment creation again as a macro-economic issue: “We want measures that create jobs, distribute work more fairly, and improve the allocation of the labor market. Investments must be made in healthcare, education, and, for example, the construction sector. …we need to stimulate a fair distribution of jobs between generations and invest in the quality of work as well.” (FNV, 2015). The union had by now – reminiscent of the late 1970s – dusted off demand-side proposals and addressed the government, but contrary to the 1970s, did not appeal to employers. The redistribution of jobs through “generation pacts” for instance was largely financed by having present and future employees relinquish holidays, age-related premiums, and because of age-related differences in actual labor costs.
The policy objective of increasing labor participation, which led to individualized terms of employment, the promotion of self-employment and other supply-side instruments, was replaced by the notion of re-collectivization of rights to increase security, and the necessity of organization. The FNV still argued for increased worker's voice over working hours, but contrary to the previous two periods, it no longer linked this to self-realization and employability but rather to precarity and the preservation of private life: “Every day, the FNV proves that we can make the world a little better if workers organize themselves and work together with employers and politics” (FNV, 2020).
Wages. The Keynesian idea that wages are a necessary prerequisite to stimulate economic growth via consumption resurfaced again in the course of 2000s and became more explicit in this period: “The equal society is under pressure as people with low and middle incomes have less and less to spend. …A strong economy benefits from purchasing power. Think about it: as soon as people buy more, stores need more staff, transport increases and so does the demand for drivers. Production picks up, requiring more workers, which in turn increases investment, which also creates new jobs.” (FNV, 2015). The notion that raising wages would stimulate the economy is a classic Keynesian demand-management argument.
In practical terms, this meant that the FNV ceased using the wage formula to calculate the bargaining margin and abandoned the maximum wage demand in 2015; the wage demands the Federation put forward were above the sum of productivity and inflation. In 2017 and 2018, the FNV had a de facto minimum wage demand, and between 2013 and 2021 (except 2017) it included a minimum nominal amount raising the lowest wages alongside the percentage increase.
The FNV also became increasingly outspoken about executive incomes and economic inequality: “The exorbitant remuneration at the top must be tackled to reduce income discrepancies” (FNV, 2015) and “The Netherlands is a prosperous country. …However, when we look at who benefits, a fair balance between employers and employees is too often lacking. While worker wages lag, Shell's CEO enjoyed a 126 percent raise” (FNV, 2020).
The FNV tried to reconcile its efforts to decrease precarious work, which was now the preferred characterization of flexible work, with its desire to negotiate contract wage increases. The idea developed in its 2014 campaign “Purchasing power and real jobs” was that precarious work not only depressed the relevant worker's wages but pushed the entire wage structure downwards. Therefore, all workers gained by campaigning against precarity. The FNV made the same argument for self-employed workers; it promoted minimum rates and the right to bargain for self-employed workers both as their representative and based on the conviction that their low rates put downward pressure on wages (FNV, 2014; 2015; 2018).
Discussion
The analysis of FNV's collective bargaining policy between 1977 and 2021 indicates that its ideas about wages and employment and consequently the wants it pursued changed considerably. The four defined periods show a wave-like motion of change from Keynesian demand-side labor market policies and wage-led growth via Third Way-inspired supply-side policies within a framework of individualism, entrepreneurial spirit, and personal responsibilization back to (post-)Keynesian-inspired ideas about wage-led growth, but now with a focus on the reparation of the standard job contract instead of full employment.
Moreover, the analysis shows that FNV's ideational shift was not merely discursive and motivated by strategic considerations; the changes in the interests the FNV pursued represent a more fundamental ideological change. This also adds to the explanation why it took the FNV so long to reorient its ideas and interests from 2015 onwards to the new reality of the labor market that had become increasingly visible since 2000.
There are several explanations on how Dutch trade unions dealt with the demise of the post-war compromise in which the European union movement agreed to wage restraint to finance economic growth in exchange for high social wages and protected employment relations (Hyman, 2001; Streeck, 2005). The Wassenaar Agreement is often regarded as the turning point in Dutch industrial relations; then the labor movement surrendered as a result of a process of social learning and agreed to wage restraint, which continues to this day. This has resulted in an employment miracle and the return of consensual decision-making in neo-corporatist institutions (De Beer, 2013; Scharpf, 2000; Visser and Hemerijck, 1997).
Several other scholars pointed out weaknesses in this analysis, especially concerning the disappointing employment growth (Becker, 2001; Giddens, 1998; Salverda, 1999), but also concerning the cooperative role of the labor movement. Becker (2001) argues that trade unions did resist this governmental and employer supported supply-side approach throughout the 1980s, and states that trade unions subjected themselves retroactively to the pro-market policies leading to conflict-avoiding consensualism after the mid-1990s when the job miracle was (internationally) recognized, and they too could present themselves as winners. Oudenampsen and Mellink (2021) built on Wolinetz (1989) who shows that the neo-corporatist structures were largely excluded from political decision-making in the 1980s, and argue that The Netherlands is an example of a “depoliticized model of institutional change”; the paradigmatic shift from a demand-side macro-economic policy to supply-side thinking was advanced within governmental circles by high-ranking policy advisers.
This article wants to add to these explanations. It is argued that the FNV changed its interests in response to the ideational readjustments in the broader social democratic family after a period of ideological insecurity in the 1970s and 1980s. The market-oriented ideas on labor, wages, and the economy that became mainstream in the 1980s, were legitimized by Third Way ideology and as such enabled the FNV to continue its cooperation in neo-corporatist institutions. While I do not think that Wassenaar is the watershed that Hemerijck and Visser, and others make it out to be, it has provided an interpretative framework through which the FNV slowly redefined its interests, to find a firm base under its feet again only in the early 1990s. Only when you consider this evolution of ideas and the resulting changed interests of the FNV you are able to explain the extent and depth of the transformations in the labor market in the 1990s and early 2000s.
This explanation fills in a void in Oudenampsen and Mellink's analysis. Their model of depoliticized institutional change does not explain why the FNV gradually stopped propagating its agenda of wage-led growth and a solidaristic and collective understanding of the welfare state as “last man standing.”
This explanation also offers a more accurate timeline than Becker, whose turning point is in the late 1990s. In this article, 1992 is pinpointed as the beginning of the second phase of ideational change. This coincides with the rise of liberalized leftism.
Blyth asserts that external shocks allow for new ideas to emerge and force a paradigm shift because the possible effects of actions driven by pre-crisis interests are no longer known. Ideas fill this void and help actors deal with the surrounding uncertainty, open up new solutions, and in the end, build new institutions and coalitions (2002:36–39).
In the second half of the 1970s, a sense of insecurity will not have been alien to the Federation. The pro-labor left-wing prime minister that governed from 1973 was replaced by a Christen Democrat in 1977 and by a self-proclaimed fan of Reagan and Thatcher in 1982. While organized employers welcomed the ideological turn (Boumans, 2021), for the labor movement the situation was more complex. The soaring unemployment, the increasing deficit, sharply rising inflation, and the start of delocalization of industry complicated the use of traditional methods like strikes. At the same time, the Keynesian response to the wage-price spiral felt inadequate (Becker, 2001). Furthermore, policy elites pushed successfully for supply-side solutions (Oudenampsen and Mellink, 2021) and the already weak Keynesian consensus deteriorates.
This is visible in the ideological development of the FNV. While in the late 1970s and early 1980s, the FNV tried to hold on to its Keynesian ideas of a fair distribution of income and full-employment financed via wage moderation, it also integrated the idea of the necessity of a strong private sector as a precondition for economic growth. This understanding was not present in its policy documents before 1982.
In the Wassenaar Agreement of 1982, both Keynesian and pro-market ideas came together: the acknowledgment that the restoration of the private sector was necessary to realize economic growth plus the redistribution of working hours with the consequential wage redistribution as a solution for the employment crisis. One could say that the acceptance of the private sector as the engine of growth on the part of the FNV and the acceptance of organized employers that the employment crisis had to be solved (Boumans, 2021; Hendriks, 2011) functioned as an institutional blueprint, i.e., an interpretative framework that reduced uncertainty and conveyed a common solution to a common problem, the economic crisis (Blyth, 2002).
Throughout the 1980s, the FNV contests the restructuring of the welfare state and the labor market (De Beer and Keune, 2018; Oudenampsen and Mellink, 2021). However, in 1992, it adjusted its wage formula downward in response to continuing criticism. It is the start of the second period in which the FNV deepened its understanding of the economy and the role of labor within a framework of competitiveness and individualism. This embrace of liberal ideas that started in the early 1980s in response to deep insecurity was legitimized and made relevant for the FNV by the Third Way-turn of the social-democratic family in the early 1990s.
Without denying the complex relationship between the Dutch social democratic party and the Federation (Otjes, 2016), the similarities in ideas and the moment they are put forward are striking, and also not unexpected given the overlap in personnel, elected officers, and members.
Examples of ideational similarities include the focus on economic independence via paid labor in the Labour Party (PvdA) and the FNV in the late 1980s, and the way it became tied to the reorganization of social security in the 1990s (Hellema and Van Lith, 2020). In 1992, the PvdA published “Nobody aside” which argued for more “personal responsibility” within social security, more control mechanisms, and welfare-to-work policies (Hellema and Van Lith, 2020). In FNV's 1995 policy document, written in the second half of 1994 and the first full policy document after its multi-year plan of 1990–1993, the idea of activating labor market policies is mentioned and supported for the first time.
The extent to which the FNV followed Third Way thinking also becomes clear when we look at the reconceptualization of the objective of “equal pay for equal work.” In 1998, Blair and Schröder challenged the idea of equal pay for equal work by suggesting that it smelled of conformity and mediocrity. While if instead effort was rewarded, diversity and creativity could be celebrated. And in 1999 the FNV writes for the first time that differences in remuneration may be justified if there are differences in effort.
The last example concerns its policy of wage moderation. The FNV supported a policy of wage moderation in the 1980s as a classic Keynesian instrument to preserve the welfare state, jobs, and income solidarity during an unemployment crisis. In the 1990s wage moderation was legitimized as a necessity due to international competitiveness and employment creation – similar arguments are used by Blair and Schröder (1998) and the PvdA (1994; 1998). Wage moderation had become an institutionalized element in FNV's narrative: necessary, independent of the economic situation.
In the early 2000s, Third Way-thinking lost its grip on the FNV. Here, Steinmo's (2003) dynamic process of slow change offers a framework to understand the relatively sharp seizure in the interests pursued by the FNV in collective bargaining since 2015: previous ideas are brought into disrepute by experience, novel opportunities and contexts for ideational innovation emerge, and the balance of power changes.
Several factors contributed to FNV's dynamic process of slow change. The first two ties in with Steinmo's mechanism of the unpopularity of ideas through experience: the first is that from the early 2000s onwards, the enthusiasm of Third Way social democracy withered (Hellema and Van Lith, 2020). The PvdA suffered major electoral blows in this period and entered a deep crisis. Also, the promise of a fair labor market, populated by entrepreneurial and well-educated workers and fair, and sensible employers was not realized. Precariousness and income disparity were growing, and the FNV observes this as well in its policy documents. Since 2013, FNV's collective bargaining policy has been aimed at limiting the insecurity caused by precarious contracts.
Second, in response to the financial crisis of 2008, the political consensus on the necessity of wage moderation wanes. The policy of wage moderation turned out to be extremely successful: the real increase of contract wages was kept around 0% since 1979 (De Beer and Keune, 2018). From 2014, the low level of the wage share became the topic of a national debate. In response, different actors, among them, The National Bank and the Prime Minister, started to pressure trade unions and organized employers to increase wages (Boumans and Keune, 2018).
The third factor that contributed to the ideational change was that the internal balance of power changed. Growing members’ discontent on yet another concession on pensions led to a major crisis and the restructuring of the FNV in 2011 (De Beer, 2013). One of the consequences of the crisis and subsequent reorganization is that new people with different ideas are entering strategic policy and management positions where that was not possible before. As an example: in 2021, the FNV elected a President who is a well-known member of the Socialist Party, left of social democracy, while since 1928, an overwhelming majority of FNV Presidents were members of the social democratic party. Additionally, as a result of “organizing” that the FNV had adopted around 2009 as a revitalization strategy, often young, people inspired by its outspoken activist promise were drawn to the FNV. They also provided new ideas and practices.
These three factors created space for ideational innovation. New and old social democratic ideas that surfaced in public debate, spurred by publications like The Spirit Level of Wilkinson and Pickett in 2009 and Capital by Piketty in 2013, were integrated in FNV's policy. In 2014, it writes: “An equal society works better. A society in which the differences between the rich and the poor are not too far apart is more prosperous, people are happier, and business is more productive.” Moral arguments were emphasized again in its policy documents. For the 2022 collective bargaining round, it even revived the idea of automatic price indexation that was abolished in the 1980s as an instrument in collective agreements to increase wages.
Conclusions
The main aim of this article is to explore the role of the labor movement in the reconstruction of the labor market via a detailed case study of the ideological foundations of the Dutch trade union federation FNV and the interests it pursued. An ideational interpretation of the relationship between interests and ideas was used to analyze the collective bargaining policy documents the FNV issued between 1977 and 2021 on two themes: wages and employment.
While the role of the labor movement in the construction of the post-war welfare state is well-researched and mostly undisputed, its role in the deconstruction that took place in most industrialized countries since the 1980s is less clear. Dualization scholars argue that trade unions were willing to compromise their interests to defend their traditional full-time male members in manufacturing and the public sector at the expense of other workers (Ebbinghaus, 2007; Lindbeck and Snower, 1986; Thelen, 2014). The power resources tradition, on the other hand, argues that trade unions kept beating the same drum for decades, but became less successful due to changes in the power balance between capital and labor (Baccaro and Howell, 2017; Gumbrell-McCormick and Hyman, 2013; Streeck, 2005).
The ideational analysis of collective bargaining policy presented in this article adds a different explanation. It suggests both a willingness on the part of the FNV to integrate new groups into the labor market and to cooperate in regulating, and if you will, legitimizing, new employment contracts, and profound ideational changes in its collective bargaining policy resulting in the pursuance of different interests over time.
In the face of the falling density rate, the transformation of the Dutch economy to a service economy and the de-commodification of labor by the government, the Dutch FNV has not responded by merely holding on to its ideas and interests. In contrast, it has used the modernization of social democracy with its pro-market ideas and emphasis on self-actualization of individuals to connect with government policies and the agenda of organized employers. In the late 1980s, the FNV increasingly starts to see work as an individual endeavor to realize economic independence and wages as a price within a framework of export-led growth and as a result, the interests the FNV pursued in the 1990s and 2000s partially overlap those of organized employers and government. One could argue that as such, the FNV facilitated the liberalization of the Dutch labor market in these decades.
While The Netherlands and FNV are for several before-mentioned reasons ideally suited to illustrate my claims, future research may want to look into other countries and unions, operating in other contexts and different organizational structures. It may be particularly interesting to look into differences between member unions and the Federation-level. Now I have treated the FNV as one undivided actor as it is united by one board and democratic decision-making processes, but it is also known that there were differences of opinion among member unions and that some unions placed different emphases and used other arguments. A related suggestion for further research is that it might be interesting to compare negotiation commitments of trade union officials during collective agreement negotiations with national trade union policies to increase our understanding of differences in labor conditions between industries.
Sources
The documents were collected in the IISH-archives of the Foundation of Labor, employers’ organization AWV(N) and several trade unions, and from personal archives. The date of FNV documents refers to the production year; the objectives then apply to negotiations in the following year.
Footnotes
Acknowledgments
I thank Prof. Dr M. Keune and Dr D. Oude Nijhuis for their comments that greatly improved the manuscript.
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the Instituut Gak
