European labor ministers have agreed to bring millions of gig-economy workers into regulation.
Reforms, which still need to be approved by the European Parliament, would put the onus on platforms like Deliveroo and Uber to prove their workers are not employees.
Employees are eligible for minimum wage and sick pay, protected against summary dismissal and they qualify for pension and unemployment benefits. (more…)
Giorgia Meloni is cutting benefits for out-of-work Italians, reducing taxes for employers and making it easier to hire workers on a short-term contract.
Many of the reforms were in the prime minister’s election manifesto, but the reintroduction of job vouchers — a way to hire workers without a contract — is a surprise.
I’ll explain what’s changing, what isn’t — and why Italy’s labor market is such a mess. (more…)
Instead of making it easier for companies to hire workers on a permanent basis, the Dutch government is banning various types of temp work and making freelancers more expensive.
Labor minister Karien van Gennip argues:
Too many workers with a flexible contract or who are self-employed don’t have … security. At the same time, especially small business owners are reluctant to hire people on a permanent basis. This needs to change.
Yet she is doing little to reduce risks for entrepreneurs while taking abundant steps to give workers more “security”. (more…)
America could ban noncompete clauses by the end of this year. The Federal Trade Commission has proposed to void existing agreements and ban companies from including any in future contracts.
It’s a seemingly simple change that could have massive repercussions.
Economists suspect noncompetes are one reason middle-class wages have stagnated and productivity growth has stalled. At least one in five — 30 million — workers are bound by them.
Once limited to high-paid professionals with access to sensitive company information, noncompete clauses are now routinely inserted into contracts for even fast-food workers and hairstylists.
Paired with weak protections against dismissal, noncompetes give American employers too much power in labor relations. (more…)
President Joe Biden would make the same mistake as the Netherlands in regulating independent work.
In 2015, the European country required employers to put freelancers on an open-ended contract after two years of work.
In an attempt to bring more workers into regular employment, a coalition government of the center-left Labor Party and center-right liberals also made it costlier and more time-consuming for companies to fire employees, and it increased severance pay.
The reforms didn’t cause a shift from freelancing to salaried employment. They did destroy some 77,000 — mostly part-time — jobs in child care, hospitality, nursing and other industries, according to an analysis by ABN Amro bank.
After Labor lost the election in 2017, the liberals formed a government with center parties and repealed the reforms. They made it cheaper for companies to hire, and easier to fire, employees. Freelancers were allowed three contracts per employer every three years.
Employment rose. There are more Dutch people in work than ever before. Almost every industry, from construction to schools to the national railway, struggles to fill vacancies. (more…)
If coronavirus convinces more people our health-care systems need to be overhauled, it may be one of the few good outcomes of the pandemic.
In the UK, the government-owned National Health Service has long underperformed relative to its rich-country peers. I wrote here in January that the pandemic has underscored the need for reform. If you subscribe to the Financial Times, also read Camilla Cavendish’s story from April about the hundreds of babies who died in English maternity wards between 2000 and 2019 from lack of care. This in the world’s fifth-largest economy!
The Netherlands’ mixed public-private system is superior, but the country still has a shortage of nurses. It’s something I investigated for Wynia’s Week in December. What I found was that nursing associations, trade unions and researchers have been sounding the alarm for years, yet hospitals continue to underpay nurses and few give their workers the autonomy and flexibility they ask for. Probably because nursing was historically a part-time profession of unmarried women, and doctors and hospital administrators were historically older and male. That hierarchical culture (which I imagine exists in other countries as well) is hard to change, but it is slowly starting to. If you read Dutch, you can glean examples from my second story on the topic.
In America, excessive licensing requirements and regulations have kept health care understaffed. Pro-market think tanks like the Cato Institute and Niskanen Center have been trying to draw attention to this. Even Vox, hardly a bastion of libertarianism, acknowledges that American health care is, in some ways, overregulated. (more…)
The Netherlands is finally about to have a new government. Ten months after the elections, and three weeks after parties did a deal, Mark Rutte is due to present his fourth cabinet in a week.
I’m happy with many of the proposals in the coalition agreement, which I summarized here before Christmas; not surprising, since it’s a coalition of four centrist and center-right parties, led by my own (Rutte’s).
I am worried about their plans for the labor market, which would raise costs for employers and freelancers in order to discourage abuses of self-employment laws.
Spanish employers and trade unions have done a deal with Pedro Sánchez’ socialist government to overturn several labor reforms of his conservative predecessor, Mariano Rajoy.
I argued against repeal. Rajoy’s liberalizations helped bring down unemployment, from a peak of 26 percent to 14 percent before the pandemic, and encouraged business growth. They allowed companies to opt out of collective bargaining agreements and expanded trial periods for employees.
The reforms did not create more precarious jobs. The share of part-time, temporary and self-employed workers has barely changed in a decade.
Temp work will nevertheless be restricted. Luckily the rest of Sánchez’ changes are mild. (more…)
Maybe I left Spain too soon. The country is trying to lure (back) expats by cutting red tape and taxes.
Early in the pandemic, expats and tourists stayed away when Spain imposed one of the strictest lockdowns in Europe. For weeks, we weren’t allowed to leave our homes except to do groceries and walk the dog.
But as restrictions were relaxed, and teleworking became the norm Europe-wide, sunny Spain suddenly looked more attractive to knowledge workers in Northern Europe. Tens of thousands made the trek south.
Pedro Sánchez wants them to stay. (more…)
Spain’s ruling left-wing parties have agreed to reverse the labor market liberalizations of the previous, conservative government, which made it easier for firms to hire and fire workers.
The decision is hard to justify even by the standards set by proponents of repeal. The reforms did not create more precarious jobs, they did not cause higher structural unemployment, and they barely made a dent in wages. (more…)
Pressure is mounting on the Dutch government to reverse liberalizations in the labor market.
The OECD, a club of 38 wealthy nations, has endorsed a call by Dutch employers and trade unions to encourage the use of permanent contracts.
But where the OECD prioritizes reforms to make it cheaper and easier to hire workers full-time, the Netherlands’ own Social and Economic Council (SER), in which trade associations and labor groups are represented, would make temporary and part-time work more expensive.
The divide is mirrored in Dutch politics: Prime Minister Mark Rutte’s liberal VVD (of which I am a member) and the centrist Christian Democrats would reduce the cost of regular employment for businesses. The Labor Party and Greens would rein in zero-hours and freelance contracts. All four may be needed to form a government. (more…)
Big government is back.
Massive rescue programs have prevented business failures and unemployment on the scale of the Great Depression, even though last year’s economic contraction was nearly as bad. The European Union agreed a €750 billion recovery fund, financed, for the first time, by EU-issued bonds. The money comes on top of national efforts. The United States Congress passed a $2.2 trillion stimulus, worth 10 percent of GDP, in March and added $484 billion in April. An additional $900 billion in relief was included in this year’s budget.
Joe Biden, the incoming president, wants to spend $2 trillion more over the next four years to transition the United States to a greener economy and create a public health insurance program. Corporate tax would go up from 21 to 28 percent.
In Spain, a socialist government has introduced the biggest budget in Spanish history — partly to cope with the impact of coronavirus, but also to finance digitalization, electric cars, infrastructure, renewable energy and rural development. Taxes on income, sales and wealth are due to increase.
In the United Kingdom, the ruling Conservative Party is building more social housing and thinking about renationalizing rail. Unlike during the last economic crisis, it does not propose to cut spending even though tax revenues are down.
Same in the Netherlands, where all the major parties agree the government needs to do more to reduce pollution and prevent people at the bottom of the social ladder from falling through the cracks.
I’m not opposed to more government per se. I’ve argued the United States should imitate the policies of Northern Europe to improve child care, health care and housing.
But let’s be careful not to throw more government at every problem. Sometimes government is the problem. (more…)
Two months ago, I argued Britain was once again the sick man of Europe. It had the second-highest per capita COVID death rate among major countries. Economic output had fallen 20 percent from the year before.
The crisis wasn’t lost on policymakers. The dual shock of coronavirus and Brexit — Britain formally left in 2019 but still applies EU rules and regulations this year — has led to something of a quiet revolution in Whitehall: the potential rebirth of the interventionist state.
There is still much wrong with how the British government has handled both events, the poster child for COVID being the decimation of the British aviation and travel industry as well as the arts. Not since the closing of the coal mines has an entire industry shrunk so dramatically.
Yet the seeds of a new statism have been sown — by a Conservative government. (more…)
French metro and railway workers have been on strike for almost a month to preserve privileges from an era when the trains ran on coal.
The people who suffer the most are workers on modest incomes who don’t own a car and normally commute into Paris by train; small businesses and shops which are understaffed; families that couldn’t get together for Christmas.
The unions behind the strikes claim they are fighting a “president of the rich” — Emmanuel Macron — on behalf of “the people”.
They aren’t. Trade unions are trying to preserve retirement rules that benefit their workers at the expense of everyone else. (more…)
Italy is creating a lost generation.
Consider the following statistics, some taken from the Financial Times:
