Dismantling the welfare state – the case of the Dutch disabled

by Ingrid Robeyns on May 12, 2018

Many scholars, journalists and commentators have written how in many (all?) European welfare states government-based systems of support and solidarity are being restructured, scaled down, or eliminated. One common ideological basis in all those reforms is the view that people should be made maximally self-reliant and, if need be, families should support other family members in need – hence this would justify a cut-back of state involvement. The European welfare states have always been something most Europeans have been proud of – the idea that civilisation implies that we collectively care for the most vulnerable people in our political community, and that we collectively pool risks that, if left to the market, would lead to some people paying much more to secure those risks than others.

In several countries, the reforms are targeting the income- and labour market support systems for the disabled. In the Netherlands, this has now taken a really ugly turn, as was very well described in an article (in Dutch) by Gijs Herderscheê and Sheila Sitalsing, which was published today in De Volkskrant.

The previous coalition consisted of the labour party PvdA and the conservative party VVD (in the Netherlands they are called “liberals” but the party mainly consists of conservatives and/or those putting the interests of the markets and businesses first. Those who are liberals in that party are not social-liberals or liberal-egalitarians, but rather classical liberals). That coalition ended the possibility for citizens who have been disabled from birth to receive a life-long allowance which would keep them out of poverty (the reason being that too much use was made of it). The new policy expects disabled citizens (except those who have absolutely zero earning capacity) to find a job on the regular labour market, and the difference between their estimated “productivity-reflecting earning capacity” (hence the market-clearing wage) and the minimum wage would be paid for by the government. Some employers apparently complained about the paperwork that needed to be done. Yet another issue raised was that most disabled didn’t find a job at all – according to some estimates about 30.000 young adults currently leaving special needs education are neither working, nor in traning or school, nor are they entitled to any allowances. Guess twice who is picking up that tab, and guess twice what this does to those young lives.

So last year came the new government – still with the VVD in the driving seat, yet this time without the labour party, and instead an odd combination of the centrist liberal party D66, the centrist Christian-Democratic party CDA, and the leftist Orthodox Christian party Christen Unie. This new government wants to take the dismantling one step further – and is again targeting the most vulnerable, those who are disabled (not sure how the Christians in this coalition are explaining that to their fellow church-goers, but hey, after having been through 16 years of Catholic education I may still be wrong about what the Bible preaches).

The new proposal entails that the minimum-wage legislation will no longer hold for the employment contract of those disabled “with lower productivity”. The employer only has to pay the wage that is taken to reflect the productivity – would could be any percentage (well below 100) of the minimum wage. The worker can then apply to the state for the amount equalling the difference between the wage earned and welfare-benefit level. This implies at least five major deteriorations in the situation of the disabled workers.

First, the level of welfare-benefits is lower than the level of the legal minimum-wage. Many disabled workers who will keep doing the same work will experience a decrease in their income.

Second, the disabled have to do the paper-work to apply for the difference between the market-clearing wage and the welfare-benefits. Many disabled workers have either issues with their cognitive abilities, or have poor executive skills, or other issues that make it hard for them to do this paperwork. If the employers are complaining that they don’t want to do the paperwork, why should we burden the disadvantaged with it?

Third, in order to qualify for welfare benefits, one is not allowed to have personal savings above a very low threshold. One could argue that this is justified for those who need to make use of welfare benefits for a short period in their lives; but for the permanently disabled, this implies that they will never be able to raise above the poverty-line, and given that everybody at some point in their lives experiences some form of brute luck or makes a costly mistake, it will make them very vulnerable for falling into poverty. It is cruel not to allow people to try to save up a little bit in order for them to qualify for income-replacement that, in my view, they are entitled to on grounds of social justice, poverty alleviation and human decency.

Fourth, under this new regime, the disabled workers would no longer be able to save for their pensions to the same extent as before, since there are no pension contributions being paid for welfare support payments. They will only be saving for pensions for the ‘market-wage’ part of their income, not for the welfare-support part, whereas under the current system the employer pays pension contributions for the first part, and the state for the part that matches the gap up to the minimum wage. All other employees working for the legal minimum wage are saving for their pension – but apparently this government has decided that for the disabled there is no need to save the same amount for their old age. Quite logical, right?

Fifth, it is an insult to the disabled since they are not treated the same as other vulnerable workers who are non-disabled. That is also the argument that has been stressed by a group of disabled activists who have started a petition to ask the government to not adopt this policy.

As Herderscheê and Sitalsing rightly conclude their article, the additional worry is that once the disabled workers are under this worse regime, other vulnerable groups will follow, such as those trying to move from welfare benefits to a job. If one lets loose the principle that the legal minimum applies to all workers, then what is left of the welfare state? And wasn’t it the case that the welfare state entailed the promise that we would care for the truly needy? Well, this government’s standards of care are not my standards of care. I am appalled that it has gotten so far. And I am also still angry at the labour party – the party for the workers, for Goodness sake! – who was partly the architect of this plan, and has been a very willing contributor to the earlier fases of the dismantling of the welfare state.

{ 25 comments }

1

CP Norris 05.12.18 at 6:53 pm

“The European welfare states have always been something most Europeans have been proud of…”

At what point can we conclude, from election results, that this statement is no longer true? Taking the long view of history, for how long was it true?

2

engels 05.12.18 at 7:17 pm

Appalling. The complicity of the Left, as in Britain
previously, is shameful.

3

Salo 05.12.18 at 9:28 pm

The less involvement by governments, the more the church can become the central player in requesting money for welfare purposes? The more powerful the church becomes?

4

Michael Connolly 05.13.18 at 1:16 am

Deeply disturbing.

5

eg 05.13.18 at 3:51 am

At what point does the revulsion inspired by such a regime immolate it?

6

Moz of Yarramulla 05.13.18 at 3:58 am

From Australia, and looking at Europe, I have to agree with CP Norris above. While it is likely true that many Dutch and other Europeans used to be proud of their welfare states, there’s strong evidence that they accept the new view that the disabled, the poor and the weak are liabilities and deserve little or nothing.

The British in some ways have taken the lead with a popular view that poor people starving in the streets after being kicked out of slums is a good and necessary thing. But the Germans also came out strongly in favour of that during the GFC and the useful crises that followed. Better the Greek state collapse than German banks suffer inconvenience, IIRC.

7

shah8 05.13.18 at 4:21 am

Okay, this is slightly off topic, as it refers to the US rather than Dutch or European welfare states/disability. However, I think that these links will help people understand what is at state, who the interested actors are, and how these policies flow, and from reading this post, I think most of the dicussion translates to the European context as well. Of course, as a disabled person, topics like these are important to me.

https://arineeman.com/2015/09/20/sheltered-workshops-part-1/

https://arineeman.com/2015/09/26/sheltered-workshops-part-2/

One more thing, the political and policy work discussed, particularly in the second part is fundamentally how beneficial change happens, in a way that I think few people understand all that intuitively, and I think this aspect will help people understand how to push their own interests, too.

8

oldster 05.13.18 at 5:03 am

That’s all very depressing.

A query:

In the US, the driver behind these attacks on the social safety net is nearly always, and more or less explicitly, racial animosity. I have the (less well-informed) sense that the same dynamic applies in the UK as well, with “race” in the US sense of black vs. white being sophisticated a little bit to “immigrants of the wrong sort”.

The right-wingers will talk all kinds of nonsense about how their motive is really the attempt to “encourage self-reliance” or “not foster dependence on the government,” but as soon as you dig a layer deeper, or just get them to talk off-record, it is always and everywhere the same: “lazy shiftless blahs are getting rich off us hard-working whites and we won’t take it any more.”

So my query is this: how much is a comparable dynamic playing a role in the Netherlands? How much, for instance, is this a response to the perception that more and more people of non-Netherlandish are using these resources? Would this be happening (in the same way, to the same extent) if not for the immigrants?

9

Ingrid Robeyns 05.13.18 at 8:58 am

Oldster – from the debates, I don’t get a sense that race/ethnicity/migration is a big factor here, but I may be wrong. It’s much better understood in ‘capital’ versus ‘labour’ terms, I believe, with most political parties now being the willing defender of the interests of ‘capital’. But given that in public debates these terms have Marxist connotations which put off most of the electorate, we don’t use those terms in public debate to discuss these issues…

10

Matt 05.13.18 at 12:10 pm

This sounds like one of those situations where, _even if_ we thought the ideas behind the changes were well intended, the resulting bureaucratic and administrative burden would plausibly outweigh any potential benefit. Of course, I’m skeptical that the motivation is in fact a good one, but I would be interested to see a clear and objective cost-benefit analysis done on the program, one where all the costs are properly included.

11

Ingrid Robeyns 05.13.18 at 5:15 pm

that’s spot-on Matt – but what I’ve seen from an earlier reform in the Dutch welfare state – namely child protection services and child psychiatric care – there is no reason to be optimisic that such genuinly objective and clear cost-benefit analysis will be delivered. INstead, we’ll get – again – lots of positive, optimistic rhetoric, but in the end it’s an ordinary way to reduce government expenditures and risks (sometimes under the ridiculous claim of “efficiency savings” – the claim that if you shift certain services to a different level of welfare state e.g. from national to local, services can be delivered “more efficient” and hence a cut can be made on the total budget without, it is assumed, a loss in the services delivered.) In the case of the transition of the services to vulnerable youth, it’s quite clear that it’s not worked out well, and that there was *loads* of wishful thinking going on among the politicians (including, again, many from the labour party), who were defending this transition. One can see that pattern of non-evidence-based assumptions + optimistic rethorics as the basis for justifying spending cuts in the current case too. By the way, in the current case of policies affecting disabled adults, as well as in the previous case of the policies towards vulnerable youth, there have always been plenty of experts (professors in the respective fields, or people with standing who work on the ground) who fiercely objected to the policies – but with no effect.

12

SusanC 05.13.18 at 5:40 pm

@oldster: Re. the UK: You certainly see racist views expressed over here, and quite possibly there’s an element of racial animosity contributing to Brexit. But the typical Conservative Party policies that hurt the poor are not, as far as I can see, racially motivated – it’s more social class animosity.

13

engels 05.13.18 at 6:26 pm

Think there’s a sense in which class gets treated more and more like a quasi-ethnicity (prejudices against the ‘underclass’, ‘chavs’ etc) especially as it become less porous, more geographically based and more heritable.

14

engels 05.13.18 at 9:17 pm

15

sanbikinoraion 05.14.18 at 9:47 am

engels++

The UK fitness-to-work assessments cannot even be sold as “efficiency savings” or “cost savings” or even “cuts”. There is no explanation to the idea that we should spend more money on giving disabled people less money, besides an ugly, selfish, right-wing ideology that simultaneously rips off the poor while putting the money in the pockets of their own corporate interests. How 40% of our nation thinks that this is acceptable enough to consider voting Tory, I do not know.

16

Z 05.14.18 at 11:12 am

Third, in order to qualify for welfare benefits, one is not allowed to have personal savings above a very low threshold

I can’t… So much is wrong with that, words fail me.

[D]isabled workers will only be saving for pensions for the ‘market-wage’ part of their income, not for the welfare-support part

And it somehow becomes worse. Seriously, WTF is going on here?

once the disabled workers are under this worse regime, other vulnerable groups will follow

Of course, because now these other groups are the privileged, you know.

engels, SusanC The DWP’s war on the disabled is actually costing the Exchequer money […] it’s more social class animosity.

That seems quite right to me. Here, a law recently passed (against ongoing strong opposition) to change the status of train workers. The few people who conducted an analysis concluded (unanimously, as far I can tell) that the change would cost more than the current system (basically because the current status comes with job security, and that unsurprisingly allows to retain qualified employees at a salary below market price). This did not move the government position one bit, leading to the suspicion that the real aim was not negate one of the last if not the last category of protected working-class job.

17

Z 05.14.18 at 11:34 am

Ingrid there is no reason to be optimistic that such genuinely objective and clear cost-benefit analysis will be delivered. Instead, we’ll get – again – lots of positive, optimistic rhetoric, but in the end it’s an ordinary way to reduce government expenditures and risks. […] By the way, in the current case of policies affecting disabled adults, as well as in the previous case of the policies towards vulnerable youth, there have always been plenty of experts who fiercely objected to the policies – but with no effect.

I believe that this is an important observation that I find has not become the political trope it should be: despite the pretense of technocratic competence and objective, reasonable, mean-tested, a-ideological approach, much of the current administration of actual, real questions by center-right, neoliberal governments fails on its own economic terms.

My theory is that in the current grossly inegalitarian system, the basic choice a government can make is 1) reduce inequalities, but then you have to go against the wealthy and powerful (essentially no-one tried this as of now) or 2) feed the beast, but that has some limits (the World Inequality Report shows a dramatic diminution of public wealth, and an asset can be privatized only once), and when the last bone is gnawed, the only option left is to transfer more and more of the costs and risks to those too weak to protest, whatever the actual cost to the society as whole.

with most political parties now being the willing defender of the interests of ‘capital’. But given that in public debates these terms have Marxist connotations which put off most of the electorate,

Yeah, this may have to change.

18

engels 05.14.18 at 11:43 am

How 40% of our nation thinks that this is acceptable enough to consider voting Tory, I do not know.

Maybe partly because for years Labour was every bit as bad, eg the godawful Rachel Reeves:
https://www.independent.co.uk/news/uk/politics/rachel-reeves-says-labour-does-not-want-to-represent-people-out-of-work-10114614.html

19

Theo 05.14.18 at 1:23 pm

Re. the Christianity of these measures: unlike much of Europe, but like the US and UK, the Netherlands is traditionally Reformed rather than Catholic or Lutheran. So doing good won’t get you into Heaven, but getting rich is a sign that you’ll get there by God’s grace. Leaving the poor and disabled to rot is entirely consistent with Calvinist theology, since their suffering must be what God wants and why should any of the Elect do anything to help them?

20

Yan 05.14.18 at 2:22 pm

Oldster @8

“In the US, the driver behind these attacks on the social safety net is nearly always, and more or less explicitly, racial animosity.”

This seems a rather surprising and contentious claim. My own sense is that the right used to be the primary obstacle to social welfare in the US, and that they were certainly motivated and aided by racial animus, in addition to simple greed.

However, for the past 30-40 years, especially since the “end welfare as we know it” DLC Democrats took over the left, the dismantling of social welfare has been a bipartisan neoliberal project, one that isn’t as markedly driven by racial animus and in many ways is very hospitable to anti-racism, since class-indifferent forms of discrimation no longer have a specific economic utility and are often economically inefficient.

21

Ebenezer Scrooge 05.16.18 at 1:35 am

Yan@20
I’m happy to say that I think you’re a few years behind the times. DLC Democrats are almost as rare these days as patriotic Republicans. The Democratic Party, at long last, has discovered political economy. This includes its right wing, which still wants to pay some attention to neoclassical economics, but is at least willing to admit that neoclassical econ has its failures.

22

sanbikinoraion 05.17.18 at 11:10 am

@engels sorry but I don’t trust a single thing written in the Independent since it went online only. It’s a clickbait rag almost as bad as the Daily Mail now, sadly.

The welfare state was expanded massively by the last Labour government, both in terms of direct payments and improved funding for the NHS. That stands in stark and obvious contrast with the current administration.

23

engels 05.17.18 at 12:38 pm

sorry but I don’t trust a single thing written in the Independent since it went online only

How about the Guardian?
https://www.theguardian.com/politics/2013/oct/12/labour-benefits-tories-labour-rachel-reeves-welfare

24

Dipper 05.17.18 at 1:13 pm

@ engels

… and that was why I liked Rachel Reeves before she went bonkers over the EU.

Politics is about power. The first piece of analysis anyone should do when considering a particular aspect of policy is look what it does to the power relationships. Workers’ only power comes from their work; by definition they do not have capital or assets. Paying excessive welfare and having high rates of marginal rates of taxation so that people get what they “deserve” not what their efforts bring them removes from workers any power they have over their own lives and puts it firmly in the hands of the state to reward them as the state sees fit. Needless to say this is why “left-wing” parties are becoming more middle-class across Europe – because they sit in judgement on workers and get to decide what money other people get.

25

engels 05.17.18 at 1:48 pm

Politics is about power. The first piece of analysis anyone should do when considering a particular aspect of policy is look what it does to the power relationships.

Well I kinda thought that gutting the welfare system so that getting fired from your job threatens not just lost wages but homelessness and starvation might give bosses MORE power over workers but hey what do I know

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