In the Country of Dijsselbloem - Labor Relations in the Netherlands

Billions of savings on 'social wage'

Describtion of labour relations, state-induced attacks on 'social wage', 2017 elections and formation of a new governement in the Netherlands. From a council communist view, developed by Arbeidersstemmen (Workers' Voices).

This document was written to make comparisons with Greece and other countries. The text was finished July 3rd 2017. A more actual version (11-7-2017) was published in Dutch languague in the council communist blog Arbeidersstemmen.

General

For a better understanding of the relative favorable economic position of capitalism in the Netherlands, it is important to see its high level of accumulation, its high organic composition of capital, which explain its ability to attract via the market mechanism large portions of value produced in other regions that exploit labor less efficiently.

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This also means that when the communist revolution ends the exploitation of labor by capital, be it exploitation via the market or via the state, the proletariat will do away with differences of profitability between enterprises. With the crushing of bourgeois states, the proletarian revolution will do away as well with accountability based on differences in trade and payment balances, with money circulating as capital and with credit.

Another factor is its position in the logistical chain between its big neighbor Germany and the world market (Rotterdam Seaport). This explains the dominance in exports of the petrochemical sector (34.1% in 2014), machinery and transport equipment (26.8%). (2016 OECD)

Possibly surprising, a major element in its large trade and payments surplus is the agricultural sector: €81.3 billion in 2015 (CBS, 6-6-2016), or 68% of the more than €120 billion total export (CBS, Nederland in 2015). The tiny Netherlands are the world's second exporter (after the USA) while possessing only 0.04 % of the global agricultural territory. For instance, 92% of the 7,041 million kg production of potatoes is exported. Intensive farming produces more than 43,000 pigs and 1.5 million chicken... on a daily basis. A considerable part of the workers in the production of vegetables and flowers, and in the slaughterhouses, are foreigners, who work on temporary contracts at low wages. It is said that the Netherlands could feed the world, of course only if the proletarians of the world could afford buying its food, because most of the people without means of production don't enjoy the privilege of being exploited as wage slaves. Agricultural production is very capital intensive, producing enormous quantities of cheap food of dubious quality (pesticides, antibiotics, resistant bacterias), leaving the population of the Netherlands with enormous amounts of animal shit, the residues of (bio-)chemical waste in the soil and in drinking water, and the air contaminated with CO2, methane gas and other greenhouse gasses. A recent phenomenon is that the concentrations of animals, outnumbering people on a small territory, leads to contamination with diseases that spread from animal to man, as shown by the Q-fever bacteria spreading from goats to people, with often lethal consequences. The peasants, of course, receive less than what they need to continue their farm. A pig farmer, for example receives €0.06 of every Euro sold. (Kees Kooman in Trouw 20-6-2017 p. 18). Most peasants have mortgaged their property to "their" cooperative bank Rabobank (Raiffaisen), that behaves as any other commercial bank. All profits are for big agribusiness who deal in chemicals, fertilizers, biochemicals, seeds; exploit slaughterhouses and function as meat exporters, as flower and vegetables exporters, or who offer services like logistics, transport and, of course, banking.

Finally it’s good to know that, whereas the Netherlands are the number 9 of the countries in Europe in taxing employers (PWC and World Bank 'Paying taxes 2016') and that heavily tax their inhabitants, especially the lower incomes, it is a tax haven for foreign capital, in particular multinational corporations. International pressure on Minister of Finance Dijsselbloem (Labor) to end this 'Piracy' practice is growing. Recently the government felt obliged to give in by handing over information on part of its tax agreements with foreign corporations.

Austerity measures taken by central government

As in other countries, since the 1980s most of the attacks on the wages have been undertaken on "social wage," where workers find it hard to defend themselves in the same way they have done in the 1960s and 1970s, with strike movements that often surprised the state recognized trade unions with wildcat strikes. Amongst the most recent attacks on social wages, following should be mentioned.

Public sector rental homes

The building corporations that are responsible for cheap rent homes, are still 'not for profit'. But in fact several governments left them not only in the position, but even stimulated to manage their 'business' for profit, i.e. preferring to invest in building for the higher incomes, by demolishing cheap homes, if not to simply leave their millions on the bank or to speculate in derivatives, some of its top officials obtaining fraudulent payments from banks and building companies. As a consequence of these infractions by the mechanisms of the capital market, there is a lack of low-rent homes in the public sector, and more and more low and precarious incomes are unable to receive a mortgage credit from the banks, and therefor are obliged to pay relatively high rents in the private sector, to the benefit of parasitic capital, part of which is related to drug criminality (another substantial but hidden export-related sector of Dutch economy).

Health insurances

Now mandatory health insurance is transferred for some years from non profit organizations to private corporations that are allowed to pay dividends. In the background there is a very cost effective surveillance by state capitalism, leaving it to the insurance companies to economize by buying insufficient care from hospitals, while fulfilling their obligations to their 'consumers'... on paper. This has led to dramatic situations in certain sectors, like the care for the elderly and youth psychiatry. For instance, after suicide attempts young people are send home by emergency services for lack of beds hired by the insurance company. Only some of this dramatic situations finally come into publicity, whereupon politicians solemnly declare that they cannot understand how this could happen...

Pensions

After dismantling the tax benefits for early retirement plans (from the age of 55), completely eliminating the latter, the age for receiving state pensions, linked to minimum wages (financed by taxes) has been risen from 65 to 67. Following the complementary pension schemes (funded by mandatory premium payments by employers and employees, billions invested in securities and managed by representatives of employers and trade unions) have been adapted to this risen age for pensioning. According to the pensions laws enacted after WW2, pension levels are still based upon interest rates, which are historically low for years now. This means that pensions no longer follow inflation, when at the same time the reserves are rising with stock prizes.

Austerity measures by decentralization
of "social" tasks to municipalities

Since January 2015 the central government has "decentralized" its tasks on care for the young, work and income, and on care for longtime ill persons and the elderly to the municipalities. The openly proclaimed primary goal of this operation is efficiency. Indeed, after 2,5 years we can see that these "social" tasks of the state are fulfilled at lower levels with catastrophic consequences for its "clients", in particular the poorer parts of the population.

The elderly

Many homes for the elderly are closed, and those staying longer in their own dwellings find that help at home is hard to get, because the municipality – by lack of budget received from the central state – has economized on this help as well.

Youth care

Young people with psychic problems are denied polyclinic help, with the result that their situation aggravates and the numbers of (more expensive) placements in psychiatric institutions have risen to a level that patients... must me refused.

Lowest level social benefits for unemployed

An older "social" task of municipalities is to regulate the lowest level social benefits for unemployed. Every unemployed or underemployed person finally is dependent upon this "service" by the municipality. And their numbers are growing. Because at the one hand the municipal budget is limited (and recently integrated with the budgets for the new municipal tasks as a result of decentralization), and at the other hand the levels of benefits for individuals and couples/families are determined by... the central state, many municipalities embezzle the unemployed under their responsibilities. A notorious bureaucratic means to economize is by imposing penalty discounts because of living together illegally, because of illegal work, refusal to do unpaid "community work" (for instance sweeping streets in the same jackets as convicted trespassers doing community service as punishment), refusal to follow fake courses, for example on finding a job, despite their proven counter-effectiveness. In fact even without penalty discounts, these minimum unemployment allocations (as those of state pensions) are more at the level of biological survival than at a level guaranteeing participation in society.

Negative taxes for lower incomes

For those living from the lowest incomes, the state has foreseen a number of negative taxes, for child care, for health insurance, for rent, etc. Now that unemployed are allowed to earn some extra money, without seeing their unemployment benefit going down, many that try to improve their situation by paid and legal part-time or temporary work, become victim of the 'poverty trap'. This means that when the tax office discovers that these diligent citizens succeeded in raising their incomes above the levels under which they were entitled to negative taxation, it reclaims the sums accumulated in the meantime. But often our industrious partial unemployed already used the extra money they had earned by working to pay their debts or buying long time necessary goods. In that case the tax office shows the same merciless bureaucracy (evictions) as other agencies of the central state, like municipalities and health insurance companies, and of course loan- and mortgage banks that claim payments of rates and interest, or private house owners and even ‘not-for-profit’ housing corporations who claim overdue rents. More and more people come in a situation where debts grow to a level they never can pay back, by fines, interests and costs of bailiffs, who increasingly fall back on illegal proceedings and intimidation against debtors. No surprise that the numbers of homeless people are growing, and that soup kitchens and food banks for the poor are to be found in every region of one of the richest countries of the EU.

Struggles of un(der)employed and lowest incomes

These struggles are rare exceptions, mainly against forced labor (unpaid "community" work). Most of the few organizations for the unemployed, elderly and tenants are appendices of bourgeois political organizations and the state recognized trade-unionism. Those that show ultra-left affinities (anarcho-syndicalist and/or trotskyist) do not refrain from participating 'critically' in occasional fronts with the former organizations, for example by joining at the tail end of the demonstration of May 1st, organized by the social-democratic unions.

Base income

Many unemployed hope that bourgeois policy will come up with a base income for certain categories (older than 55), or for all, without any useless obligations and bureaucratic hassling. But without class struggle, capital will use base income to further decrease the income of the unemployed, for example by skipping negative taxes for lower incomes. As a result of the following desperate need for paid work, wages can be lowered further.

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Only when demands by un(der)employed are fought for by open struggles, enlarging themselves to more and more sectors of the proletariat, including the working, some temporal results can be gained.
There is an obvious parallel with the austerity imposed on health care: the central state ‘delegates’ its responsibility and accountability to other organs, while maintaining a firm financial grip on the latter. This way the central state diverts attention of its share in austerity and repression. Consequently, all of these organs, be they private firms, non-profit enterprises or municipalities, should be considered as state organs and combated the same way as the central state, forcing them with proletarian power to comply with demands of the un(der)employed before the revolution; after the revolution: integration of what remains of their social functions into the organization of production and services by the workers councils, ending their function of repression and their bureaucratic and nontransparent mechanisms.

Distribution of income

According to the most recent figure (2015) 626,000 households – or 8.8% of all households – were on an income below the poverty limits, of whom 221,000 four years or longer. Especially one-parent families are in difficult situations (CBS, 8-2-2017). According to another government office (SCP) in 2014 nearly 800,000 people could not satisfy their most basic needs.

No surprise the distribution of wealth in the Netherlands has become more uneven. The richest 10% of all households own 60% of the wealth produced, 8% of the population is considered as poor (2016 OECD, p.15). Wages lag behind income of capital to a degree that National Bank, the World Bank and CBS (statistical government agency) have warned repeatedly for its consequences. In an editorial comment the newspaper Trouw mentions: threatening social disturbances and a lack of state income by tax on wages (Trouw, 27-6-2017). Other bourgeois voices have argued that a more stable demand and a rise of inflation would be in the interest of capital, and wages could rise for this reason. However, concerning the un(der)employed, no pleas whatsoever to raise their incomes.

Workers at work and un(der)employed

To understand the reasons behind growing unemployment and underemployment, one should know that labour productivity is flat since about 2006 (as in other countries) due to lack of investment in innovation. (2016 OECD, p. 18 and 29). Furthermore, since 2008 most SME (Small and Medium Enterprises) can find no more loans from banks (Idem p. 33). Since the mid 1990s net savings of corporations (except financial corporations) have risen dramatically, in 2014 more than 7% of GDP. (Idem, p. 20). So there is enough capital, but why are there no investments?

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In a long article on the crisis and theories of crisis that appeared in arbeiders­stemmen, this question was analyzed. In short the answer is: “when the revival has not taken place, despite an increased profit rate, a massive injection of liquidity, despite the fact that the credit cranes are wide open and the interest rates are low, this is because companies do not invest in the absence of productivity gains and on both outlets for more capital goods and sufficient sales.” (In Dutch language: ‘Een marxistische analyse van de komende crisis (2 parts)’ Alternatively: ‘Une analyse marxiste de la crise à venir’ in French or: ‘Eine marxistische Analyse der kommenden Krise’ in German).

Since July 2015 unemployed have to accept any job (including below their professional level) after 6 month (instead of 12). According to plan the duration of unemployment benefits will be gradually cut from 38 tot 24 months between January 2016 and July 2019. (2016 OECD, p. 43/44) The effect can already be seen on the unemployed of 55 years and older, who almost have no chance (3%) to ever find work again. More and more of these long term unemployed (3% of the labor force) see their incomes decrease to the minimum levels discussed before.

Falsification of unemployment figures

No wonder that efforts are made to hide this ‘shame’ of capitalism, producing more and more unemployment and its inherent danger of social explosions. As happens all over the world, during the electoral campaign of 2017, unemployment figures drastically decreased, because statistics have been adapted to international standards that prescribe that unemployed appear only in the statistics when they work less that one hour a week. According to official statistics, unemployment decreased to 5,1% or 456,000 in April 2017. But an estimation of the National Bank speaks about 500,000 people looking for a job should be added to official figures, plus 1 million people who work less than they would like to. This makes total unemployment 3.5 times the official figures. (Trouw 10-6-2017).
Apart from falsification of figures, there are two main reasons for the relative low unemployment figures (and low employment as well!): the rise of ‘self-employed’ work and ‘flexibilization’ of contracts.

‘Self-employed’ work

On an enormous scale (1 million workers or 17% of employment in mid 2015 according to 2016 OECD, p. 27/30) workers have been, and still are, put under pressure by their bosses to continue working as “ZZP” (‘self-employed’ entrepreneurs without staff), depriving them of all kinds of social benefits. The state stimulates self-employment with fiscal means. (2016 OECD, p. 28)

Flexibility of contracts

Flexibility of contracts (risen from about 16% in 2006 to 22% of the labor force in 2016; flex CBS p. 12), stimulated with the excuse to stimulate … employment, where in fact 1 out of 2 flex workers is out of work within three years, especially the less educated workers.
The Netherlands are on top at temporary employment, but – as we wrote above – the move to permanent full time jobs is very limited; the Netherlands scores worst in this aspect (for the workers), as the following three graphs indicate. (2016 OECD p. 40, 41)

Working in the black

According to professor Schneider in 2016 8.8% or € 62 billion of the Dutch GDP is undeclared work. Many work ‘in the black’ as house cleaners for about € 12.50 an hour (NRC, 24-6-17). Probably the building sector uses most undeclared workers, many of them eastern Europeans, by means of a pyramidal structure of subcontractors. As in other sectors where many from Eastern Europe work (logistics, food, agriculture), they remain isolated from Dutch workers, and neither side of this divide in the proletariat seems interested in solidarity, but only sees competition.
Wages have furthermore decreased by factors linked to globalization:
- a worsening position on the job market (partly self-inflicted by lack of solidarity with foreign and precarious workers);
- cheap food policy;
- cheap consumer goods from Asia.

Trade unions

Most trade-unions in the Netherlands are centralized into two confederations, FNV (a fusion of social-democrat and catholic unions), and the smaller CNV (christian). Both are recognized by the state and behave accordingly as responsible partners of capital. In the seventies the remainders of ‘independent’ unions have disappeared.

The actual situation contrasts most to the situation in the 1960s when a labor market in favor of the workers gave rise to 39 strikes on average a year with 182,500 workers involved, who had to strike only 75,040 working days, to obtain higher wages. A greater part of these struggles were wild cat strikes. In the 1970s, when a serious economic crisis announced the end of the reconstruction after WW2, capital resisted to strikes, resulting in a yearly average of working days lost exploding to 172,000. Since the 1980s attacks on social wages, especially those on unemployment benefits and growth of unemployment (by automation, robotization, outsourcing and displacement to low wages countries), has spread fear with those workers still at work. In this way neo-liberalism succeeded to reduce the total of working days lost for capital from 172,000 in the ‘hot’ 1970s to 61,000 hours in the 2010s. The number of strikes and of workers implicated is rather stable over the period 1960-2016. (Based on CBS).

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The neoliberal offensive has objectively enlarged the gap between labor and capital and at the same time divided the working class into fixed contract workers, workers with flexible contracts and unemployed workers. Populism has made use of the reactionary utopia within the proletariat that longs back to the ‘welfare state’ of the 1960s and 1970s, in order to poison consciousness with xenophobia and nationalism in parts of the class. We should see that this racism and nationalism within the class had been stimulated by the left and its trade unions with its national neo-Keynesian ’solutions’, its defense of ‘national’ capital and exhausting workers in false struggles without a chance of generalization.

Union membership is declining since the 1990-ties, to 1.7 million members in 2016 (CBS, 27-10-2016) In 2011 only 20% of the total of employees were union members (CBS, 17-9-2012). This decline of trade-unionism reflects the diminishing importance of low-skilled work and the low level of industrial conflict in the Netherlands. More recently, after decennia of support, FNV pretends to resist flexibilization of contracts. In fact we see that in conflicts where flexibilization and/or immigrant labour are an issue, unions defends only one fraction of the working class (workers with fixed contracts or workers with flex contracts, dutch or foreign workers) with the obvious aim to prevent a struggling unification over the borders of these categories. (See for details an article in dutch language on a manifestion against unemployment in the shipyard sector and protest of foreign postal workers: Arbeiderstemmen).

State and Government

The actual government in the Netherlands is in power from 2012 and will be until the current negotiations will have led to the formation of a new government. It was formed by two parties, the conservative VVD (41 seats) and the social-democratic Labor Party (PvdA), with 38 seats. The main objective of this government was to reduce the huge deficit in public finances resulting from the global economic crisis. To this end harsh austerity measures were introduced, basically ruining the welfare state that had been built after the Second World War. The welfare state was established as a Dutch variation on the American New Deal between the government (in which the social-democrats played a very important role), and the trade unions, falsely claiming to ‘represent’ the workers, as shown by many wildcat strikes in the 1950-ties and 1960-ties.

March 2017 elections of parliament

The misleading theme of Dutch general election on March 15 2017 - after the Brexit vote in the U.K. and Donald Trump’s victory in the U.S. - was the supposed choice between ‘democracy’ and (rightwing) ‘populism’.

Following the example of Germany, prime minister Rutte prevented Turkish politicians campaigning for the referendum in Turkey, provoking riots and accepting a diplomatic incident for the bigger purpose to win some xenofobic right-populists votes and preventing a victory of Wilders’ party. (Arbeidersstemmen “Turkey-Netherlands riot: both prime ministers gain, the workers lose”.) No wonder Rutte’s governing VVD, a conservative-liberal party, turned out to get the most votes, though it lost 8 seats (dropping to 33). Geert Wilders’ right-populist party PVV won only 5 seats, climbing to 20.

A coalition of several parties is required to get a majority (76 seats) in parliament. Holland has had coalition governments, consisting of two or more parties. The dutch bourgeoisie want to keep the Wilders’ party in opposition ‘for its inherent instability’ and … not to have right-populism and xenophobia itself discredited in the eyes of the proletarian part of its voters. Therefor the bigger parties all agree that Wilders’ PVV is not welcome in a coalition government. Efforts are made to form a government with VVD, CDA (christian-democrat opposition party) with 19 seats and D66 (left-liberal party) with 19 seats. Unfortunately these three parties that all defend neoliberal policies have no majority in the fresh elected parliament. The social-democratic Labor Party (PvdA) was severely punished by its traditional voters for its enthusiastic participation in the actual neoliberal government and lost 29 of its 38 seats. To reclaim credibility, PvdA refrains from participation in the next government. So where went the 29 seats that PvdA lost by participating in government? Groen Links (mainly a fusion of the former Communist and Pacifist Parties, now an ecologist party with a vague left-bourgeois program and middle classes support), did win 10 seats, and as the biggest winner now occupies 14 seats. Two efforts to have Groen Links participate in government, failed, pretending disagreements ’on the question of immigration’. Anyway, the remaining ‘left’ votes that deserted from PvdA, representing 19 seats, neither went to SP, an ex-maoist workerist and left-populist party, that even lost 1 of its 15 seats, probably because it has become obvious that it speaks with ‘double tongue’ about the issue of immigration and refugees. No doubt, parts of the workers voted on Wilders’ PVV, infected as they have become by the virus of xenophobia and racism, by lack of working class understanding that it is capitalism that irreversibly attacks social and real wages, closes or transfers factories, imports cheap labour, replaces labour by capital and undertakes flexibilization and precarization of contracts. (In part based on Nick Vos “Dutch Treat: The General Election of March 2017 and the Populist Vote”, an article that gives a partly different appreciation.)

Till now no government had been formed. This can for a bigger part be explained by the traditional uncertainty of the dutch bourgeoisie in its external relations and concerning domestic policies. The unstable course of Trump and the Brexit means for the Dutch capital a loss of two important partners that could be used to counter the German and French influence in Europe. At the moment Rutte tries to find replacement allies in ... Eastern Europe. At the other hand it is not clear what parties will govern Germany after its september elections. This is also important for domestic reasons because industrial relations in the Netherlands are mainly modeled to the german ‘Rheinland’ system. For all these reasons, there is no new government to decide on how to spend the billions of Euros economized on social wage.

Despite, and more exactly, because of the ‘decentralization’ of austerity measures (see above), the central state, in fact is in control of these billions of Euros. The state is able to redistribute enormous sums to corporations as tax reductions and ‘green’ investments, ‘investments’ in army, navy and repression. In the negotiations that have to lead to a new government, this redistribution of these billions of economies on ‘social wages’ are an important issue of struggle within the reigning class.

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The proletariat cannot takes sides in these inter-capitalist struggles. It will have no other alternative than to destroy the state - this parasitic monstrosity – and to replace it by the class power of the workers’ councils.
- The robbery that wage slavery is, can only come to an end when workers find their way to a unified combat against decreasing wages, benefits and the deterioration of social services and working conditions.
- Unified combat means smashing the borders that actually divide the proletariat and make it powerless: those of trade and industry, levels of skill and education, kinds of labor contract, nationality and religion.
- Unification can only be realized by autonomous organization in general assemblies who take all decisions and do most of the action. Where the limits of this mass organizations are reached (levels of department, enterprise, neighborhood, town or industrial region) they elect permanently revocable delegates on the basis of a clear mandate.
- Only when workers develop enough power at the international level to control society through their workers' councils and smash capital and the state, workers can begin the transformation of society by focusing on production and services for the satisfaction of human needs.

July 3rd 2017, Fredo Corvo
Most used sources
(2016 OECD) OECD (2016), OECD Economic Surveys: Netherlands 2016, OECD Publishing, Paris (online).
(CBS, date) press releases by CBS.
(flex CBS) CBS (with TNO) "Dynamiek op de Nederlandse arbeidsmarkt: de focus op ongelijkheid", June 2017.

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Fredo Corvo
Jul 14 2017 13:15

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  • Despite of the ‘decentralization’ of austerity measures the central state, in fact is in control of these billions of Euros. The state is able to redistribute enormous sums to corporations as tax reductions and ‘green’ investments, ‘investments’ in army, navy and repression.

    Corvo