Reform proposals to tackle labour market segmentation

Six policy measures to improve labour market performance, particularly to tackle its segmentation, and to enhance social dialogue are discussed: (1) flexinsurance which assumes that the employer’s contribution to social security should be proportional to the flexibility of the contract, (2) workplace tax which considers bad working conditions as “social pollution” and operates by analogy with the environment-protection tax, (3) basic income independent of employment status to stimulate unemployment-to-work transitions by excluding losses of out-of-work benefits, (4) politicization of trade-unions to enhance their presence in political debates after the loss of influence of left parties, (5) structural reallocation of trade-unions, corresponding to multi-nationals (e.g. “Coca-Cola union”), as opposed to national unions which can hardly negotiate with multinationals,  and (6) constraining financial markets, since export of jobs in form of foreign investments gives employers a legal instrument of pressure on national governments: “deregulate labour markets, otherwise we move jobs abroad”. Some reforms can be based on composite indicators of working conditions developed as prototypes by the Hans-Böckler Foundation. For instance, the work-place tax can be determined with regard to the individual index of working conditions. It should be noted that such a policy measure should not be regarded only as a burden for employers to stimulate improving working conditions. It is also a measur to improve the production quality due to better jobs, which is vital for the competitiveness of the European economy in the long run.