The First Part-TIME Economy in the World
Does it Work?
The increase in the labour participation of women with children has enhanced the need and
created the extra income for family orientated services, jobs that are mostly jobs taken up by
women. Since these services are in the Netherlands historically undeveloped in the public
and communal sector, low cost commercial services in these areas have become more
important. Increased flexibility, through part-time and temporary employment, has
supported this dynamic.
3.3 Working-TIME Reduction and Job Redistribution
Trade unions in the Netherlands have from 1978 campaigned in favour of job-sharing. Like
other European trade unions they demanded in 1979 a ten per cent reduction of working-
time (four hours per week) to be realised before 1985. As part of the Wassenaar agreement
of 1982 (in which trade unions conceded that the profitability of Dutch enterprises needed
improvement as a condition for a recovery of private sector investment and employment),
employers accepted to negotiate over a ‘cost-neutral’ reduction of working-time. In the
years between 1983 and 1985 this resulted in an average reduction of working hours of five
per cent, from 40 to 38 hours per week. The reduction took mostly the form of extra days
off per year or per month and in most cases the reduction of working time corresponded
with a reduction of operating time (Visser 1989).
The 1983-85 round fell in a recession and most firms used working-time reduction to reduce
slack and cut the least productive hours. An enterprise survey of the Ministry of Social
Affairs and Employment showed that in 78 percent of all enterprises, with 54 percent of all
employees covered by collective agreements, there had been no replacements.
Consequently, most workers experienced increased time pressure and work intensity (de
Lange 1988).
As Drèze (1984: 34) has predicted: ‘firms engaged in labour hoarding will not respond to
shorter working hours by new hirings, for the same reason that they do not offset natural
attrition of their work force by new hirings’. He adds that for similar reasons ‘such firms
will show relatively little reluctance to reduce hours, since they have excess labour anyhow’
(idem). This may well explain why Dutch employers gave in to union pressure for shorter
working hours - a demand which they had doggedly resisted until 1982 and would again
resist once the economy moved out of recession. The upshot of this argument is that shorter
hours will induce additional recruitment only in those firms that are already hiring, to offset
quits or expand employment. There were few such firms in the private sector in the first half
of the 1980s. All told, the employment impact of the 5% shorter working week was limited
- the maximum effect is estimated at a 25% retention rate for vacated hours, the remainder
being captured by employers through more efficient staffing, higher productivity and
reduced business hours (Visser 1989). In the public sector the employment effect of the 38
hours week (which was introduced in 1986 and was in part compensating a 3% reduction of
nominal wages in 1984 and a standstill in 1985 and 1986) was estimated at 65%. The higher
retention rate in the public sector reflects the fact that unions exerted a much more effective
control over new recruitment. In the private sector, Dutch unions are weaker and not
directly present in the firm or workplace.
Employers successfully resisted the pressure for mandatory new recruitment or a contractual
obligation as quid pro quo for wage moderation or shorter working hours with reduced pay.
A recession-induced campaign for shorter working hours, like the 1983-84 campaign, has
the characteristics of ‘public regarding’ behaviour of ‘insiders’ in order to absorb more
people in employment who would otherwise be unemployed. Against the background of