The First Part-TIME Economy in the World
Does it Work?
The low open unemployment rate, combined with the appearance of difficult-to-fill
vacancies in a number of regions and jobs, suggests that the Dutch economy is presently
running close to its ‘full-employment rate’. In many sectors employers report problems of
recruitment. There are still considerable problems of hidden unemployment, though. Of
every two persons between the age of 55 and 65 only one participates in the labour market.
The government currently considers the repeal of the executive order of 1984, which
exempted older workers (57,5 years and older) from the obligation to engage in job search.
With the recent influx of women around the age of 35 or 40 in the system, the current
number of people on full- or part-time disability pensions has again risen dangerously close
to the one million figure that created such uproar in the early 1990s. And while the number
of people who are out of a job during one year or longer is decreasing rapidly, their
proportion in total unemployment has remained stable—since the early 1980s—at 50%.
This reflects passive welfare and labour market policies of the past, and is a considerable
challenge to current policy makers. The same is true for unemployment and disadvantages
among the ethnic minorities and the unskilled. Unemployment among unskilled and
immigrant workers has also decreased (in about the same degree as the general
unemployment rate) but remains at a much higher level (around three times the national
average).
3 A Job-INTENSIVE Growth Path
In several ways we can see the early 1980s as the ‘turning point’ (Visser and Hemerijck
1997). Job growth started at the end of 1983 when the country recovered from a deep
recession, was particularly pronounced in the second half of the 1980s, continued through to
1992, stagnated in 1993-94, rebounded and was remarkably strong after 1995. A
comparison with the EU shows that over the full period 1983-1997 GDP growth was only
slightly higher in the Netherlands (though every single year since 1992 the Dutch economy
has grown faster than the German economy). The real point of difference is that in the
Netherlands per point of GDP growth more jobs (or units of labour, if calculated in hours)
have been created that elsewhere in Europe. This pattern of what may be called ‘job
intensive economic growth’ reflects in our view three main factors: (1) moderate wage
increases, (2) development of labour intensive services and (3) job redistribution. I discuss
each factor briefly.
3.1 Wage moderation
Wage moderation contributed to job intensive growth in three ways (Visser and Hemerijck
1997). First it helped investment by restoring the profitability of business and thus created a
necessary condition for investment. The share of labour income in net enterprise income
dropped from over 90,5 percent in 1980 to 83.5 percent in 1985 and has hovered around 83
or 84 percent since. Second, it contributed to the sale of manufactured goods and tradable
services in foreign markets, raising net exports and growth in the open sector of the
economy. Third, it helped to keep more people with low productivity on the payroll and
eased the entry of inexperienced young people or re-entering women. As a corollary, labour
productivity per hour increased less than in neighbouring countries (Kleinknecht 1996;
Schmid 1997). On the other hand, it should be noted that productivity per hour in the
Netherlands is very high by international standards (lower only than in the US and in