Surveying the welfare state: challenges, policy development and causes of resilience



18
workers had to accept small-scale benefit cuts) and activation policies became more pro-
nounced in the granting of formerly ‘passive’ transfer payments. As for the latter, a focus
on employability and work requirements was noticeable for ALH and social assistance
claimants, but also for those who were claiming long-term ALG benefits (Clasen 2005:
69f.). Additionally, Bleses and Seeleib-Kaiser stress that active labour market measures
were used extensively to combat unemployment and incentives for early retirement from
the 1980s were replaced by other measures. With respect to the curtailment of transfer pay-
ments, they note a continuing trend toward recommodification of workers (again exempting
those unemployed with children) (Bleses/Seeleib-Kaiser 2004: 61).

With regard to developments in old-age pension arrangements in the same two periods be-
fore and after 1990, what can be observed? Arguably, the change in government did not
affect the direction or pattern of pension policy, leading to a pre-1990 period of ‘consensual
adaptation and adjustment’. More specifically, it caused ‘a wide range of cutbacks affecting
current and future pensioners (...) aimed at curtailing expenditure for both pension insurance
funds and the federal government’. The measures employed to achieve this included several
increases in contribution rates, softened by lowering pensioners’ contribution rates to un-
employment insurance (Clasen 2005: 105f.). Just before reunification, in 1989, an important
pension reform was concluded (to take effect in 1992), which included major new aims
such as indexing pensions in line with net rather than with gross earnings and fixing the
level of federal subsidies (Schmahl 1993, 1999, in: Clasen 2005: 107).

The post-unification period was characterized by the breakdown of the traditional pension
consensus between the major parties, which meant more cross-party conflicts over pension
policy and an increase in the politicization of the pension issue. This new conflictive politi-
cal style culminated in the 1997 pension reform as a ‘new and more far-reaching round of
cutbacks and revenue enhancing changes (Clasen 2005: 111f.): it combined changes affect-
ing the level of pensions, limiting early retirement options for disabled people and the intro-
duction of the so-called demographic factor (designed to link the indexation of pensions
with the life expectancy of generations of pensioners). From the perspective of the princi-
ples of pension insurance, Bleses and Seeleib-Kaiser note the entire ‘era Kohl’: in several
steps, all of which constituted incremental reforms, the government strengthened the link
between contributions and pension benefits, which boils down to weakening what was con-
ceived to be a ‘socially adequate’ retirement income. Thus, pensions moved away from the
wage replacement principle, especially for those who were unable, for whatever reason, to
complete the required amount of contributions to receive a full pension. On the other hand,
pension arrangements increasingly accommodated the needs of families by introducing
child-rearing credits, which is seen as a ‘systematic departure from the strong male bread-
winner model and wage-earner centred social policies’ (Bleses/Seeleib-Kaiser 2004: 75)

Finally, in the area of health care, we can distinguish at least two periods during the ‘Era
Kohl’. The period up to 1992 continued to be dominated by a ‘traditional’ cost-containment
strategy. It included several strategies: revenue-centred expenditure policy (focusing on
stable contribution rates); a cautious strengthening of sickness funds versus care providers



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