Dismantling the welfare state – the case of the Dutch disabled

Many scholars, journalists and commentators have written how in many (all?) European welfare states government-based systems of support and solidarity are being restructured, scaled down, or eliminated. One common ideological basis in all those reforms is the view that people should be made maximally self-reliant and, if need be, families should support other family members in need – hence this would justify a cut-back of state involvement. The European welfare states have always been something most Europeans have been proud of – the idea that civilisation implies that we collectively care for the most vulnerable people in our political community, and that we collectively pool risks that, if left to the market, would lead to some people paying much more to secure those risks than others.

In several countries, the reforms are targeting the income- and labour market support systems for the disabled. In the Netherlands, this has now taken a really ugly turn, as was very well described in an article (in Dutch) by Gijs Herderscheê and Sheila Sitalsing, which was published today in De Volkskrant.

The previous coalition consisted of the labour party PvdA and the conservative party VVD (in the Netherlands they are called “liberals” but the party mainly consists of conservatives and/or those putting the interests of the markets and businesses first. Those who are liberals in that party are not social-liberals or liberal-egalitarians, but rather classical liberals). That coalition ended the possibility for citizens who have been disabled from birth to receive a life-long allowance which would keep them out of poverty (the reason being that too much use was made of it). The new policy expects disabled citizens (except those who have absolutely zero earning capacity) to find a job on the regular labour market, and the difference between their estimated “productivity-reflecting earning capacity” (hence the market-clearing wage) and the minimum wage would be paid for by the government. Some employers apparently complained about the paperwork that needed to be done. Yet another issue raised was that most disabled didn’t find a job at all – according to some estimates about 30.000 young adults currently leaving special needs education are neither working, nor in traning or school, nor are they entitled to any allowances. Guess twice who is picking up that tab, and guess twice what this does to those young lives.

So last year came the new government – still with the VVD in the driving seat, yet this time without the labour party, and instead an odd combination of the centrist liberal party D66, the centrist Christian-Democratic party CDA, and the leftist Orthodox Christian party Christen Unie. This new government wants to take the dismantling one step further – and is again targeting the most vulnerable, those who are disabled (not sure how the Christians in this coalition are explaining that to their fellow church-goers, but hey, after having been through 16 years of Catholic education I may still be wrong about what the Bible preaches).

The new proposal entails that the minimum-wage legislation will no longer hold for the employment contract of those disabled “with lower productivity”. The employer only has to pay the wage that is taken to reflect the productivity – would could be any percentage (well below 100) of the minimum wage. The worker can then apply to the state for the amount equalling the difference between the wage earned and welfare-benefit level. This implies at least five major deteriorations in the situation of the disabled workers.

First, the level of welfare-benefits is lower than the level of the legal minimum-wage. Many disabled workers who will keep doing the same work will experience a decrease in their income.

Second, the disabled have to do the paper-work to apply for the difference between the market-clearing wage and the welfare-benefits. Many disabled workers have either issues with their cognitive abilities, or have poor executive skills, or other issues that make it hard for them to do this paperwork. If the employers are complaining that they don’t want to do the paperwork, why should we burden the disadvantaged with it?

Third, in order to qualify for welfare benefits, one is not allowed to have personal savings above a very low threshold. One could argue that this is justified for those who need to make use of welfare benefits for a short period in their lives; but for the permanently disabled, this implies that they will never be able to raise above the poverty-line, and given that everybody at some point in their lives experiences some form of brute luck or makes a costly mistake, it will make them very vulnerable for falling into poverty. It is cruel not to allow people to try to save up a little bit in order for them to qualify for income-replacement that, in my view, they are entitled to on grounds of social justice, poverty alleviation and human decency.

Fourth, under this new regime, the disabled workers would no longer be able to save for their pensions to the same extent as before, since there are no pension contributions being paid for welfare support payments. They will only be saving for pensions for the ‘market-wage’ part of their income, not for the welfare-support part, whereas under the current system the employer pays pension contributions for the first part, and the state for the part that matches the gap up to the minimum wage. All other employees working for the legal minimum wage are saving for their pension – but apparently this government has decided that for the disabled there is no need to save the same amount for their old age. Quite logical, right?

Fifth, it is an insult to the disabled since they are not treated the same as other vulnerable workers who are non-disabled. That is also the argument that has been stressed by a group of disabled activists who have started a petition to ask the government to not adopt this policy.

As Herderscheê and Sitalsing rightly conclude their article, the additional worry is that once the disabled workers are under this worse regime, other vulnerable groups will follow, such as those trying to move from welfare benefits to a job. If one lets loose the principle that the legal minimum applies to all workers, then what is left of the welfare state? And wasn’t it the case that the welfare state entailed the promise that we would care for the truly needy? Well, this government’s standards of care are not my standards of care. I am appalled that it has gotten so far. And I am also still angry at the labour party – the party for the workers, for Goodness sake! – who was partly the architect of this plan, and has been a very willing contributor to the earlier fases of the dismantling of the welfare state.