11 September 1995

Doc. 7377

CONTRIBUTION

by the Social, Health and Family Affairs Committee

to the enlarged debate of the Assembly

on the activities of OECD in 1994

by Mr GUSENBAUER,

Austria, Socialist Group

1.       Ms Durrieu's report ( Doc. 7348) concentrates on four items, the second on unemployment, was of particular interest to me personally. The Social, Health and Family Affairs Committee is currently preparing a report on the World Trade Organisation, which was Ms Durrieu's third item. I would stress the importance of co-ordination for the preparation of the WTO Ministerial Conference in December 1996 and the Ministerial Conference on the role of social protection on the eve of the third millenium, which OECD is also planning for 1996. The Parliamentary Assembly should be able to present its views at both these events and must prepare itself accordingly.

2.       The report on the activities of the OECD in 1994 contrasts with previous years; its tone is more optimistic because the economy recovered slightly, albeit to different extents in different countries, in 1994. However, it then concedes that unemployment has decreased very little and is unlikely to drop much further, because economic growth alone cannot provide a comprehensive solution. The globalisation of the economy is singled out as one of the causes of the current unemployment problem.

3.       OECD is advocating a fresh approach to social welfare and a reform in the social welfare institutions. However, it considers that weakening solidarity and social cohesion in the community would be no solution, as this would cause insecurity and social tension. A number of pointers are provided on the direction such change should take in the "OECD Jobs Study - Implementing the Strategy". OECD resolutely recommends "reducing the generosity of pension benefits and/or increasing pension contributions or other tax rates" and "broadening the base of direct taxes by reducing or eliminating exemptions".

4.       OECD will be holding the aforementioned Conference in 1996 on the role of social protection on the Eve of the Third Millenium, in order to finalise a strategy. The Social, Health and Family Affairs Committee would like to be invited to attend this conference.

5.       I have referred to the "OECD Jobs Study - Implementing the Strategy". Is it not paradoxical, in the absence of any prospects of reducing unemployment, at the same time, to advocate a higher pensionable age and denounce the "unemployment trap", where unemployment and other welfare benefits are too high to provide any financial incentive to take paid employment?

6.       OECD is a great supporter of flexibility:

      - Wage flexibility is needed so that employers can, for instance, adapt pay to market fluctuations; we must therefore eliminate all the obstacles, including the legal minimum wage, and pay young workers less than the standard wages.

      However, a study produced by the Trade Union Advisory Committee to the Organisation for Economic Co-operation and Development (TUAC-OECD) shows that the implementation of such measures does not achieve the desired results, and it has been calculated that a 20 to 25% reduction in the minimum wage would only provide 2 to 4% of new jobs.

      - Contracts of employment should be more flexible, making it easier for employers to break them; yet where such measures have been implemented no new jobs have been created.

      - Unemployed persons should be flexible in terms of geography and posts applied for: in other words they should be able to be moved around like commodities.

      The conclusion to be drawn from this study is that the negative flexibility approach has plainly failed and that only the effect of any further undermining of social welfare and employment arrangements would be to further disrupt the social fabric.

      - Working hours should be flexible.

7.       During this Session the Assembly will have to pronounce on a report on working time which recommends that governments adopt framework legislation on this matter to enhance the flexibility of working arrangements, though this would also involve reducing worktime.

8.       The flexibility advocated by OECD is aimed at lowering overall labour costs, for example by annualising weekly working hours, so that overtime need no longer be paid but can be compensated with additional leave, although no mention is made of reducing working time.

      We already made this point last year, and also regretted that no thought had been given to reducing working time as a means of reducing unemployment.

9.       This raises the question of the importance which is attached to the actual concept of work.

      It is interesting to note that ethnological and anthropological studies examined by managers, state that the work concept is by no means universal and that it is apparently superfluous in many societies

10.       Even more interestingly, either this concept is completely non-existent but at the same time we find the notions of "toil", "suffering", "exertion" or "endeavour", or else the semantic field extends far beyond mere production to cover a range of ritual, intellectual and manual activities.

11.       Some might consider this to be a digression, but in my view OECD's conception of work, which is in fact still the standard one, is based on the idea of the inevitability of work. Surely it is time we accepted that the workers should be the first to gain from the use of the new technologies and the consequent increases in productivity.

12.       In other words, as long as work is a prerequisite for obtaining a place in society we must do our utmost to combat unemployment. But we must also prepare ourselves, and the public, for a change in our approach to time management.

13.       Conclusions

      I feel obliged to repeat a number of observations which I have already made in the past. I wonder what action the OECD actually takes on the recommendations made to it by the Enlarged Assembly, and would request that the OECD report annually on the follow-up to these recommendations when presenting the report on its previous year's activities.

      I therefore propose the following amendments to the draft resolution:

      - Add to the end of paragraph 7.i.:

"... , by adopting outline legislation on working time with a view to reducing it and making it more flexible."

      - Add a new sub-paragraph i. to paragraph 9 worded as follows:

"i. invites the Organisation to report annually on the action it has taken on the recommendations of the Enlarged Assembly;".

      - Add to the end of paragraph 9.iii.:

"... in co-operation with the Parliamentary Assembly of the Council of Europe".

      - In paragraph 10.i replace the words "and hopes they will be successfully concluded in the near future" by the following:

"and invites the Organisation to speed up relevant procedures as also requested by OECD Ministers in their recent meeting in Paris".

      - Replace paragraph 10.ii by the following:

"invites the Organisation to strengthen its support for the process of transition in other countries of East/Central Europe as well as in the Russian Federation and to consider for future membership in OECD those most advanced that will be able to comply with requirements of OECD membership".

      - In paragraph 10.iii, 3rd line, after the word "investment" insert the following:

"as well as unqualified adherence to the social, political and economic values that have brought OECD's present membership together".

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Reporting committee: Committee on Economic Affairs and Development (Doc. 7348)

This contribution was approved by the Social, Health and Family Affairs Committee on 7 September 1995.