Rebalancing the Welfare State: A necessary Adjustment

The debate surrounding the latest coalition agreement‘s impact on the welfare state is ongoing. While some view it as an attack on social safety nets,a closer examination reveals a more nuanced reality. This commentary aims to delve into the complexities of this issue, providing an objective analysis informed by expert opinion and recent developments.

A Context of Shifting Dynamics

It is undeniable that the Netherlands, like many developed nations, faces challenges in balancing the demands of a robust welfare state with the need for economic growth and sustained public services.
Prior to the recent government changes, the country experienced a period of declining economic performance and a rising dependence on social benefits.

“There was a time when we failed in both areas. While we were able to congratulate ourselves with our low poverty for decades, we had dropped into a medium-performing country in the decade before the coronacrisis. We hardly did better than Poland.If it was about getting and keeping people working,we were a total disaster. We scored worse than Bulgaria,” observes social policy expert Ive Marx.

A Period of Positive Change and New Challenges

Recent government initiatives have led to a significant reduction in poverty levels. However, the nation’s employment rates remain stubbornly low.

“The money pouch opened.the benefits were greatly raised. the decrease in poverty has been spectacular in the last five years. The previous government has always remained remarkably modest,” says Marx.

Despite this progress, the budget situation is precarious. “But there are still far too few people at work. The budget situation is now dramatic. If we still want considerable pensions and health care that name worthy in ten or twenty years, then more is needed than what is now on the government table,” cautions Marx.

Addressing the Employment Gap

the new coalition agreement aims to increase employment by implementing measures that encourage work while reducing reliance on social benefits. This includes:

• ending Unlimited Unemployment Insurance: For individuals under 50, the duration of unemployment benefits will soon be capped. This change signals a shift in policy, emphasizing the importance of active job seeking and workforce participation.
• Modifying Long-term Disability Policies: The government proposes reforms to the long-term disability system,aiming to curb inappropriate claims and ensure individuals recieve support aligned with their capabilities.
• Pension Adjustments: Incentives are introduced to encourage people to work longer, with adjustments to the pension system designed to make continued employment more financially appealing.

Balancing Compassion with Responsibility

While these measures are designed to promote economic growth and financial sustainability, their potential impact on vulnerable individuals raises vital ethical considerations.

“Does this new coalition agreement not exhale any distrust towards everyone on benefits? Yes, there is something of that,” acknowledges Marx. “There is a revanchist tone in it: you have been pampered long enough, something like that. The coalition agreement is full of the commonplaces, genre ‘a job is the most important guarantee against poverty’, although we know that there are quite working people in our country who are not making ends meet. They deserve better. To begin with, they earn some respect, especially now that a tax reform that name worthy is not coming,” he continues.

It is crucial to recognize that not everyone on benefits chooses to reside there out of laziness. Complex societal factors,such as limited access to education,inadequate childcare options,and regional economic disparities,can create barriers to employment.

“But there too is one of them. There are really people who prefer a benefit over work. There are reasons for that. there is indeed work for them, but that work is frequently enough uncertain and not very attractive. It is sometimes far from home, and that in a country were trains and buses do not run half the time. But speak with an OCMW or VDAB employee with some years on the clock and you will hear numerous stories about people who are really not eager to get started. Also because they then lose all kinds of social benefits or fear losing,” notes Marx.

Finding Solutions that Work for Everyone

The challenge lies in striking a balance between providing a safety net for the most vulnerable and encouraging active participation in the labor market.

As Professor Godfried Engbersen, a leading expert on social assistance, once observed, “If the welfare state is dear to us, we better start with it: face realities. Like this: there are too few people working and too many people live on benefits.”

Moving forward, it is essential to implement comprehensive policies that address the root causes of poverty and unemployment. This includes investing in education and training programs, providing affordable childcare options, and creating a more inclusive and equitable labor market.

Only through a concerted effort can we build a society that provides both economic security and opportunities for all its members.

Wanting to ensure economic security for all citizens, how can policymakers implement reforms that promote work while adequately supporting those in need?

Rebalancing the Welfare State: A Necessary Adjustment

Archyde interviews social policy expert ive Marx to discuss the complexities and challenges of the Dutch welfare state.

Context of Shifting Dynamics

Archyde (A): The Netherlands faces challenges in balancing the demands of a robust welfare state with the need for economic growth and sustained public services. How would you assess the country’s social and economic performance prior to the recent government changes?

Ive Marx (IM): Prior to the recent government changes, it was clear that we were facing important challenges. While we could once take pride in our low poverty rates, our economic performance was declining, and we experienced a rising dependence on social benefits. We weren’t doing better then countries like Poland or Bulgaria in terms of employment rates, which was alarming.

A Period of Positive Change and New Challenges

A: Despite recent improvements in poverty reduction, there’s still concern regarding employment rates. Could you comment on this progression?

IM: The previous government made significant strides in poverty reduction by increasing benefits, leading to a remarkable decrease in poverty levels. Though, we’re still far from where we need to be in terms of employment. the budget situation is critical, and we must address this to ensure the sustainability of our pensions and healthcare system.

Addressing the Employment Gap

A: The new coalition agreement introduces measures to increase employment.Could you elaborate on thes changes and their potential impacts?

• Ending Unlimited Unemployment Insurance: IM: This change encourages active job-seeking and workforce participation, especially for individuals under 50. it’s a significant shift in policy that aims to promote economic activity.
• Modifying Long-term Disability Policies: IM: These reforms aim to curb inappropriate claims and ensure that individuals receive support aligned with their capabilities, reducing the burden on the system.
• Pension Adjustments: IM: Incentives are introduced to encourage people to work longer, with adjustments to the pension system designed to make continued employment more financially appealing.

Balancing compassion with Responsibility

A: While these measures aim to promote economic growth, they also raise crucial ethical considerations. How do you think these changes will impact vulnerable individuals?

IM: There is a sense of distrust towards those on benefits in this new coalition agreement, which can be felt in its ‘revanchist’ tone. However, it’s crucial to recognize that not everyone chooses to reside on benefits due to laziness. Complex societal factors, such as limited access to education and inadequate childcare options, create barriers to employment.

Finding Solutions that Work for Everyone

A: the challenge lies in striking a balance between providing a safety net and encouraging labor market participation. What steps should we take to address the root causes of poverty and unemployment?

IM: We must invest in education and training programs to provide individuals with the skills they need to secure stable employment. Additionally, affordable childcare options and a more inclusive labor market are essential for creating opportunities for all.

A thought-provoking question for our readers: How can we ensure that our welfare state provides both economic security and opportunities for all its members, without fostering dependency or resentment?