4. Conclusions
At present, European welfare states and labour markets have to deal with major
pressures, which derive both from economic and social transformations. Among these
we emphasize the changes on the employment relationship and the high and persistent
levels of unemployment. Recent developments suggest that promoting the integration
of all in the labour market is becoming more and more difficult and incorporates
new risks (even for individuals with stable, full-time, permanent jobs) thus
creating additional difficulties to the social protection systems. Different welfare regimes
adjust to the changes in the economic, social and demographic environment
quite distinctively (Ferrera et al. 2000; Hemerijck 2005; Kleinman 2002: 13)39. While
some countries seem to address the new challenges without betraying its core commitments
others are more likely to suffer from and/or aggravate the negative consequences
associated with generous/expansionary welfare states (e.g. economic rigidities,
political immobilism, social exclusion) (Ferrera et al. 2000; Kleinman 2002). As we
explained in the paper, recent developments affecting both the Portuguese labour
market and welfare state indicate that, at the same time the risks and costs of belonging
to a rapidly changing, highly competitive international environment rise, the existing
social protection structures continue to be insufficiently prepared to respond, for instance,
to less secure jobs and growing unemployment. We are convinced that the political
failure in overcoming internal structural problems40, the implementation of labour
market reforms characterized by imbalances between flexibility and security,
together with a deteriorating employment situation and a negative macroeconomic
scenario consolidate the disparities and weaknesses of the Portuguese welfare state.
By saying this, we emphasise that historical and institutional legacies do influence the
way (different) Welfare States deal with (new) external and internal pressures. In the
case of Portugal, these legacies represent additional constraints41, particularly when,
as it is happening now, structural changes are occurring in the labour market and an
economic and financial crisis is occurring at the international level. Thus, although we
agree with the idea that no radical change is affecting, in this case, the Portuguese welfare
state, there are signs of “a broad, albeit slow moving, process of policy change”
(Hemerijck 2005: 14). This process is the result of changes in environmental conditions
and the use of resources that enable policy actors to respond to unexpected changes
that, from the Portuguese recent experience, allow us to envisage the consolidation of
the “southern syndrome” as Martin Rhodes puts it (Rhodes 1997: 15). Thus we contend
that, in spite of the reforms introduced in the 1990s (e.g. the introduction of a
basic safety net, the launch of new active labour market policies, significant reform in
pensions and social security matters) and the above-average employment performance
reached by the end of the twentieth century, the Portuguese welfare state is
nowadays failing to address the problems that derive from international competitiveness
and post-industrial changes as well as endogenous challenges. This idea contradicts
the analysis of the Portuguese experience presented by Ferrera, Hemerijck and
Rhodes in the beginning of this century that considered Portugal as one of the successful
examples of the Southern welfare regime (Ferrera et al. 2000: 53)42. In our opinion,
the downturn in the Portuguese performance lies, namely, on the absence and/or
incomplete structural reforms undertaken and, perhaps in some cases, to the inadequacy
of the chosen strategies to resolve the problems of economic performance.
Being a small country, with an economy particularly open to external trends and
regulations, Portugal is nowadays in a particularly vulnerable situation to respond to
the impacts of the globalization processes, related, namely, with the integration of fi-
nancial and product markets worldwide and/or the transference of capital and production
abroad, as well as to the constraints imposed by EMU. In order to overcome some
of its labour market structural problems and to adapt to the changing socioeconomic
circumstances, Portugal needs to readjust its model of economic specialization43
. This
means that it is necessary, for instance, to promote the development of high-tech and
knowledge-intensive sectors and, simultaneously, to upgrade the skills and education
levels of the Portuguese labour force. These require the implementation of structural
reforms that, as we know, take a long length of time, since they depend on the evolution
of institutional behaviour, which is traditionally very slow, and must be successful
and undertaken without delay, since the ones introduced until now proved to be
rather tenuous. Additionally, the persistence of low paid and precarious forms of employment
represents additional risks, affecting some groups of workers more deeply
(e.g. women, young people, long-term unemployed) for both the social protection system
and the labour market performance and thus jeopardizes the country’s position in
the international “world-system”. In Portugal, the balance between job security and
increased labour mobility needs to be (re) established in order to reduce the risks of
reinforcing the group of the “working poor” as well as labour market dualism. For now,
the noteworthy increasing levels of unemployment and inactivity as well as the raising
number of precarious jobs, not only are a clear sign of the labour market structural
weaknesses, as they represent to the welfare state new and additional demands. Due,
namely, to the financial constraints with which it is currently confronted there is a high
risk of diminishing the social policies efficiency at the cost of the workers well being
and/or their entrapment in social exclusion and poverty situations. In our opinion, this
risk is aggravated by a widespread pattern of hidden unemployment in the EU countries,
a phenomenon, as we can testify from the Portuguese recent experience, underestimated
by official statistics. To conclude, we emphasize that some of the negative
consequences of the ongoing trends and political options are already being felt by the
Portuguese society and force us to envisage a pessimist scenario characterized by the
reinforcement of social and economic inequalities, or to use the French expression, a
society “à deux vitesses” and the peripheralization of the Portuguese economy and
society for the following years.