Netherlands: An “employers’ paradise”

But tide begins to turn as workers startto take action

“Power of employers is unassailable”. No, these are not the words in an obscure Marxist publication, but the headlines of a remarkable article in the Dutch national daily paper, De Volkskrant, on 30 November. Normally, these truths are carefully hidden in the capitalist media, as they might lead to undesired conclusions. Perhaps the most surprising thing is that a major newspaper has made this fact public knowledge. The fact that they can be so open about it shows that they think there is no chance of any opposition arising. It is an irony that the date of publication was also the day of one of the first protests of the trade unions in the Netherlands against the government’s austerity, attended by about 10,000 people. The situation in the Netherlands deserves some further explication.

The headline “employers’ paradise” is genuine, and the article in the national daily offers a series of arguments. It explains that all political parties, except the racist PVV and the opposition Socialist Party, favour the rule of the employers. Any coalition government is subservient to them. The Labour Party, which won the elections in September 2012, is solidly on their side. Municipal and European elections in 2014 might stir up some trouble and show the lack of support for the present austerity coalition of Labour and Liberals, but the election results pose no real threat to the government on a national level.

It must be noted that the previous government, which included the PVV, also favoured the employers and their cuts. It must also be said that a coalition government including the Socialist Party would not pose any real dangers to the employers. The Labour Party, which would inevitably be included in such a coalition, would see to that. The SP leadership is entirely convinced of “the need to compromise”.

The article in “De Volkskrant” goes on to explain that as far as taxes are concerned, the employers have nothing to fear either. Taxes on companies make up only 6% of state income. And next year, it will go down to 4.8%. The government is offering tax breaks to companies so they can write off their losses after the credit crisis through tax deductions. Businesses’ profits are at a high level. They have a total of €162 billion in savings according to the central bank. The Netherlands is the world’s second largest international tax haven. This is why major companies like Starbucks, Google, and the Rolling Stones have their headquarters in the Netherlands. Their money is safe in this country.

The third reason for Holland being an employer’s paradise, according to the article, is that trade unions have been weakened. After an internal struggle in the Dutch Trade Union Federation (FNV), and a major reorganisation, bureaucrats loyal to the Labour Party gained the upper hand in the summer of 2012, just before the Labour Party’s election victory. But the position of the unions as a whole has been weakened. The employers had a choice: finish off the unions or restore some credibility by negotiating with the new leadership. After a long period of deliberation, they opted for the second option and reached a so called “Social Agreement” with the unions and the present government. For the employers, it is important to secure ‘moderation’ in the trade unions and to have a leadership that they can do business with. The opposition in the unions, which sympathises with the Socialist Party, is being pushed into the background. The employers ensure that the “social peace” of the previous thirty years continues.

The fourth factor is wage “moderation”. In the early eighties, the employers and the unions concluded the Wassenaar Agreement. Its essence was that the unions would keep wages down in exchange for jobs that the employers would create. Of course they only jobs that employers created were part-time jobs (for women) or low paid jobs in the service industry. Jobs in industry with decent wages and facilities like pensions were massively destroyed. The success of thirty years of wage moderation is now a major problem for the Dutch economy. The export sector has recovered to a limited extent, but the internal market is a disaster. With credit limited, and huge cuts in public services, the low level of wages means permanent depression for the market inside the Netherlands, the main base of the economy.

Some bourgeois economists argue for higher wages to solve the economic problems. They point out that the recovery in the thirties was quicker than at present. But the employers remain opposed because, as they say, it would hurt the export sector. Minor growth in the export sector was recently responsible for a ridiculously small GNP increase of 0,1%. The government declared the end of the recession immediately, but of course nobody believed it. Especially, as the OECD predicted a new decline of the Dutch economy in 2014 the next day. The “Volkskrant” article concludes that “the political and ideological hegemony of the employers is so deeply rooted that it is almost self-evident”.

It must be admitted that it is hard to present a more realistic picture of class society in the Netherlands than in this article. Like other European countries, the economic prospects are dismal. Years, perhaps decades of stagnation and mass unemployment lie ahead on the basis of this system. The rule of the employers in the Netherlands may be unassailable at the moment, but this is all they have to offer. They may have ‘total victory’ right now, but lack of growth and prospects will erode their authority. They are the emperors of an economy that will only revive when zombies come back to life.

In the Dutch media, there is limited criticism about the situation. Sometimes, they point out that cuts hurt the economy, there is a certain amount of criticism of open racism, there is some attention given to the situation of foreign building workers who build tunnels for the state and the media have recently paid attention to the rise of poverty. In the major cities, 15% of the population is poor. 850,000 people in total are poor (43% of these have a job) and there are an additional 400,000 children in poverty. But reporting these situations does not change them. Unemployment is set to peak in 2018 at around 10%. This would mean that mass misery continues for more than ten years after the beginning of the crisis.

The left in the Netherlands is isolated at the moment. The unions and the Socialist Party are the object of ridicule and declared of irrelevant. However, despite expulsions and many activists leaving the party, there are some pockets of resistance inside the Socialist Party. The left in the unions has suffered a setback, but the co-operation at the top with the Labour Party is eroding as the government is implementing new cuts that violate the “Social Agreement”. This has forced the trade union leadership into a campaign for real jobs and higher wages. The Socialist Party could not stay aside when a small demonstration against austerity was called by several minor organisations on the left. That demonstration gathered 5,000 people in September. The trade union demonstration to start the campaign for real jobs and higher wages gathered 10,000 people on 30 November. This was the largest trade union protest in years.

At this protest, recent trade union successes were highlighted. There have been victories by cleaning workers; the position of distribution workers in the retail industry has been strengthened; there was a wage increase in the metal sector after several strikes and workers in home care have avoided being sacked massively thanks to union action. This means there is an increase in working class activity. Though it will take time to rebuild the labour movement, actions for higher wages and better conditions point the way forward for the unions. These will in turn inspire others to fight back and to turn the tide on the race to the bottom. Socialist ideas and a socialist programme can play a crucial role in developing resistance. The employers fall from paradise is about to start!

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