Overcoming the crisis: new austerity or old neoliberal paradigm?

Austerity means were the first choice to ease the consequences of the global financial crisis. In that case, social policy tends to be understood rather in terms of expenses, not investments. However, in CEE countries one can observe a wider tendency of welfare state decomposition, reaching back to the times of the transformation. So, are the austerity measures a new approach or rather a continuation of a much older political paradigm?

The global financial crisis that started in 2009 gradually affected all European states. So far, austerity has been one of the strategies to consolidate national budgets and reduce sovereign debts. Cuts have been applied to social policy areas, such as care, education and social transfers. However, in CEE countries such as Poland the origins of the withdrawal of the state as the service provider can be traced back to the years of economic and political transformation of the 1990’s. Poland was a model case of unprecedented shock doctrine implementation: massive privatization and restructuring of the economy, liberalization of the market and redefinition of the welfare state. In a nutshell, the transformation aimed at the withdrawal of the state in favour of the free market. This also included the provision of public social services and social transfers. The transformation was tough; some regions are still dealing with it. Thus, questions emerge: Is austerity policy anything new in CEE? Or is the global economic crisis just a justification for continuing the old neoliberal drive?

Taking the provision of childcare and access to primary education in Poland as examples, one can trace the reforms far beyond 2009. The withdrawal of the state from care provision started much earlier. The number of places in public crèches diminished from 96,000 in 1990 to 37,000 in 2011. This tendency was not really reflected by the dynamics of vital statistics in reference to live births (14,3 per 1000 inhabitants in 1990 – 10,2 per 1000 inhabitants in 2011). One has to admit that early childcare was also not so popular in 1990, including only 4% of children under the age of 3. In fact, after the baby boom of the 1980’s around 30% of the places in the crèches were not used. However, the consequences of radical childcare provision cuts stroke back 20 years later when the demand outnumbered the supply [1]. Consequentially, the latest childcare provision reforms aimed at making it more accessible but less dependent from public funding. The act on care for children under 3 from 2011 introduced alternative forms of care provision for the youngest children, opening the way for commercialization, too. However, an increase of childcare provision by the private sector in the last years has not helped much as only 3% of all children attend these facilities. Crèches in rural areas constitute only 0,5% of all institutions of that kind nationwide (UNICEF, p.13).

Regarding public kindergartens, around 40% of them were closed already in the first decade of the transformation. Only in 2006 their number started to grow again (Dlaprzedszkolaka.pl), presumably also thanks to ESF funds. Still, the number of places is insufficient. According to the newest data, the rate of pre-school education for children aged 3-5 in Poland has grown and equals ca. 70%. Large differences may still be observed in relation to children’s place of origin: less children attend pre-school facilities in rural areas – 51,2% compared to 83,6% in cities (UNICEF, p.14). The situation has improved – most likely not because of the development of the infrastructure but due to the fact that since recently 6-year-olds can voluntarily attend primary schools (ca. 30% did). From the beginning of the school year 2014-2015 onwards, it will be obligatory for them. As a consequence, more existing places in kindergartens are available for younger children.

Cuts have also been applied to elementary schools. According to the Ministry of Education, between 2008 and 2012 2,037 public schools were closed (www.premier.gov.pl). However, this is not only an effect of the recent crisis.
In 1999 Jerzy Buzek’s government enacted a number of reforms to promote subsidiarity. Due to these reforms, the responsibility for primary schools and their financing was transferred to the municipal level. Facing the problems of demographic decline (in the years 1989-2011 the share of children aged 0-17 in the general population dropped by 36%), local governments tend to close small schools in low-populated areas. Sometimes they are transformed into non-public schools (“independent schools”), run by parents associations, church institutions, etc. In the years 2005-2011 almost 10% of primary schools in rural areas were closed (UNICEF, p.15). Meanwhile, between 2008 and 2013 the number of private schools increased by one third (Dziennik Gazeta Prawna, A2-3, 26.03.2013).
Focusing on childcare provision, it is also worth noticing that since 2013 voluntary parental leave of additional 26 weeks is available. This facultative part of possible total 52 weeks can be split between both parents according to their own choice. This project was warmly welcomed by young mothers – and it is primarily them using it. From July 2013 fathers have constituted only 1,5% of all parents who use it (Gazeta Wyborcza, 17.03.2014). The idea behind introducing this tool was to increase gender equality and a partnership model of labour division in households. However, there are two more hidden aspects: it somewhat helps to reduce unemployment rates by temporary replacement employment, while at the same time providing a balance for the formal childcare shortcomings by petrifying the model of so called familialization of childcare. [2]

The trend of withdrawal of the state from social services is not a new process and of course not only to be seen in CEE countries. The example of Poland is nevertheless a good illustration of its consequences. However, the general rule claims natura abhorret vacuum. If the state fails to deliver social services crucial for social reproduction such as care, education and healthcare, these services will be provided either by the free market or their burden will be shifted to the private sphere – to the families. Side effects of major cutbacks in care services are the growing difficulties of work-family reconciliation, especially affecting women as they spend more time providing care, both for children and for dependent members of the family (e.g. the elderly or family members with a handicap). Barriers for female employment are barriers for economic growth and increasing work productivity. Moreover, unpaid labour mostly performed by women might also result in their exclusion from social protection systems, at the same time making them dependent either on other family members or on non-wage sources of income. Work-life balance is thus not only important for the labour market, but the balance in social protection system as such.

The supporters of free market doctrines tend to identify public social services as redundant expenses. The basic problem is that the market follows individual profits, not collective benefits. Making services that are crucial for social reproduction dependent on market mechanisms and business cycles brings about risks of growing inequalities and discrimination of those who are not able to afford it. There is a range of special goods that serve not only the individuals, but are beneficial to the society as a whole, such as healthcare, education or social protection systems. Not by coincidence they are referred to as merit goods, not commodities. The market will always be there to offer those to whoever is willing to pay. However, this must be voluntary. The state simply cannot give up those responsibilities. Thus, the question is: Do we want to follow the path of commercialization or do we stop and think about alternatives – to support social investments that will pay back in the future. So far, cuts in public sphere have not paid back – and experience indicates: they won’t!

[1] Concise Statistical Yearbook of Poland 2001, p.248, p.579, p.249; Concise Statistical Yearbook of Poland 2012, p.272, p.126, p.269.
[2] For more see: Polakowski M., Szelewa D., Who cares? Changing patterns of childcare in Central and Eastern Europe, Journal of European Social Policy, May 2008.

Fotocredit: R/DV/RS CC BY-ND 2.0

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