Nordic Relief Packages and Non-standard Workers: Towards Expanded Universalism and Institutional Inequalities

Abstract

Has the Corona crisis triggered changes to Nordic social protection? We address this question by examining how Denmark, Finland, Norway, Finland, Iceland, and Sweden reacted to the crisis, which in many ways resembles a Litmus-test for Nordic social protection. Analytically, we draw on historical institutionalism, welfare, and segmentation literature. We find that although the Nordic relief packages aim to create an encompassing safety net, the reforms expose and sometimes reinforce institutionally embedded cracks in the Nordic systems around the nexus of standard and non-standard work, leading to potential layers of institutionally embedded inequalities. The Nordic countries have expanded and adjusted their existing social protection, portraying strong elements of path dependency, but with examples of novel initiatives. Their mix of universal and targeted measures appears to reflect so-called ‘expanded universalism’, where targeted measures supplement the ‘ordinary’ Nordic social protection to cover the most crisis ridden, but not necessarily the poorest, groups.

The Nordic Model: Capable of Responding to the Social Side of Crises and Sustaining Social Investment?

“…The recent COVID-19 pandemic stress-tested the Nordic model with historical drops in GDP and rising unemployment figures, where many workers lost their jobs or were temporarily laid off. This resulted in rising unemployment in the first two quarters of 2020, as illustrated in Figure 1 (see also Larsen and Ilsøe, 2022).…”

“…This is partly due to the active role of government in close collaboration with social partners. For example, the Finnish government called upon social partners to discuss emergency measures to safeguard jobs during the COVID-19 pandemic at their press conference on 16 March 2020, and the first wave of policy responses was largely based on the joint proposals by Finnish social partners (Finnish government, 2020;STTK, 2020;Larsen and Ilsøe, 2021). Across the Nordics, the relief packages were typically the result of tripartite consultations involving trade unions, employers' associations and national governments and resembled tripartite agreements, echoing the Nordic industrial relations traditions (Greve et al, 2021;Larsen and Ilsøe, 2022;Andersen et al, 2014).…”

“…There was also broad support for the relief packages in the Nordic parliaments. More specifically, more than 130 relief packages were passed to assist crisis-ridden companies and workers (Larsen and Ilsøe, 2022;Greve et al, 2021). The various policy measures were accompanied by increased social protection spending, notably in labour market policy, especially on unemployment benefits.…”

“…Through multiple relief packages, the Nordic countries increased benefit levels, temporarily expanded income protection to groups typically struggling to qualify for support and introducing novel measures (Larsen and Ilsøe, 2022;Trygstad et al, 2023). The eligibility criteria for unemployment benefits, including obligations for job-search and participation in various activation programmes, were temporarily suspended or relaxed in all five Nordic countries, enabling access to income security in case of job loss for a large number of part-time workers, fixed-term workers and other atypical workers (Larsen and Ilsøe, 2021). Specific and often novel measures were also introduced to support freelancers, entrepreneurs, artists and solo self-employed in all five Nordic countries, i.e.…”

“…Specific and often novel measures were also introduced to support freelancers, entrepreneurs, artists and solo self-employed in all five Nordic countries, i.e. groups that are often excluded (Norway) or are only partially (Denmark, Sweden, Finland, Iceland) covered by the "ordinary" income protection systems (Larsen and Ilsøe, 2022;Hedenus and Nergaard, 2020;Hotvedt, 2020;Kolsrud, 2018). To safeguard jobs, the Nordic governments, together with social partners, also broadened the coverage of their temporary lay-off schemes (all five Nordic countries) and introduced novel temporary lay-off schemes (Denmark, Iceland) along with specific measures to keep businesses afloat and to stimulate innovation and employability (Larsen and Ilsøe, 2021;Berglund, 2021; Sip- polä, 2021; Svalund, 2021).…”