Essential Features of France as a Welfare State - Essay Example

France as a Welfare A welfare can be defined as a way of government in which the plays a very important role in ensuring the economic and social welfare of its citizens. Usually, a welfare state is run on the principles of equality of opportunity, equal distribution of money and resources and a feeling of public responsibility to help the needy. In France, it seems that the notion of ‘welfare state’ means social protection. This is so because the nation has adopted such a way of ensuring social protection that is delivered by a combination of government and voluntary public services. In France, social protection is developed on the basis of the concept of solidarity. This fact is very evident from the first article of the French Code of Social Security. In order to achieve this solidarity, the nation has adopted the strategy of developing and extending solidarities. The beginning of the welfare state in France can be traced back to the first half of the twentieth century; and since then, the means and institutions adopted by the Government in introducing welfare state was Bismarckian in nature. That means the efforts were to introduce social insurance through old age pensions, accident insurance, medical care, and unemployment insurance. As a result, the social insurance strategy in France first appeared in the form of employment insurance. In order to provide welfare, there are organisations called la securite sociale. This system ensures income maintenance, healthcare, and personal and social services. The second important point is that in France, all benefits are earning-related. That means the entitlement to benefits is based upon ones record of contribution in the past. As Palier (2006) points out, in France, the welfare system has various programmes ranging from health care, old age pension, family and unemployment insurance, and the entire system is organised outside the government and managed by social partners. However, the most important feature is that the funding for social welfare mainly comes from contributions by employees and employers as the concept of mutuality is highly stressed. For example, 66% of the money for social security schemes comes from the contributions made by employers and employees to social security. Also, 21% of the income comes from various taxes and contributions including the general social contribution that is decided on the basis of household incomes. Social security contributions are not considered as taxes but are mandatory payments to be made by the self-employed, employees and employers alike in order to enjoy the benefits of social security. As Spicker (n.d.) points out, there are five different social security contributions made by the citizens. They are sickness-insurance-maternity-disability-death, old age, widowhood, accidents and solidarity contribution for autonomy (ibid). In addition are the various taxes including the general social contribution (CSG). The CSG is a mandatory tax that is used to support the Retirement Solidarity Fund (FSV) and health insurance family benefits. The CSG is payable by all residents in France, and it amounts to nearly 7.5% of the earned income, annuities, capital gains, and investment. It can be seen that the French social security was more Bismarckian than Beveridge in nature as it stressed more on insurance for workers than widespread solidarity in the very beginning. However, as time passed, one can see a considerable shift towards solidarity. At first, as Dutton (2004, p. 2) points out, the social protection system was introduced in the form of a system of social insurance that benefited in case of a loss of income due to accident, sickness, unemployment or old age. This system only benefited the workers and their families. The benefits were based on the contributions one made during his or her employment (ibid). However, as time passed, the stress has been more on solidarity; or the inclusion of all into the system. Since 1945, the Social Security Administrations have been trying to ensure social protection to all the people in the territory. As a result, every citizen in the nation has the right to enjoy a minimum standard of living irrespective of whether he is working or contributing to the welfare. The way the social protection is organised is rather interesting. It seems that the government plays a major role in the system by providing necessary regulations and supervision of the system. Under the government, there are four levels of social protection. The first one is the Social Security Administrations that are managed by the social partners. There are four important schemes offered by these administrations. They are general scheme, special scheme, agricultural scheme and autonomous scheme. The general scheme covers employees, students and residents, and the special schemes are aimed at public sector servants. Agricultural scheme ensures the welfare of farmers and agricultural workers; and lastly, artisans, merchants, industrials and liberal professions all benefit from the autonomous scheme. The next level is the complementary schemes that are aimed at providing additional coverage to issues already covered under Social Security. While some of these schemes like supplemental pension plans are mandatory, the remaining like mutual health insurance is optional. The third level is the National Union for Employment in Industry and Commerce. This system is responsible to manage the unemployment insurance scheme. Another important feature is the role of trade unions and employers’ representatives. In other words, the system is special for its social integration of workers for social peace. It was believed by the leaders in 1940s that it is necessary to ensure participation of the workers in national decision-making in order to ensure social peace; and thus, the system called ‘la democratie sociale’ arose that allowed the collaboration between workers and employers in the management of social protection system. Presently, the Social Security Administrations are run by representatives of both employees and employers. These administrations are solely responsible to manage the Fund and to recruit and manage staff. Thus, this system ensures proper incorporation of the interests of the employers and the trade unions n the national decision-making, which, in turn, leads to more peace and solidarity along with security. The benefits of this system are obvious. First of all, even when there is financial crisis, the government does not want to cut social benefits as such a move would result in conflict with social partners and the citizens. While some nations had to cut social benefits and others had to introduce measures like salary cuts, France managed to adopt the easiest way by raising social contributions. As it was known to both employees and employers that the contributions directly go to welfare, there were fewer issues than most other welfare states faced. However, this does not mean that France managed to continue with its ever-escalating welfare expenses. It had to introduce reformative measures to manage the financial crunch. For example, as Mandin and Palier (2002) point out, it introduced the Allocation Unique Degressive (AUD) which replaced all other unemployment insurance benefits; and this new system offers unemployment insurance benefits for a limited time of 30 months, and the amount decreases with time. In the health sector to, the government has been trying to control the uncontrollable rise in demand for health care. An example is the decision to elaborate the medical care agreement known as convention medicale. This agreement helps in controlling budget by setting a provisional target for the evolution of the health care spending. In addition is the decision that if the social partners fail to reach an agreement, the State can replace the social partners. Thus, even if the State tries to introduce such measures, one can see that there is no intention to lose its image of a Bismarckian welfare state. Though the state has been forced to control welfare measures because of the economic slow down and the consequent unemployment, the decisions are taken only after proper negotiations with political parties and social partners. In fact, the State has to do so because both the contributors and benefactors are the same people and also because the fund comes in the form of contribution instead of taxation. Thus, even the reform efforts are a democratic process. Another vital point is that though there is decline in financial condition, the efforts have been to strengthen the philosophy of solidarity and mutuality. That is, people are urged to contribute more to the welfare measures instead of giving up welfare measures. However, despite all these efforts, one can see that the coverage of social insurance is shrinking as fewer benefits are offered. Also, the number of people covered is getting more limited in nature. That means, the efforts to ensure inclusion have failed; and this situation has given birth to new criticisms that the state has failed to reduce social exclusion. One can see three important factors of this system as responsible for the failure along with the economic crunch. Palier (2006) summarises them as; the contributory nature of social benefits which results in social exclusion; the pressure of social contribution which results in reduced job creation; and reduced responsibility and poor management as a result of the joint management system by social partners (ibid). In total, it becomes evident that France managed to survive through these years because of the growing economic condition. The combination of Biskarckian and Beveridge system adopted by the nation ran successfully for nearly half a century. However, the present day economic crunch has resulted in such a wide gap between contribution and expenditure in the welfare measures. As a result, the government has been forced to step back from its inclusion principle and again adopt exclusion strategies to manage the system. References Dutton, PV 2004, Origins of the French Welfare State: The Struggle for Social Reform in France, 1914-1947, Cambridge University Press, USA. Mandin, C & Palier, B 2002, ‘Welfare reform in France, 1985-2002’, pp. 1-45. Viewed 13 March 2012 Palier, B 2006, ‘Farewell to Bismarckianism? Welfare reforms in France’, Draft paper. Minda De Gunze Center for European Studies, Harvard University, pp. 1-25. Spicker, P n.d, ‘The welfare state: An introduction to social policy’, Viewed 13 March 2012, Read More