Pension Reform Awaits Landmark Ruling And/Or Referendum

I know this is starting to look a bit like Groundhog Day, but I’m afraid it cannot be helped. As of tomorrow Slovene labour unions led by Dušan Semolič will be collecting 40 000 signatures necessary to hold a referendum on the recently passed pension reform.


Wars are not won in the battlefields but in the temples – Sun Tzu (Constitutional court, source)

So we will have not one but two referendum bids, the other one trying to kill the law on menial work. While both laws are a part of “reform legislation” the pension reform is obviously crucial, which is why the government is doing everything in its power to impede this latest referendum. And with good reason too, as the unions made it abundantly clear that they will draw no punches in this fight. As a result both sides are now tangled into a complicated multi-sided tug-of-war where a whole lot of players who have their own agendas might get sacrificed as pawns in a much larger game called The Relative Stability of Public Finances.

In fact it is quite possible that some sacrifices have already been made. The one thing PM Borut Pahor and labour minister Ivan Svetlik must avoid at all cost is to make the referendum on pension reform a referendum on the current government. Which is precisely what labour unions leaders are aiming to do. Should the succeed, the pension reform would be as good as dead, especially with the government’s popularity points being at an all-time low, barely reaching mid-20s.

So it seems (and I am being cynical here) that plan B, which is being implemented just in case, is to make the people vent as much anger as possible before the referendum on pension reform comes up and possibly make proponents of the referendum look bad for wanting the referendum in the first place. Case in point being the referendum on RTV Slovenia which PM Pahor basically fore-fitted and left minister of culture Majda Širca to fight her own battle. The same might very well go for the referendum on law on menial work, especially since both referendums will – should the proponents collect the necessary signatures – be probably held only a week apart, with a vote on menial work first and pension reform second, by which time the voters just might have vented enough. Combined with an effective PR onslaught the government might just barely make it.

So, this looks like plan B (if it exists at all, that is). What’s plan A? Not having a referendum in the first place.

Namely, the government has asked the Constitutional Court to rule whether the referendum on pension reform is constitutional in the first place. The argument goes along the line of pension reform being necessary if Article 50 of the Constitution (the right to social security). In other words, if the pension reform is nixed on the referendum, then the state cannot fulfil its welfare role any longer, hence an unconstitutional situation would occur. Additionally, the state will also try to argue that the pension reform is a question of state budged, as the law on referendums prevents holding a referendum on several issues, one of them being the budget.

Obviously the unions will claim the above is not worth a pair of fetid dingo’s kidneys, despite the fact that they will be told that the government increased the minimum wage when crisis struck for real and that it should be the unions who should compromise this time around.

Can the government pull it off? Unknown. This will be a landmark decision by the Constitutional court. Should it side with the government, this will really take the wind out of unions’ sails and pave the way for a speedy adoption of the rest of the reform package (or whatever is left of it). On the other hand, should the court deny the government and the referendum goes fort, then the government is back to plan B (insofar it even exists) and then hope that people will vote against their instincts and support the pension reform.

And while we’re on the issue, many people – including some whose opinion pengovsky values – think that the reform, such as it was passed is not really a reform. Which is probably true. What we have here is a very watered down version of the original proposal which probably ensures solvency of the pension fund for the next decade or so (that’s two-and-a-half terms) and then the whole thing will start all over again. But maybe combined with everything else, this might give this country just enough of a kick to eschew falling down. Whether this will be enough to break the gravity pull and go for the stars? Well, things and projects are brewing, but they have little to do with welfare state. That’s more of a innovation thing.

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Referendum On The Law On Menial Work: A Case Of Assisted Suicide

As of yesterday the Student organisation of Slovenia is collecting 40 000 signatures needed to hold a referendum on the recently passed Law on Menial Work. Yes, another referendum is looming, the second in as many months and god-knows-which in the entire history of this country. This is the same law that sent students (and pupils) to streets on 19 May last year and produced the final proof that on the whole they are a bunch of irresponsible brats who generally can’t tell their ass-hole from from their ear-hole. Case in point being the said referendum which is a) un-fucking-believable and b) stupid.


Student protests gone sour in May 2010 (source: the Firm™)

Starting with a) I’m amazed at how leaders of the student organisation have the balls to do anything but sit quietly in the corner and do as they’re told. I mean, whatever clout they had with the “grown-up” politics and the general public, they’ve lost it last May as far as I’m concerned. There you have an organisation and its various branches and dependencies with combined yearly budgets of about 16 million euro (no, it’s not a mistake), there’s no real oversight and almost zero consequences in case of any wrongdoing. But then a demo goes bad and rather than trying to contain the situation they split the scene and blame everyone else. So much for responsibility and cojones. And yet, once the dust is settled and miraculously no one is even forced to resign (let alone charged with endangering public safety or something like that) those very same people go for a referendum? What is this? Some kind of a Vaudeville act?

But it does not stop there. Not only is this latest referendum bid (while perfectly legal) very dicey from an ethical point of view. It is also b) one of the more shining examples of shooting oneself in the knee we’ve witnessed in the past year or so. And with that in mind it is little wonder that the student organisation enlisted help of labour unions. Hey, why fuck yourself when you can get ass-rammed by others and be treated to a dirty sanchez.

Namely: The law on menial work (malo delo, link in Slovene only) will largely overhaul student work in Slovenia which has in recent years become more or less the only form of employing young people, especially in the private sector. The problem, which soon became common to tens of thousands of young people was, that despite having worked more or less full time for years on end, this did not officially count as experience, nor did it add towards their retirement age. Since the state paid for student’s social security, the pension fund was none better off and therefore student officially had zero years of working experience. And since most companies required at lest a couple of years’ experience even for entry-level jobs, you can see where this leads to: one big vicious circle, where young people can’t get a job, as a result can’t get regular income, as a result of that they can’t get a loan with the bank and are thus unable to gain any firm footing of their own, creating the unhealthy environment of ever longer stays at mama-hotels.

That labour unions are assisting the student organisation in their self-destructive enterprise is a deviously Machiavellian act which is aimed at maintaining the status quo, i.e.: keeping the students at bay, obstructing their entry into the real labour market as much as possible. In other words – while the student organisation is committing suicide on the students’ behalf, the labour unions are happily assisting. Though it may seem otherwise, students have no representative in this is debate. The only one who possibly cares for their interest is the government with this law, but one shouldn’t be fooled into thinking that this is some kind of random act of human kindness. The law is a necessary element of shaking up the labour market and benefits it brings to the students are only a side-product of a larger enterprise.

What we have here is a situation where labour unions have long stopped representing “class interest” and are now only representatives of an ever-thinning group of people who want to retire as soon as possible, not caring about successive generations. Student organisations are also keen on keeping the status quo, primarily to maintain a cosy source of financing via “student agencies”, employment agencies dedicated exclusively to students, where they took a cut from every student’s income for “providing him/her with work”. If anyone is creating added value in this country, it is the high-skilled low-wage workforce (mostly students) but they are cannot expect any mid- or long-term rewards, thus only exasperating the problem of ever worse social security. But no one is speaking on their behalf, although everyone pretends to.

This is not an ideal law. Should it be enacted, the students will face increased job competition, because the unemployed and pensioners will compete for jobs previously held exclusively by students. However, the upside is that now the time spent working will count towards everyone’s pensions and work experience, students included. Furthermore, there will be no need to artificially extend student status (as was the accepted practice for the last twenty years) in order to be able to get work through “student agencies”, thus possibly radically reducing the amount of time people spend at the university. Right now it takes people seven-to-eight years on average to graduate in what is usually a four-to-five-year course.

So in general, students will be better of in mid- and long-term while they will quite probably be able to compensate short-term drawbacks by being better educated and more flexible than the competition of unemployed 45-year-olds or retired 65-year-olds, not to mention the fact that students probably wouldn’t touch the old farts’ jobs with a ten-foot pole in the first place.

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