The evolution of programs for the unemployed, a central worry for
conservatives, proved particularly striking. Between 1985 and 1999,
the net income replacement rate for persons out of work was reduced
practically everywhere in the OECD, and cuts were most severe where
parties of the right were in power.^54 Conditions were also tightened.
In country after country, governments tried to better link income
support to the labor market, to help, encourage, or compel the
unemployed to go back to work. Where the right was in power, these
conditions tended to be stricter, and at times punitive, shading into
workfare. Where the left remained stronger, the measures adopted
were more likely to be voluntary and focused on training and social
inclusion.^55
Throughout this period marked by neoliberalism, the distinction
between the right and the left often appeared muted, and to some
almost irrelevant. Indeed, the right was prevented from going as far
as it would have wished by the unflinching popularity of the welfare
state; and the left was compelled to accept austerity measures by
persistently high levels of unemployment.^56 Both sides were thus
forced to adjust the welfare state at the margins, slowing its growth
and gradually transforming its mission. The way they did so, however,
proved quite different.
Parties of the right wanted to reinforce market mechanisms and to
reduce state intervention and redistribution. They were thus more
likely to advocate important cuts to the welfare state and indeed they
often succeeded. Conservatives also believed, in monetarist fashion,
that the best way to adjust to globalization and reduce unemployment
was to keep taxes low and deregulate the labor market, so as to
maintain competitive wages. Parties of the left did accept that mon-
etary and fiscal policies had become blunt tools, and they also turned
to the supply side, but they did so with distinct priorities. Rather than
lowering taxes and wages, they sought to use public investment to
enhance education and training, which they saw as the best foundations
(^54) Pontusson,Inequality and Prosperity, pp. 191–92; James P. Allan and Lyle
Scruggs, “Political Partisanship and Welfare State Reform in Advanced
Industrial Societies,”American Journal of Political Science, vol. 48, no. 3,
July 2004, 498–512.
(^55) Neil Gilbert,Transformations of the Welfare State: The Silent Surrender of
Public Responsibility, Oxford University Press, 2004, pp. 62–63.
(^56) Huber and Stephens,Development and Crisis of the Welfare State, p. 305.
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