ABSTRACT
The welfare state was constructed during the era of industrial capitalism to insure against the risks of male workers (Wilensky 1975). During the so-called Trente Glorieuses, the welfare state seemed to function well, contributing to full employment in standard employment relationships and declining levels of poverty and inequality in rich democracies. However, during the past four decades, we have been witnessing major socioeconomic changes, leading to an increase in unemployment, atypical employment, and poverty (OECD 2008; Standing 2009). Many observers have attributed these developments to globalization, which is said to have turned welfare states into competition states (Cerny 1997). Dharam Ghai, Director of UNRISD from 1987 to 1997, argues,
Global economic integration, within a free market context, now poses new challenges for the welfare state. The virtually instantaneous mobility of capital in unregulated markets seriously affects the capacity of governments to regulate national economies; competition for capital and markets increases pressure to adopt a low wage strategy, including a reduction in the cost of social benefits and weakening labor standards; and the twin goals of maintaining acceptable levels of employment and defending the principles of equity and solidarity seem increasingly incompatible. (cited in Bowles and Wagman 1997: 318)
