Despite the argument that the Western European welfare states are largely intact, there has been a major shift. Social citizenship has been redefined from status to contract. In place of the Marshallian concept that social rights are based on legal citizenship alone, entitlements have been replaced by rights and obligations. True, for the large majority of the population not much has changed. They earn their living in the paid labor market; they pay taxes; they contribute to the basic insurance systems – health care, unemployment, pensions, and disability. When they get sick or retire, the social welfare state is available. The change has occurred for the more marginal people – the long-term unemployed, the socially excluded. To obtain welfare benefits, they are required to engage in workfare.

At the conclusion of the last chapter, I raised the issue as to how successful these policies are so far, based on the available evidence. In this chapter, I turn to various policies and proposals designed to reform both the labor market and the welfare state. Social exclusion is both dynamic and multi-dimensional. Certain structural conditions have to be met. The socially excluded cannot be re-integrated into society via the paid labor market unless there are jobs, primarily in the private sector but also public jobs if necessary. These jobs have to be good jobs, not the US low-wage jobs.