February 25, 2012 by SocProf and tagged Book Reviews, Globalization, Ideologies, Labor, Neoliberalism, Precarization, Public Policy, Risk Society, Social Change, Social Inequalities, Social Stratification, Sociology
Arne Kalleberg‘s Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States, 1970s to 2000s is a very clear and detailed examination of the evolution of the labor market in the United States over the past 40 years, deepening the precarization conceptual framework presented in his 2008 ASA presidential address.
“Work in America has undergone marked transformations in the past four decades. Globalization and deregulation have increased the amount of competition faced by American companies, provided greater opportunities for them to outsource work to lower-wage countries, and opened up new sources of workers through immigration. The growth of a ‘new economy’ characterized by more knowledge-intensive work has been accompanied by the accelerated pace of technological innovation and the continued expansion of service industries as the principal source of jobs. Political policies such as the replacement of welfare by workfare programs in the 1990s have made it essential for people to participate in paid employment at the same time that jobs have become more precarious. The labor force has become more diverse, with marked increases in the number of women, non-white, older, and immigrant workers, and growing divides between people with different amounts of education. Ideological changes have supported these structural changes, with shifts towards greater individualism and personal accountability for work and life replacing notions of collective responsibility.
These social, political, and economic forces have radically transformed the nature of employment relations and work in America. They have led to pervasive job insecurity, the growth of dual-earner families, and 24/7 schedules for many workers. More opportunities for entrepreneurship and good jobs have arisen for some, while others still only have access to low-wage and often dead-end jobs. These changes in have, in turn, magnified social problems such as poverty, work-family conflicts, political polarization, and disparities by race, ethnicity, and gender. The growing gap between ‘good’ and ‘bad’ jobs represents a dark side to the booming American economy of the 1980s and 1990s; it has contributed to a crisis for the middle class in the United States in the past decade.” (1)
Every point in this quote then is developed in a full chapter, with a solid amount of empirical data to support the claims of generalized precarization. And all the points mentioned above also highlight an idea that I try really hard to convey to my students: nothing ever happens by chance in society. Things as they are – in this case, more bad jobs and increased precarization and risk shift – are the product of a variety of decision-making processes in various social institutions, shaped by ideologies (Kalleberg identifies neoliberalism here). And here we are, with massive changes in labor relations and work structures, operating under different norms. As a result, we work longer, in worse jobs, with less security and stability, reduced control over work activities and lower compensation.
Kalleberg also uses my favorite framework (Structure / History / Power or SHiP) to note that precarization used to be the norm until the end of the Great Depression. It is only the laws enacted during the 1930s that changed that normal state of precarity for workers. And economic conditions improved considerably during the post-War “Great Compression” until the late 1970s. This is a familiar story.
But what exactly are good/bad jobs? For Kalleberg, a good job is one that:
- Pays relatively well and provides for increases over time;
- Provides decent benefits;
- Provides workers with some degree of autonomy and control;
- Provides workers with some degree of flexibility and control over scheduling and terms of employment;
- Provides workers with some degree of control over termination of the job.
Whereas a bad job is one that:
- Pays low wages with limited prospects of improvements over time;
- Provides limited benefits if any at all;
- Does not enable workers to exert control over work activities;
- Does not enable workers to have flexibility;
- Does not enable workers to exert control over termination of employment.
This dichotomy used to be the basis for the well-known dual-labor market theory. Good jobs were part of the primary labor market and bad jobs of the secondary labor market. Kalleberg argues that this labor market structure holds less and less as more good jobs are turning into bad ones (creating what Kalleberg calls a ‘subordinate primary labor market’) although the polarization still somewhat holds. And as the quote above notes, he identifies two major dynamics: (1) the impact of economic, social and political forces that shape social institutions and (2) the changes in the composition of the American workforce, namely, diversification. In other words, what we observe is not the product of uncontrolled market forces but of conditions that led to greater pressure for flexibility in an institutional environment where employers could take advantage of the typically American weakness of labor unions, compared to other Western countries.
These structural changes also led to changes in corporate governance, promoting a short-termist mentality where managers were now expected to manage the short-term bottom line for investors using a new tool at their disposal: human resources, as in investing less in them in favor of short-term profits, which meant the rise of non-traditional labor arrangements based on loose ties and limited loyalty between employers and employees. This was facilitated by the fact that the government progressively reduced its intervention on the labor market (can anyone name one thing done by the current secretary of labor in this administration?).
At the same time, right-wing think tanks worked hard to push for their favorite ideology: individualism, which, in turn, led to risk shift from companies and firms to individuals and households, individualization and a general sense of “you’re on your own.” This ideology provided the moral background for the dismantling of the social structures that had underpinned the post-war economy and its institutions.
The diversification of the American workforce meant that more vulnerable workers were entering the labor market, stimulating the growth of precarious and insecure jobs. This diversification also contributed to greater overall inequalities. Kalleberg notes specific consequences:
“First, education has emerged as the great divider between persons with good jobs and those with bad jobs. The workforce has become more polarized along education and skill lines due to the increasing number of highly educated college graduates, as well as the expansion in the population of low-skilled workers, such as immigrants from Mexico with weak English and less than a ninth-grade education.
Second, workers with relatively low-skills and education – such as nonwhites, the foreign-born, and older workers – are more vulnerable than others to these structural changes. [...] This has encouraged employers to create jobs that pay poorly and are generally of low quality, since they now have access to a pool of workers who are willing (or forced) to work for low wages and in poor conditions: women, young people, older workers, less-educated workers, immigrants.
Third, the growth in labor force diversity has increased the variety of job rewards that workers seek to obtain from their jobs. The increase of women and the associated proliferation of dual-earner families in the labor force, along with the growth in educational attainments, have altered the kinds of rewards that people feel are important in their jobs. This growth has also shaped workers’ expectations for the kinds of rewards they feel entitled to obtain. In particular, many workers are now more likely to place greater importance on having more control over their work schedules and flexibility in their work times.” (57-8)
This increased flexibility has also been easier to implement in the growing service industries. But this has led to occupational polarization (between good jobs and bad jobs) thanks to (1) variation in skills required in diverse occupations, (2) a growing difference in the collective market power of occupational groups (power generated by unions or professional gatekeeping mechanisms such as certifications and accreditation), and (3) the increased power of managers by virtue of their control over human capital as resource.
Another factor in the growth of precarization is corporate restructuring. On this, Kalleberg argues that firms have choices between low-road strategies (de-skilling jobs, subcontracting, outsourcing, etc) and high-road strategies (investing in employees, for instance) when facing economic transformations. Most firms in the US have chosen low-road strategies, developing the core-periphery model of employment, with a limited and declining core of permanent workers, working on the firm’s core competencies, as opposed to peripheral workers (fully precarized, often outsources, managed by temporary work agencies, with no expectations of permanent employment and no ties to the employer beyond the contract duration; this includes all the non-standard work arrangements).
The novelty here, as Louis Uchitelle demonstrated in his book, The Disposable American, is that these have become common management strategies, more or less irrespective of economic conditions. Lay-offs and outsourcing and downsizing happen in recessionary as well as expansionary periods.
This leads to leaving workers at the complete mercy of market mechanisms. It is up to individual workers to maintain their skills and improve their social capital to, in turn, improve their employability. This also has multiple features:
“First, open employment relationships sever the psychological contract between employers and employees in which stability and security were exchanged for loyalty and hard work: the employee would exchange his or her loyalty and commitment in return for employers’ promises of job security, earnings and growth, and opportunities for advancement. The psychological contract was characterized by mutual trust and expectations about each other’s obligations and duties. Employers are now likely to terminate the employment relation if business conditions warrant cutbacks through practices such as downsizing, in an attempt to enhance effectiveness, short-term profitability, and other outcomes.
Second, the market-mediated or open employment relations are characterized by a breakdown of the post-World War II social contract between capital and labor.
The demise of the old psychological and social contracts is reinforced by a normative context that legitimizes a more individualistic relationship and a decline in collective power. There is also a general decline in job security for all workers due to shifting norms of the employment contract. Employers are now less likely to be able to promise their employees security since their organizations are themselves more insecure. Employers may also not be inclined to offer employees security in exchange for loyalty and hard work since norms regarding the nature of the employment relationship have changed, and there are more options for employers to hire workers on an as-needed basis, such as through temporary help agencies and contract companies. There thus has been a decrease in the norm of lifetime employment with an employer.
The third feature of the market-mediated or open employment relationship is a transfer of risks away from employers and toward workers.” (84-7)
And one of the consequences of this demise has been more fully analyzed in Richard Sennett’s The Corrosion of Character, whose title clearly depicts the psychological impact of this shift. And this precariousness which used to be limited to the secondary labor market has now spread and become more generalized, to all sectors of the economy and to more occupations and professions.
So, what is to be done in this context of deterioration of working conditions and employment relations?
Kalleberg suggests that what is needed is a new social contract to restore some forms of social security. For instance, the concept of flexisecurity, implemented in a few European countries combines flexibility of the labor force with strong social safety net as workers can be expected to keep shifting from job to job, therefore needing assistance and training. At the same time, the public sector should be source of more secure jobs. There is a need for a global social movement in favor of economic fairness and greater social security. Precarious labor, as neoliberal success, has been built on the ruins of traditional labor organizations. New social movements must emerge with global, national and local activist strategies.
This book is especially relevant because the current recession with its onslaught of austerity measures clearly illustrate the risk shift: while banks and others in the corporate sectors receive government monies and other protections against risks they took, workers are bearing the brunt of this structural adjustment policies that make them shoulder the price of systemic shock. But the current situation is the culmination of a trend started forty years ago, slowly and progressively, and now brutally implemented in its final stages all over developed countries, where the few remnants of social safety nets are being dismantled by national governments.
This book makes it clear that this was a long time coming and here we are.