Challenging the Market

Challenging the Market: The Struggle to Regulate Work and Income

Copyright Date: 2004
Pages: 400
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  • Book Info
    Challenging the Market
    Book Description:

    For two decades economic and social policy in most of the world has been guided by the notion that economies function best when they are fully exposed to competitive market forces. In labour market policy, this approach is reflected in the widespread emphasis on "flexibility" - a euphemism for the retrenchment of income support and social security, the relaxation of labour market regulations, and the enhanced power of private actors to determine the terms of the employment relationship. These strategies have had marked effects on labour market outcomes, leading to greater vulnerability and polarization - and not always in ways that enhance worker-centred flexibility. The authors offer a more balanced analysis of the functioning and effects of labour market regulation and deregulation. By questioning the underpinnings of the "flexibility" paradigm, and revealing its often damaging impacts (on different countries, sectors, and constituencies), they challenge the conclusion that unregulated market forces produce optimal labour market outcomes. The authors conclude with several suggestions for how labour policy could be reformulated to promote both efficiency and equity.

    eISBN: 978-0-7735-7202-7
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Acknowledgments
    (pp. vii-2)
  4. 1 Challenging the Market: The Struggle to Regulate Work and Income
    (pp. 3-30)

    Most people must work in order to meet the material requirements of their lives, and hence work is a central feature of human existence. That work occurs in many different forms, in a variety of places and settings, incorporating various techniques and tools, and in the context of differing relationships with others. Work can be both a necessary evil – something that people do mostly because it provides the material basis for other, more enjoyable activities – and a meaningful and worthwhile activity in its own right. But in either case, one’s work is an essential and central feature of...

    • 2 The nairu, Labour Market “Flexibility,” and Full Employment
      (pp. 33-50)

      The concept of the non-accelerating inflation rate of unemployment (nairu) has proved very influential, currently dominating much of macroeconomic analysis and feeding into and constraining economic policy-making in a number of countries. Macroeconomic analysis defines the nairu as that level of unemployment, determined on the supply side of the economy, that holds inflation steady. The nairu determines (in the long run) the level of economic activity, and so aggregate expenditure in the economy has to conform to that level, or inflation will escalate. At a policy level, the theory behind the nairu has been especially influential in the setting of...

    • 3 The Causes of High Unemployment: Labour Market Sclerosis versus Macroeconomic Policy
      (pp. 51-74)

      The economies of western Europe remain afflicted by high and intractable rates of unemployment. European Union unemployment averaged 9.6 per cent between 1993 and 2000, while the rate in the smaller (eleven-country) euro zone was even higher (averaging over 10 per cent). In stark contrast, U.S. unemployment was much lower through the last decade, averaging barely 5 per cent from 1993 through 2000 and touching a thirty-year low of 3.9 per cent in September 2000.

      This divergence has sparked a great debate. One side claims that Europe’s rigid and sclerotic labour markets are incapable of adjusting to technological advance and...

    • 4 Institutions and Policies for Labour Market Success in Four Small European Countries
      (pp. 75-94)

      This chapter discusses the labour market success of four smaller European countries in the late 1990s. It first describes the dimensions of this relative success in terms of their labour market and macroeconomic performance and then outlines the main factors that help to explain this good performance.

      During the last 20 years the conventional wisdom has held that the European labour market is sclerotic, in stark contrast to its dynamic U.S. counterpart. The United States experienced higher growth in employment and markedly lower unemployment than Europe. Despite growth rates in gross domestic product (gdp) that have been comparable with U.S....

    • 5 Challenging Segmentation in South Africa’s Labour Market: “Regulated Flexibility” or Flexible Regulation?
      (pp. 97-118)

      In response to increased pressure from business, and the growing economic and political crisis of the late 1970s and the 1980s, South Africa’s apartheid government began introducing trade liberalization, privatization, and deregulation.¹ It aimed these policies at increasing flexibility in the labour market and promoting the expansion of the small business sector. This move towards labour market deregulation took three forms: legislative change, administrative exemption, and a steady decrease in the monitoring and enforcement of labour legislation. These changes eroded workers’ rights by facilitating workplace restructuring intended to create a cheaper and more flexible workforce. One result of deregulation and...

    • 6 The Russian Reforms and Their Impact on Labour: A Transition to What?
      (pp. 119-134)

      When the Soviet Union imploded and embarked on its capitalist reforms in 1991, there were high hopes in many quarters. Both internationally and within the Soviet Union, the most widespread view was that the changes would usher in an era that combined democracy and freedom with increased efficiency and growth and that greater prosperity and well-being would soon emerge for most people. The reforms would finally provide some relief for – in the paternalistic language of the international community – the “long-suffering” Soviet people.

      Although most observers agreed that there would be some dislocation and short-term pain during the transition,...

    • 7 Deregulating Industrial Relations in the Apparel Sector: The Decree System in Quebec
      (pp. 135-150)

      Practitioners, academics, and policy makers generally agree that the legal and institutional framework regulating industrial relations in a democracy should ensure reasonable wages and working conditions; allow firms to be efficient, profitable, and competitive; permit unions and managers to perform their respective roles; and finally promote industrial peace (Hébert, 1982). Legislatures rarely leave the labour market completely unregulated, and in most countries employers must at least abide by minimum standards. Thus labour law regulates both the conditions under which the individual contract is determined for the non-unionized worker and the framework under which workers can organize and bargain collectively with...

    • 8 European Labour Market Regulation: The Case of European Works Councils
      (pp. 151-172)

      Recent developments within the European automotive industry, in particular the decision of General Motors (gm) to eliminate jobs in Germany and the United Kingdom, Ford’s European restructuring strategy, and bmw’s breaking up of the former Rover Group, indicate the inability of Europe’s trade unions to control the meanderings of multinational corporations (mncs).¹ In fact, faced with the threat of even more closures and layoffs, trade unionists may become unwitting accomplices in the internationalization of production. With unions forced at times into concession bargaining (Hancké, 1998, 2000), such agreements further undermine the “embedding”² power of nationally oriented industrial relations over capital...

    • 9 Racializing the Division of Labour: Neoliberal Restructuring and the Economic Segregation of Canada’s Racialized Groups
      (pp. 175-204)

      Canada’s economy and its labour market are increasingly stratifying along racial lines, as indicated by disproportionate representation of racialized group members in low-income sectors and low-end occupations, under-representation in high-income sectors and occupations, and persistent racial inequality in unemployment rates, employment income, and the incidence of low income. This stratification has numerous adverse social effects, leading to differential life chances for racialized group members. Racial segregation in the labour market occurs within the context of the restructuring of the global economy, the shift towards neoliberal forms of governance, labour market deregulation aimed at flexible labour deployment, and the persistence of...

    • 10 Towards Perfect Flexibility: Youth as an Industrial Reserve Army for the New Economy
      (pp. 205-226)

      Labour market conditions for young people have deteriorated over the past twenty years both in Canada and in other oecd countries. The experience of Canadian youth is not unique. The precise percentages may vary between countries, but the systematic deterioration of labour market conditions for young people is fairly widespread within the oecd area. Where possible, this chapter provides comparative data to contextualize the Canadian situation. Given a widely shared experience, the explanations for the labour market situation of young people are likely to be general rather than country-specific.

      This is true even if, as this chapter argues, public policy...

    • 11 The Crisis in Rural Labour Markets: Failures and Challenges for Regulation
      (pp. 227-245)

      This chapter examines the spatial dimension of labour market restructuring and the failure of policy to meet the needs of non-urban workers. How are labour market deregulation and reregulation affecting employment relationships and the well-being of rural workers, families, and communities? This chapter explores these questions, drawing on insights from economic geography and feminist political economy into the spatial and gendered contours of restructuring. Evidence for Canada as a whole, as well as examples from ongoing research on Atlantic Canada, provide preliminary answers.

      The geographical analysis of restructuring has tended to concentrate on the national level and on issues within...

    • 12 Technology, Gender, and Regulation: Call Centres in New Brunswick
      (pp. 246-264)

      “New Brunswick is the call centre capital of North America,” declares a glossy government brochure. Boosterism aside, the claim highlights the rapid emergence of a new industry in the province, which started a decade ago and now employs about 20,000 people in more than 100 call centre locations.¹ Currently, one worker in every 20 in New Brunswick works in a call centre; most are young, and they are predominantly women. Call centres – or “customer contact centres,” the industry’s preferred designation – have been a major source of employment growth in recent years across Canada and internationally. According to a...

    • 13 Neoliberalism, Social Democracy, and the Struggle to Improve Labour Standards for Part-time Workers in Saskatchewan
      (pp. 265-286)

      Western working classes have waged a long struggle to improve working conditions and social welfare through labour market regulation.¹ In the nineteenth century workers and social reformers in Western countries fought for legislation prohibiting child labour, producing such victories as the Factory Acts in the United Kingdom. There were struggles for 12-, 10-, and 8-hour workdays. In the 1930s labour in Europe and North America even campaigned for a 30-hour workweek. This never came to pass, but by the 1960s and early 1970s sociologists and others devoted considerable attention to the shifting balance between work and leisure. For example, the...

    • 14 Labour Market Deregulation and the U.S. Living-Wage Movement
      (pp. 289-308)

      Among industrialized nations, the United States has conducted perhaps the premier experiment in labour market deregulation. Over the past few decades, federal, state, and local governments have pursued strategies designed to weaken labour market institutions and to increase the power of capital relative to labour, all in the name of economic growth. This broad trend has included failure to increase the federal minimum wage in line with consumer prices, elimination or reduction of social safety nets such as Aid to Families with Dependent Children (afdc), further privatization or contracting out of public services, and failure by courts to recognize and...

    • 15 Gendered Resistance: Organizing Justice for Janitors in Los Angeles
      (pp. 309-329)

      Employers are increasingly distancing themselves from workers through the use of subcontracting, labour market intermediaries, and self-employed contractors. This restructuring marks a break with the post–Second World War compromise between labour and capital, mediated by the state, which secured a “family wage” for (white, citizen) male industrial workers but never included most women and many immigrant and racialized men. Economic restructuring transforms social reproduction, as employers seek to minimize their contributions to the health and social welfare of workers and their families, and as governments deregulate, or regressively reregulate, labour migration. These restructurings loudly announce the need to move beyond...

    • 16 Labour’s Current Organizational Struggles in Argentina: Towards a New Beginning?
      (pp. 330-345)

      Despite a quarter-century of political turmoil and far-reaching policy shifts, Argentina has failed to produce a viable pattern of economic and political development.¹ Argentina initially attempted after 1976 what became known in Latin America as “neoliberalism.”² Following the end of the dictatorship in the 1980s, a debate originally over the nature and stability of democracy gave way to growing concern with the magnitude and implications of economic decline. During the 1990s the government consolidated neoliberalism. The subsequent crisis that unfolded in 2001 reflected not only the failure of neoliberal restructuring, but also government’s increasing detachment from public demands for a...

    • 17 Critical Times for French Employment Regulation: The 35-Hour Week and the Challenge to Social Partnership
      (pp. 346-364)

      Why regulate capitalism? The British socialist philosopher and historian R.H. Tawney (1929: 251) put the case succinctly: “Power over the public is public power; nor does it cease to be public merely because private persons are permitted to buy and sell, own and bequeath it, as they deem most profitable ... The question ... is whether the public possesses adequate guarantees that those [economic movements] which are controllable are controlled in the general interest, not in that of a minority.”

      While this chapter is about France, it is also about the fundamental issues raised by Tawney. For the conflict sparked...

    • 18 How Credible Are International Corporate Labour Codes? Monitoring Global Production Chains
      (pp. 365-384)

      Credibility is the critical element in codes of conduct. Without it, the promises contained in a code are hollow and the credibility of the company falters. (United States Department of Labor, 1996: 9)

      It is not enough to establish tough rules. We must ensure that they are enforced, and that American consumers know they are being followed. That is why the apparel industry is forming a special association to make sure companies and contractors live up to the Code of Conduct, using independent monitors. (U.S. President Bill Clinton, quoted in Schilling, 2000: 234)

      We live in an era of market...

  9. Contributors
    (pp. 385-388)