Abstract
Introduction
This Special Issue of Work, Employment and Society (WES) draws together a collection of articles to explore the nature of the recent economic crisis, its consequences for work and employment and the experiences of labour within a more global context. The articles are drawn from those that had already been accepted through the standard WES refereeing process and a number of plenary contributions to the 2010 triennial WES Conference (in Brighton).
The 2010 WES Conference was set firmly against the backdrop of economic uncertainty generated by ‘global financial crisis’ (GFC), or the ‘Great Recession’ as it is called by American commentators. The crisis raises important theoretical and empirical questions for scholars of work and employment, as they strive to understand the causes and consequences of economic recession. The first obvious question relates to the specific nature of the recent recession and the extent to which it differs in any significant ways from previous downturns. Economic cycles, of peaks and troughs, would be seen as fairly conventional by both mainstream economists and more radical commentators. Yet the crisis that swept the global economic system from late 2007 was seen to be distinctive in its financial and global nature and in terms of the severity of collapse. The natural point of comparison was with the crash of 1929 and the Great Depression of the 1930s (Galbraith, 1954). The second question relates to understanding, in a more theoretical sense, the causal mechanisms of the crisis. Was it related to fundamental weaknesses and irregularities in the workings of the financial system, or were there deeper and more historical drivers, related for example to unfolding patterns of inequality or processes of over-accumulation and falling profit? As contributions to this Special Issue show, different and contested interpretations are possible (see Appelbaum and Lapavitsas in this issue). Different theoretical persuasions aside, critical commentators all point to the limitations and destructive nature of the ‘self-regulating market’, exposed so eloquently by Polanyi (1957 [1944]). The third question relates to the consequences of crisis, both immediate and longer-term. The most immediate and perhaps most tangible impact on the real economy is business closure and job loss. Yet this also needs to be examined in terms of the different responses of national governments: to what extent, for example, was state intervention able to prevent a jobs crisis? The longer-term implications are being played out through rolling programmes of deficit reduction and austerity. These programmes have implications not just for national working populations but for the global workforce at large.
The scale of crisis has been beyond debate and it has naturally gripped the world media and the political class. There has been concern with the prospects of financial ‘Armageddon’. Well established banks, such as Lehman Brothers in the USA, went to the wall and governments tried to adjudicate whether they should bail them out or let them fall. Large bail-outs took place, not just for banks, but for key sectors like automotives; large reserves were also directed to policies of financial stimulation and ‘quantitative easing’. Despite this, the voices advocating nationalistic, protectionist policies have, up until recently, been faint in a globalized world economy. The internationalization of capital has tied economies together so intricately, creating new interdependencies, that a crisis in one country, namely the USA, has had major repercussions in other economic regions across the world. Some world leaders quickly grasped this and the need for co-ordinated economic planning; although there was significant disagreement about the most appropriate measures, the levels of investment required and the policy tools needed to manage these unprecedented challenges (see Lallement, Heyes and Rubery, in this issue). The lack of consistent political co-ordination on these issues at an international level has generated further market turbulence as evidenced in concerns about the stability of the euro and at a national level in the USA over the rescheduling of their national deficit. The co-ordinated intervention strategies of states could have paved the way for a new global discourse of economic governance, but the longer-term thrust appears to be towards protecting the sanctity of self-regulating markets.
One of the immediate consequences of the credit crunch during 2008–9 was dramatic loss of jobs in the private sector, particularly in construction-related sectors and manufacturing. Firms that could not manage their liquidity or raise finance, or that faced lack of demand went bankrupt. Other firms not initially faced with the same kinds of challenges as the car sector played a ‘wait and see’ game. The headline statistics, for example in the EU-27, tells of ‘five million fewer in paid employment […] in the second quarter of 2010 than the second quarter of 2008 as a result of the economic crisis’ (Hurley and Storrie, 2011: 4). But aggregate figures mask wide variations in national outcomes. In the UK, for example, unemployment did not grow as fast or as quickly as some pundits may have expected. Many firms held on to their staff by using flexible and short-time working arrangements at first (see Lallement, in this issue). For some firms in the UK staff retention was a cheaper option than simply firing staff reactively; for others there was no choice. Germany and Belgium also experienced little by way of significant labour market turbulence, due in the main to state-supported adjustment measures. In other countries, such as the USA, job losses took immediate effect (see Appelbaum in this issue). In Europe, Ireland and Spain saw declines of 10 per cent in employment (Hurley and Storrie, 2011). Employers across the capitalist world were, then, all managing in times of uncertainty, but with different short- and long-term scenarios, and with different sets of institutional arrangements to manage this uncertainty for employers, employees and governments (see Heyes and Rubery in this issue), at both the national and the international level.
The effects in the public sector were less immediate. However, since 2008 there has been unprecedented post-war government intervention in the management of the economy, with staggering levels of public spending being used to ensure a flow of financial capital. The deficits that have accrued would, for example, have been seen as unsustainable within the parameters of economic stability that initially underpinned the euro zone, which limited annual budget deficits to no more than 3 per cent of GDP. In 2011 the prospects of Ireland, Spain, Greece and Italy defaulting on their debts created a series of destabilizing threats to the eurozone. The long-term consequences for the public sector across Europe and elsewhere are cuts in government funding and job losses, accompanied by vociferous public protests and strikes. Despite massive financial stimulus packages the climate remains one of managing uncertainty. It is not clear how much governments will be able to claw back from key public institutions in education, health and welfare, or how planned budget cuts will be implemented. But it is clear that these changes will have a serious impact on employment and working conditions across the globe.
This background informs the articles in this WES Special Issue. The articles reflect established concerns of the journal, being international, interdisciplinary and methodologically innovative. The articles have been organized into two sections. The focus of Section I is on conceptualizing the crisis and its consequences, drawing on different analytical approaches to understand the causes of the economic crisis and its implications for employment. The authors of these approaches include economists, neo-Marxists and institutionalists from economic sociology and political economy. Section II casts a wider lens to look at the use of migrant and off-shored labour in creating and controlling the global labour force. The articles look at how the focus of research on employment has moved beyond the traditional industrial areas of the northern globe to present research from Ireland, India and China, and international comparisons of migration. The analytical frameworks and methodological approaches used to understand how employment relations are changing draws on a wealth of research from quantitative, qualitative and experimental methods reflecting the innovative forum that WES provides for both new and more established researchers. The Special Issue is designed to provide a range of different theoretical and empirical insights to illuminate how firms, governments and employees have been affected by managing uncertainty. If nothing else the recent economic crisis has highlighted not only the increased interdependencies between national economies and financial systems, but also the increased interdependency in the use of the global labour force. These new forms of interdependency have also created new forms of conflict and risks to social cohesion for governments, employers and the wider public.
Conceptualizing the crisis and its consequences
The articles presented in the first section of this Special Issue reflect the theoretically contested nature of accounts of the financial crisis. For mainstream economists, the cause of the economic crisis is seen as a problem of ‘light-touch’ regulation or the impact of exogenous economic shocks. According to this approach the financial crisis was largely attributable to the unfettered effects of rampant and unrestrained lending in the subprime sector alongside the development of securitization and heightened levels of leverage ratios to lending. While he was on secondment to the International Monetary Fund, Rajan’s (2005) seminal article, Has Financial Development Made the World Riskier?, was an early predictor of the instability generated by developments in the financial sector. He argued that risk taking by financial intermediaries had created much greater access to finance for both firms and households, creating enormous wealth. However, financial intermediaries accentuated fluctuations and the risks they took made their organizations financially vulnerable. Rajan argued that more prudent supervision was necessary so that ‘market friendly’ policies would reduce the incentives for intermediaries to take excessive risks. His argument, at the time, was ignored. This was because government regulation of the sector was too closely tied to the interests of the large financial organizations benefitting from these risky and highly profitable transactions (Rajan, 2010: 180–81). More sociological perspectives have traced the historically symbiotic relationship between government regulators, the housing market and credit organizations in ensuring the financial sector grew, unfettered by too much regulation; Fligstein (2010) argues this was a form of ‘passive regulatory capture’.
Policy options to deal with the fallout of the crisis have proposed new regulatory mechanisms and a significant reform of multilateral global economic governance (Rajan, 2010). However, in the post-crisis period there has been considerable scepticism that this can be achieved, not only because of a lack of political will, but because of the incapacity of national governments to regulate bankers’ bonuses in bailed out banks (Roubini and Mihm, 2010), the limited profitability of nationalized banks in the UK and instability in the eurozone. Despite the will for change, perhaps most clearly symbolized by the election of Barack Obama, initiatives to co-ordinate macro-economic policy at the international level have been erratic and poorly co-ordinated. Appelbaum (in this issue) argues that attempts to impose a new financial order, with the emphasis of policy directed at public deficit reduction, is misguided and fails to address the vital issue of job creation and its consequences for economic growth.
Eileen Appelbaum attributes the ‘proximate cause’ of the crisis to the property market bubble. The historical underpinnings lie in increased income disparity in the USA from the early 1980s and an increased take-up of household debt by the middle- and lower-income classes. This debt was fuelled by low interest rates, lax underwriting and risky financial innovations through securitization and products such as subprime mortgages. This strategy of pooling a variety of debts and selling these on as investment bonds to insurance companies with a long-term and diverse investment portfolio allowed the banks to lower loan rates and expand borrowing, but it also exposed the banks to higher levels of risk when the housing bubble burst. The resulting jobs crisis with the highest levels of unemployment since the Great Depression has been poorly handled with inadequate policy responses. She argues that while bold measures were used to bail out the financial sector, fiscal policy through the use of tax rebates to stimulate consumption and help with jobs was timid and conventional. This has meant that while US monetary intervention has been impressive in international terms, the prospects for jobs growth has not, as America has recorded one of the steepest increases in unemployment. The reason for this, Appelbaum argues, is down to the weakness of US labour market institutions and a general lack of social protections. With little government support for firms to change the working time arrangements of employees, the cheapest option has been redundancy.
She suggests that the debate on jobs vs the deficit is erroneous. Without further fiscal stimulus and policies designed to address high wage inequality the prospects for job growth in the USA are bleak. Her article usefully highlights that the debate between Keynesian and monetarist economists is far from over. The fundamental discourse of whether or not governments should intervene in the economy, and if so how, continues to be highly contested among economists and politicians.
Lapavitsas, while taking a very different political position to Appelbaum, agrees that the proximate causes of the current crisis lay in mortgage lending to the poorest and the spread of risk from finance to production through securitization. In his critical neo-Marxist analysis, which draws from Hilfreding, he examines arguments that attribute the current crisis to one inherent in capitalism, characterized in this late stage by the slowing rate of growth, monopolistic multinationals and financialization. The contested concept of financialization identifies how profits in production have been declining, while those in finance have been thriving. However, he is critical of conventional Marxist accounts that attribute crisis to the falling rate of profit, over-accumulation or notions of fictitious capital. He is also critical of post-Keynesian analyses that emphasize the importance of the ‘rentier’ class (an importance which he argues is far from evident) as a group extracting profits due to capital shortages that have changed the balance between the real productive economy and the booming financial sector. Briefly reviewing a range of other institutionalist approaches he charges them with being eclectic, largely descriptive and lacking a theoretical base.
He proposes a neo-Marxist approach for financialization where monopoly capitals have become increasingly independent from banks in financing their own activities; they have in turn also become more involved in a broader range of financial activity. Consequently, banks have turned to lending to households and profit extraction through financial mediation, through what he calls the ‘financial expropriation’ of the income, savings, consumption and assets of workers. The retreat of public provision in terms of housing, health, education and pensions has meant that individuals are increasingly expected to provide for themselves through alternative financial products. Lapavitsas proposes examining the molecular mediating processes between finance and production in the analysis of financialization, if the concept is to have any explanatory power. These mediating processes include not only the behaviour of large firms, banks and governments but also the way it impacts on workers, their aspirations and the increasing financialization of their lives and incomes.
A third explanatory approach, drawing on economic sociology and political economy, can be found in ‘institutionalist approaches’ (Hall and Taylor, 1996; Streeck, 2010a). There is considerable variety among institutionalists in relation to the frameworks and key variables they emphasize (O’Reilly, 2006). Streeck (2010b) provides a full and very useful discussion of these debates, distinguishing between four types of institutional analysis: the social embeddedness model, the power resource model, the historical-institutionalist model and the rationalist-functionalist model. Each of these approaches gives different weight to the sources of variety between different forms of capitalism, the key actors, indicators of performance and sources of convergence.
Using this analysis to situate his critical discussion of varieties of capitalism (VoC) (Hall and Soskice, 2001), Streeck (2010b) argues that the VoC framework overemphasizes rationalist-functionalist, firm-based explanations for capitalist diversity. Drawing on the work of Polanyi he argues that capitalist development needs to be understood as a ‘“double movement”: a struggle between the forces or tendencies of commodification and of the “disembedding” of market exchange on the one hand, and those of containment of commodification, or “re-embedding” and social reconstruction, on the other’ (Streeck, 2010a: 37). This is a key point made in the contribution from Rubery (in this issue). Polanyi (1957 [1944]) argued that the market was embedded in an institutionalized social order, the form of which varied over time and space in accordance with local traditions and the political power of organized interests and associations. Streeck (2010a) argues that the financial crisis also needs to be seen as a particular historical form of social order. Its consequences should encourage us to look for similarities and interdependencies between competing national systems and it should also encourage us to look for crisis, contradiction and conflict in order to understand the nature of change. Several of these themes are developed in the contributions (in this issue) from Lallement, Heyes and Rubery.
Michel Lallement directly questions how useful the VoC approach is for understanding the post-crisis period. He explores how the crisis has unfolded in the EU context through an analysis of the variety of policy responses governments have sought to adopt to manage economic uncertainty. He suggests that European social models are more varied than the original VoC approach suggests (Kelly and Hamann, 2008); more hybrid or ‘regulated’ systems are also evident, but they have the advantages of neither the liberal nor the co-ordinated models.
In response to rising unemployment and declining economic growth, social actors have responded very differently across Europe. Employers in the liberal market economies (‘LMEs’), such as Britain and Ireland, were able to make extensive use of redundancies and wage restraint to adjust employment levels. In co-ordinated market economies (‘CMEs’), such as Germany and Denmark, an ‘intermediate’ level of employment protection acted as a bulwark against such ‘easy’ options. Instead working time reductions were collectively agreed as alternatives to redundancies. While vulnerability to unemployment has been comparatively high in the UK and Ireland, Lallement argues that the situation has been worse in countries belonging to what he calls the Mediterranean model, e.g. Spain. In such countries employment protection legislation, and the ineffectiveness of industrial and training policies, have produced a comparatively well-protected group of ‘insiders’, with ‘outsiders’ – notably young people – being relegated to temporary employment or unemployment, or what Standing (2011) has called the dangerous new class of ‘the precariat’. 1 The economic crisis aggravated the situation for precarious segments in these countries with already high levels of youth unemployment. Youth protests in the Mediterranean in May and June 2011 are examples of how frustration with this form of exclusion is taking new forms of social conflict. According to Standing (2011), the growing precariat results from the way societies have managed in the face of globalization, economic crisis and a lack of willingness to deal with long-run inequalities in advanced industrial societies. Lallement’s analysis indicates that the impact of the precariat and the degree to which it has developed varies significantly by country.
To what extent will these ‘outsider’ groups become a sustainable opposition movement to government austerity measures? Streeck (2010a) makes the point that the crisis has forced us to examine the consequences of conflict in the future as well as the contradictions between government-imposed cuts and the need to maintain social cohesion. But the form and strength of this conflict will vary between countries, depending on the extent to which labour is incorporated or dislocated from the employment system. While universal trends are sought, institutional differences are likely to remain important in understanding how the process of change and uncertainty is managed. Finding a balance between different ‘insider’ and ‘outsider’ groups is likely to be one of the most significant challenges to governments in the post-crisis period as they attempt to achieve economic and jobs growth.
Flexicurity is one policy idea that has been promulgated by the European Commission as a way to address imbalances between insiders and outsiders. Heyes explores and challenges the ubiquitous and elusive concept of flexicurity. He suggests that the economic crisis has given both the concept and the policies associated with it a strenuous test. Much of the underpinning logic is seen to be drawn from the experience of Demark and the Netherlands, which demonstrated some success in reversing high rates of unemployment in the 1990s. The European Economic Recovery Plan launched after the credit crisis emphasized using temporary measures to support employment with a long-term aim of achieving flexicurity. The Commission’s European Employment Strategy is similarly seen as promoting flexicurity, but allows states considerable latitude in developing ‘national pathways’. The policy bundles associated with flexicurity include four key pillars: flexible and reliable employment contracts for both ‘insiders’ and ‘outsiders’; comprehensive lifelong learning to enhance employability; active labour market policies to ease transitions back into work; and modernization of social security systems to provide adequate income support and labour mobility. The aims of these policy bundles have been to improve productivity, facilitate labour market transitions and improve social inclusion. However, one of the consequences of this approach, Heyes suggests, is for even greater attacks on employment protection to gain momentum. He concludes that there has been no widespread move to flexicurity. While there has been some convergence in the areas of employment and social protection the trend has been for workers to have more ‘flexibility’ and less security.
Jill Rubery also addresses the extent to which neo-liberal policies have undermined social protection. She examines whether the European social model is being deconstructed by neo-liberal arguments supporting cuts and reductions in deficit spending. Rubery argues that there is a symbiotic process occurring that requires us to take account of how the sphere of social reproduction creates new risks and strains on the economic sphere of production. Long-term challenges relating to demographic and employment trends, as well as care responsibilities that were not resolved before the economic crisis, have only thrown these key policy areas into a greater turmoil. EU governments have responded erratically to these challenges under significantly changed economic circumstances.
Rubery’s key argument is that, while certain policies clearly have been significantly cut back, the changing structure of employment opportunities and family structures creates new risks; risks that governments have been mandated by their electorate to protect them from. Accordingly, the process of deconstruction is symbiotic with a reconstruction process that leads to more hybridization of regime types than traditional comparative analysis suggests. Her analysis illustrates the points raised by Streeck (2010a) with regard to both the commonality of trends across countries and the dialectical processes of deconstruction and re-construction that occur as states respond to new sets of risks. Rubery’s perspective on the future of European social policy is contrasted with those arguing more pessimistically about the erosion of social protection, reinforced through the EU de-regulatory agenda. She argues that neo-liberal reforms are occurring in response to societal, demographic and labour market changes. These reforms include an increasing emphasis on taking any available work, an expansion of flexible employment and efforts to reduce public expenditure. However, such reforms may be ‘double edged’ according to Rubery: public childcare to encourage employment and facilitate female employment; active labour market policies to get people into jobs and off benefits.
The articles in this section bring together different perspectives on the causes and consequences of the crisis and its implications in terms of both jobs and social protection from a comparative international perspective. The articles usefully illustrate the different theoretical frameworks being used to discuss these developments, and how they focus on different dimensions of the problems created, the policies advocated and evaluation of their potential success. At a theoretical level they draw attention to the important processes of financialization that have been taking place in the global economy. Equally though, the articles show sensitivity to the need to situate contemporary effects against longer-term historical causes, such as the changing relationship between production and finance, debt restructuring, wage inequality and labour market institutions. The relationship between the financial system and the real economy was considered largely in terms of the consequences, with the proximate causes resting with financialization or the housing bubble. But historical analyses cannot escape the deep and tangible changes that have occurred in the real economy over the last 30 years, as governments have sought to create markets through deregulation and assaults on the collective power of labour. For commentators such as Nolan (2011) the root causes of the crisis can equally be located in the decline of the countervailing power of labour and the constraints available to attenuate the inherently destructive imperatives of self-regulating markets. The root cause of the crisis remains therefore very much a live debate, but also suggests that more systematic and historically grounded treatments of the crisis are required. The impact of the crisis on work and employment are possibly less contentious, but the articles suggest areas for future research as the consequences of these significant structural changes are being played out in the global economy.
Off-shoring and labour migration: creating and controlling the global workforce
The second section of the Special Issue examines more closely the construction and control of the global workforce through the lens of the experience of migrant workers and those working in off-shored businesses. The articles build on a long seam of innovative research in WES related to concerns about managerial control and the labour process, emotional labour and discrimination. The articles utilize a range of methodological approaches, from a more quantitative macro analysis from Chris Tilly about global trends, and innovative experimental research from Frances McGinnity and Peter Lunn, to more qualitative company interviews and participant observation from Verdana Nath and Thomas Peng. Together the articles make a significant contribution to established and emerging fields of scholarship in the area of employment research to address how the international organization of work is changing.
In previous global recessions, developed economies, such as Canada, the USA and Germany often responded to economic crisis by tightening requirements for migrants seeking work (e.g. the use of points-based systems), or by sending ‘guest workers’ home (Martin, 2009). The current recession with its associated slower rates of growth, at least in the most developed economies, is also likely to reduce international migration, by plan (through government tightening on migration), by default (through lower expected wages and employment opportunities that are likely to reduce migration propensities) or quite possibly, by some combination of both. Key questions are how migrant receiving governments respond to migrants who are now inside their borders and the migration policies they adopt during any subsequent recovery.
Chris Tilly’s article juxtaposes the problems set by these two pivotal issues: the global economic crisis and its implications for international migration. Given the complex and diverse nature of migration, Tilly carefully sets the parameters of his analysis in terms of North/South migration. He finds that migration flows of less skilled workers from the South coming to the North, especially flows of temporary workers, have decreased significantly. Return migration, linked to the concept of temporary economic migration, occurred where barriers to migration flows are low. The EU stands out, in particular, in this pattern, no doubt influenced by the 2004 Treaty of Accession (EU Com, 2003). This finding also gives credence to an economic interpretation of migration. However, analysis of the world’s main migration corridors finds that changes in migrant stocks are negatively associated with shifts in gross national income (GNI) per capita in receiving countries. This suggests that economic factors tell only part of the story and that social and institutional factors are also very important. These findings may also suggest that economic migration is more pertinent to migration between developed and emerging economies (e.g. between the UK and Poland), whereas social, institutional and political factors may be more relevant to developed and developing economies’ migration patterns (e.g. Japan and the Philippines).
Perhaps surprisingly, Tilly’s comparison of native and migrant unemployment overall shows little added migrant marginalization in terms of the unemployment rate. An exception to this is Spain, which has fared particularly poorly in the economic crisis and had an unemployed rate of just over 20 per cent in spring 2011. This suggests that incremental changes to unemployment may be important to understanding migrants’ experiences.
Tilly does not find widespread or systematic changes to migration policies, despite some notable anomalies, (for example, the US state of Arizona’s anti-immigration legislation, Italy’s criminalization of unauthorized migration and Ireland’s requirement that non-EU foreign workers must secure employment which pays at least E30,000 to receive a work permit). This stands in contrast to previous recessions and may reflect the changed nature of globalization and global inter-connections not just in relation to product markets, technology and foreign direct investment patterns, but also, perhaps, to the genuine increased globalization of labour and labours’ increased contribution to globalization. But this finding may also be due to the timeframe of his analysis. Some migrant workers might be happy to return home with a healthy financial balance, while others may not have that option, due to the political and economic situation in their countries that does not allow them to leave because the option of returning to the Northern economies is not available.
Tilly’s article provides a ‘macro’-level analysis of key trends in migration patterns and regulatory policy shortly after the global economic crisis. Frances McGinnity and Peter Lunn’s article provides a micro-level analysis of the experiences of migrants in Ireland prior to the crisis. Global migration to Ireland is of particular interest because it is new to a country that has traditionally exported labour. By the mid-1990s Ireland was ranked as the second most globalized economy in the world and migrants were essential to sustaining the ‘Celtic Tiger’. By 2007, 15 per cent of Irish workers were foreign, with 840,000 migrants, many from Poland and other Eastern European countries (Cullen, 2009).
The Irish experience of global recession and migration illustrates the patterns reported by Tilly in relation to migration flows. When Ireland officially went into recession in 2008, unemployment doubled between spring 2008 and spring 2009 to 11 per cent. Many of the migrants who came to Ireland during the boom years returned home. However, non-EU foreigners, especially those from African countries, were less likely to leave Ireland, even if they lost their jobs, reflecting, at least in part, that they were not guaranteed a right of re-entry. This lack of a re-entry guarantee increased the risk of any labour market movement outside of Ireland and contributed to the precarious existence faced by such migrants.
McGinnity and Lunn explore the changing dynamic of migration in Ireland with reference to how Irish employers reacted to non-Irish applicants through processes of employment recruitment. They do this through the experimental, and somewhat controversial, methodology of ‘correspondence testing’. Applicants to Irish employers with ‘ethnic names’ from African, Asian and German lineage compared to Irish applicants with the same level of qualifications. They found that candidates with Irish names were over twice as likely to be invited to interview for advertised jobs compared with candidates with identifiably non-Irish names: being non-Irish was the universal key factor in discrimination in being called for interview, with little evidence for differentiation on ethnic or racial grounds. While Tilly found important differences between the experiences of those from developing countries, particularly for those with darker skins, McGinnity and Lunn’s analysis implies that discrimination may be quite universal in the Irish context against the non-Irish. More significantly, their findings have significant negative implications for migrants, employers and for the wider economy. The skills of migrants are either not being utilized (in cases where employment is denied), or are underutilized (where migrants are forced to work in jobs that do not utilize their full potential), both of which have adverse effects for the overall productivity and competitiveness of the Irish labour market. The case is interesting as the research was conducted prior to the economic crisis and Ireland is currently a country that has experienced rapid economic change over the past 20 years. If recruitment processes were so discriminatory prior to the crisis, when the economy was booming, then we can only speculate that this will be severely aggravated in subsequent years.
But it is not only employers who exercise discrimination. Vandana Nath shows how employers respond to discrimination on the part of customers. Nath investigates how the national identity of Indian workers is managed in Bangalore call centres. Based on 77 semi-structured interviews with predominantly male frontline workers she found that employees were encouraged to adopt Western pseudonyms and ‘location masking’ as part of ‘stigma management’ to adapt their Indian identity in the face of racial abuse from customers using the call centres. While some workers enjoyed playing with different identities and accents, others found that the process of stigma management led to stress, role ambiguity and alienation. This article provides not only an original contribution to the growing debates on emotional labour, worker identity and management control, but also examples of how employers anticipate and respond to the abusive discrimination of customers. The importance of this contribution is to show how customers’ reactions act as the catalyst for this discrimination and how management attempt to ‘protect’ their workers in managing ‘corporate’ identities that are acceptable to their customers. The article highlights the nature of interdependencies in terms of customers and the organization of the labour process and forms of managerial control.
The nature of conflict, compliance and the symbiotic use of managerial control in relation to externally controlling factors are also evidenced in the contribution of Thomas Peng. Using a participant observation methodology at the Hengfa handbag factory Peng examines the regime of despotic labour control found in certain South China sweatshops. Drawing on the work of Burawoy (1979, 1985), he examines the economic, political and ideological dimensions of the labour process. Peng explains how the more relaxed nature of supervision at the plant and reduced control has been manufactured by consent generated though a game developed by workers in order to have choice over their work rate and leisure time. Avoiding unpaid overtime and gaining social time was seen to have become a personalized game with economic and social implications. Workers controlled each other and stigmatized those who were slower because it meant they would lose their leisure time in the city before returning for the factory curfew. In contrast to Burawoy’s game of ‘making out’, the workers at Hengfa were not on piece rates but paid hourly rates. However, a system of compulsory unpaid overtime for unfinished work made leisure time the reward, in what Peng describes as ‘a piecework system in disguise’. ‘Making out’ was about ways of achieving more leisure time rather than more economic rewards.
Peng argues that peasants moved to industrialized zones because they wanted to achieve a better life but they frequently faced the problem of local discrimination. Employees’ need for residential status as ‘inner-migrants’ under the hukou (household registration system) influenced the labour process because of workers’ need for personal security provided by the company through dormitory accommodation and an evening curfew enforced by security guards. His fascinating account explains how and why inner-migrant workers accepted the strict curfew arrangements as a way of providing for their security. His key argument is that the local state’s definition of the hukou system and the residential working status it conferred made workers dependent on the protection provided by the company and the games generated greater intensity of work and higher productivity. These developments present a new set of challenges around issues of inequalities, insecurity, changing forms of organizational practice and regulation; issues which have their roots in the traditional concerns of employment researchers, but where the research is being carried out in new global locations.
Conclusions
Some of the key themes that have come out of the articles in this Special Issue have identified three core concepts for future research: interdependency, conflict and control. The financial crisis has clearly shown how intricate international interdependency between financial organizations has had deleterious effects on the world economy. But interdependency is not only about money, it is also about people. The articles in Section II clearly illustrate the vast flows of migrant labour across the globe, the impact of racial discrimination among migrants and off-shored workers and how the economic crisis is likely to exacerbate this. They also illustrate how the interdependency of workers in one country, providing services to customers in another country, can affect the forms of conflict and control in the way firms manage their employees down to the level where managing voice and identity are legitimated as ways of ‘protecting’ employees from racial, emotional or physical abuse.
The articles show that conflicts can occur between call centre workers and their customers and also between rural migrants and those indigenous to growing industrial areas. One aspect not really addressed in the articles is the nature of future conflicts around employees’ strike actions and protests in response to the budgetary cuts being implemented as a consequence of the global economic crisis. Nonetheless, it is clear that potential new forms of conflict, as a consequence of growing interdependencies and uncertainties, are occurring at the local, national and international levels.
This leads to the concept of control, which has received considerable attention in the study of work on the labour process as well as in comparative research on corporate governance. What the crisis has highlighted has been the decoupling of national governments’ abilities to enforce control over the self-destructive and anarchistic actions of self-interested actors in the financial sector. While the banks were more than grateful to be bailed out of the crisis, they were more than resistant to having regulatory constraints imposed upon them, or even having minimal requirements to monitor bonus payments to their staff. The concept of control can be seen to operate at different levels. Ranging from Rajan’s (2010) proposal for a radical reform of international economic governance, and the ability of national governments to maintain social cohesion as part of their democratic mandate to protect against new social risks, to the micro level of how firms seek emotionally, aesthetically and physically to control and ‘protect’ their workforces.
The key concepts of interdependency, conflict and control are central to a long stream of research on work and employment. This Special Issue examines how these concepts are being redefined in the light of international debates and the movement of world markets for finance and employment. These concepts take very different forms in locations of research that were not part of the traditional remit of industrial sociologists 20 or 30 years ago. The articles in the Special Issue provide fresh insights into understanding the uncertainties created by the destructive and potentially creative nature of ‘self-regulating markets’ and their impact in this recent crisis period. Polanyi’s (1957 [1944]: 132) historical analysis focused on the struggle (or double movement) between two organizing principles, that of economic liberalism (and the commoditization of labour, land and money) and the processes of social protection that sought to protect society from the potentially destructive outcomes of markets. Ultimately, at the time Polanyi was writing, these processes were seen to lead to reactionary and radical forces in the forms of fascism and communism played out at the end of a bitter global conflict that went beyond the 1945 settlement. But central to his analysis were the inevitable failure of markets, the need for alternatives and the pursuit of freedom in what was becoming an increasingly de-imperialized, global and complex society. The initial political response to the global crisis since 2007 suggested the potential of a new international regulatory order and ‘alternatives’, but neo-liberal faith in the virtues of self-regulating markets appears to have re-asserted itself. The key issue this raises, even for mainstream economists, is the lack of international co-ordination in managing economic uncertainty on a global scale. For sociologists concerned with the organization of work and its repercussions on the people who live this daily experience, it raises the question of the certainty they can have about the stability of incomes they are able to obtain to support their families at home and abroad. The effects of this uncertainty and the swingeing axe of deficit reduction will be played out in the years to come. However, markets are always part of a wider social order and with those effects will come new risks, conflicts, counter mobilizations and attempts to form cooperative solutions, compromises and new systems of regulation. Such movements will feed future research agendas.