Conference on The Future of Work, Employment and Social Protection
Annecy, January 18-19, 2001
Transformation of Work and Employment and New Insecurities
Eileen Appelbaum
Research Director
Economic Policy Institute
1660 L Street, N.W
Suite 1200Washington, DC 20036
United States
Introduction
Thank you for inviting me to participate in this conference on "The Future of Work, Employment and Social Protection."
The issues raised at this conference are of the utmost importance to all of us who examine economic, social, and
technological developments through the lens of their effects on the lives and living standards of working people. It is a
pleasure, and a privilege, for me to be here.
My task today is to provide a diagnosis of the main changes in the industrialized economies during the last 25 years that
have given rise to a transformation of work and employment, and to new insecurities. It is a daunting task, fortunately
made easier by the strict limits on the length of the paper and the time allotted for my remarks. The constraints force me to
focus on four major developments, that I am sure are quite familiar to you, and to which I know that you have also given a
great deal of thought. I hope, however, that you will find something new and stimulating in the way I characterize these
developments and in my analysis of how they contribute to the new insecurities.
The four horsemen of the transformation of work and employment are often identified as globalization, contingent or
precarious jobs, paid employment of married women, and technological change. But these are very broad influences on
work and employment, with the potential to create new opportunities for workers as well as to make their situations more
insecure. To focus attention on the relationship between these trends and the new insecurity experienced by workers, I
propose to focus on these trends, but to recast them more narrowly. In my remarks today, I will address these issues by
concentrating on the internationalization of production processes, the decline of the standard employment relationship, the
marginalization of care work, and the ubiquity of digital technology.
While my remarks today will explore the ways in which these trends have contributed to the insecurities of workers, I
remain optimistic about the possibilities for a more secure and less anxious future. As I discuss each of the trends leading
to greater insecurity in the present, I will try to suggest a policy agenda that could diminish, or even eliminate, the
economic uncertainties that workers face. In concluding my presentation, I will suggest a basis for organizing workers to
achieve these policy reforms.
Let me turn now to a discussion of each of the four key trends in the transformation of work and employment, and the new
insecurities they generate.
The Internationalization of Production Processes
In the U.S., which has had a sustained and growing trade deficit, discussions of globalization and worker insecurity have
focused on the effects of trade on workers. Gross imbalances in trade began in 1980. The trade deficit has continued to
deteriorate, and this year it is equal to almost 4% of GDP. Economic theory suggests that the expansion of trade under
these circumstances will lead to a loss of manufacturing jobs, a rise in income inequality and to wage stagnation. Indeed, a
preponderance of evidence in recent economic studies finds that between 10 and 40 percent of the increase in wage
inequality in the U.S. in the 1980s and 1990s can be explained by trade.
Job loss and stagnant or falling wages have certainly contributed to the insecurity of U.S. workers. But this is largely the
result of grossly unbalanced trade and a cumulative trade deficit over 20 years of $1,715 billion. Trade, itself, may not be
the culprit.
But there is another aspect of globalization that I would argue is of great significance for workers in the industrialized
economies and that contributes to new insecurities regardless of whether trade balances - the internationalization of
production processes by multinational companies. This is the first of the four trends contributing to the new insecurity that
I want to discuss. (Endnote 1)
In the last 25 years, multinationals have become almost stateless enterprises, merging across international borders and
moving production locations about from country to country in a relentless effort to minimize production costs or escape
regulatory constraints. These companies exhibit remarkably little concern for the interests of their many stakeholders - the
workers, communities, and government of the nations where they are headquartered or their facilities are situated.
In the pursuit of maximum short-run profits, global firms are divesting themselves of larger and larger portions of their
manufacturing operations and concentrating on design and marketing. Like Liz Claiborne in apparel and Cisco systems in
computer hardware, many elite companies aspire to be a label and a marketing operation - with manufacturing done by
foreign subsidiaries, or outsourced to small domestic producers or to contract manufacturers in low-wage developing
countries, who sometimes contract with home workers in the informal sector of these economies.
The geographic dispersion of research, design, manufacturing and other operations has been made possible by declining
transportation costs, advances in digital communications, and falling barriers to trade and investment. One result of these
developments is that manufacturing facilities in technologically backward developing countries, where wages are low, are
now frequently equipped with advanced manufacturing technology and engineering and management know-how.
Assembly operations that remain in the industrialized countries draw parts and components from manufacturing facilities
around the world. U.S. aircraft and automobiles, for example, embody manufactured parts and components from thousands
of suppliers located in virtually every part of the world. This is a key part of the globalization process.
Intra-firm trade - the trade between parent firms in the home country and their foreign affiliates and between foreign
companies in the host country and their foreign parents - is one measure of the extent to which production has become
geographically de-integrated. Data for the U.S. - perhaps the most extreme case among industrialized countries - show
how extensive the internationalization of production processes has become. Over half the exports of U.S. multinational
corporations (MNCs) went to their foreign affiliates. This accounted for a third of all U.S. manufacturing exports. Another
eight percent of all U.S. manufacturing exports were from U.S. affiliates to foreign parent companies. Two-thirds of
imports by U.S. multinational firms were from their foreign affiliates. This was a fifth of all U.S. manufacturing imports.
Another 24% of all manufacturing imports were by U.S. affiliates from foreign parent firms. Thus, intra-firm trade
accounts for 40 percent of U.S. manufacturing exports and 45 percent of imports. And these figures do not count trade with
contract firms in foreign countries that supply multinationals in the U.S. with parts and components.
Workers in the industrialized economies are well aware of this growth in intra-firm trade. They know that capital is mobile
and that employers can relocate plants, outsource some of their operations, and purchase parts and components directly
from foreign producers. Employers have used this "threat effect" to substantially reduce the bargaining power of workers,
and to hold down wages, impose overtime, speed-up work, and undermine unions.
In the U.S., a quarter of American executives surveyed by the Wall Street Journal admitted that they were "very likely" or
"somewhat likely" to use NAFTA as a bargaining chip to hold down wages. In a study of union organizing drives, Kate
Bronfenbrenner of Cornell University found that more than half of all employers threaten to close all or part of their
operations during union organizing drives.
In those industrialized countries where unions are stronger and social protections are more fully developed, the threat of
plant closures and capital flight may be more subtle. But every industrialized country has examples of multinational
companies that have closed down domestic operations while expanding abroad. These examples are likely to have
substantial impact on workers' bargaining position. Moreover, the growing economic clout of these footloose and
borderless companies has - to a greater or lesser degree - undermined the ability of industrialized countries to regulate
their markets for social purposes and weakened the social protections workers previously enjoyed.
Nevertheless, there are important differences among countries in terms of institutions - the strength of unions, rights to
codetermination; and in terms of social protections - generous severance pay, extended unemployment benefits. And these
make a difference in the extent to which workers are exposed to new insecurities. Unlike their American counterparts,
some European multinationals such as Volkswagen have made a commitment to maintaining production in all their
domestic facilities while still expanding abroad. The merger in October 1999 of the Dutch steel company, Hoogovens, and
British Steel to create Corus is instructive on another point. Under Dutch law, workers at Hoogovens were represented by a
works council with established rights to information. As a result, these workers were informed in advance of the merger,
and were able to negotiate employment protections for themselves. This was not the case for workers at British Steel.
Thus, if there is redundant capacity in Corus as a result of the merger, which is likely given global over-capacity in the
steel industry, the brunt of any layoffs and dismissals will be borne by the British workers. Clearly, they are at greater risk
of layoff and face greater insecurity than their Dutch counterparts.
Despite these institutional differences among nations, the power of multinational firms in each country has grown. The
development of global supply chains comprised of multinational corporations, foreign affiliates, and contract
manufacturers in dozens of low wage countries has reduced the bargaining power of workers and the unions that represent
them as well as the traditional power of governments to regulate firms and protect workers and communities. In their quest
for profits, multinational corporations are increasingly able to ignore workers' desire for an equitable sharing of the fruits
of production and the public's interest in the benefits of growth. In many industries they are able to make a credible threat
that they will close plants even when they are profitable and relocate operations abroad. Layoffs are no longer a function
only of inadequate demand or poor firm performance. Thus, workers confront new insecurities while, at the same time,
governments are less able to provide protections.
Workers in the poorer, less developed countries of the South face worsening income inequality and their own insecurities
as a result of globalization, often at the hands of the same multinational companies that make life uncertain for workers in
the more developed North. The International Monetary Fund conditions its loans to troubled nations with austerity and
anti-labor policies aimed at giving debt repayment through exports priority over domestic growth. And it blacklists
projects it doesn't like from receiving assistance from the World Bank and other international lenders.
An editorial in a leading U.S. newspaper, commemorating the start of the administration on Mexican President Vincente
Fox, makes clear what globalization has meant for Mexico:
[Fox] starts with one big advantage, compared with his predecessors: Mexico's economy is thriving as never before. For
that, much credit is due to outgoing president Ernesto Zedillo, who survived the dramatic collapse of Mexico's currency
and finances months after his own inauguration, then steadily and skillfully orchestrated five consecutive years of rapid
growth, thanks largely to booming trade with the United States. Still, Mexico is an example of globalization-driven growth
in more than one way: Inequality, already great, has grown worse in the past decade, both between the richest and poorest
families and between the export-fueled north and agricultural south. Drug trafficking, corruption and violence continue to
afflict almost every aspect of civic life, and the abject poverty that spawned the Zapatista rebel movement six years ago
remains largely unrelieved." (Endnote 2)
An end to insecurity brought about by the ability of multinational corporations to exploit an unfettered global marketplace
to their own advantage, and to the disadvantage of workers in both the North and the South, will require a global alliance
around a common program for working people of all nations. Jeff Faux, EPI's president, has suggested that such an
alliance might be built around a "grand bargain" between the institutions that represent ordinary working people around the
globe. Such a bargain, he proposes, "would reflect the need of workers in the developing world for investment to support
sustained growth and the need of workers in the developed world to prevent erosion of their bargaining power. It would
reflect the common needs of all people for a healthy environment. It would reflect a redefinition of economic development
that puts democratic institutions at the center." (Endnote 3)
Faux suggests three political goals that might be included in such a bargain:
The Decline of the Standard Employment Relationship
The second trend that has contributed to the new insecurity is the decline in the standard employment relationship. Indeed,
a weakening of the standard employment relationship may prove to have been one important result of the
internationalization of production processes. Changes in the employment relationship are taking place against a backdrop
of two decades of globalization in which the risks of volatility in global markets have increasingly been shifted from
capital to labor. The liberalization of financial markets has increased the mobility of capital and spurred many companies
to become multinationals that have geographically de-integrated production processes. The result has been a sharp decline
in the bargaining power of workers and unions. It has also meant that the commitment of many U.S. companies to their
workers has weakened, as has their willingness to invest in worker skills or to share productivity gains with employees.
With decisions about where to locate the various stages of the production process largely the prerogative of management,
and even successful plants subject to being closed, the large companies that once invested across-the-board in their
workers may have less incentive to do so today. Internal labor markets, with their webs of mutual responsibilities among
employees, and between employees and the company, appear to be weakening. Certainly, the international business press
has actively conveyed the message that the pressures of globalization justify even successful businesses in opting out of
their obligations to provide workers with job security, skill development, and opportunities for advancement. Workers
have been advised to "pack their own parachutes" - to develop their own skills, build their own careers, and focus on
employability, since employment security is a thing of the past.
In the U.S., where unions represent about 11 percent of private sector workers and social protections against redundancies
are weak, downsizing has been rampant since the 1980s. Unlike layoffs, which companies once resorted to during periods
of low demand and mounting losses, downsizing has become a fact of every day life. Even the tight labor markets and high
profits of recent years haven't slowed this churning by companies. Half the 1200 major companies in the American
Management Association's 1999 annual survey reported that they had eliminated jobs in the previous 12 months. Only
15% cited inadequate demand conditions as the reason for cutting jobs, while the rest cited such reasons as organizational
restructuring, reengineering of production, adoption of new technologies, and merger or acquisition.
Many of the companies that eliminated positions also added jobs during the same time period. As a group, companies that
cut jobs increased total employment by 5 percent. Apparently, companies feel free to let current employees go, rather than
to retrain and retain them, and to hire new workers as needed. They seem to be saying that hiring - even in good jobs - no
longer carries with it a long-term commitment to employees.
The common perception is that the employment relationship has become more tenuous, and that the commitment of firms
and workers to each other has become attenuated.
This perception is not limited to the U.S. and the U.K., which are generally viewed as having the most deregulated labor
markets. It is commonly argued that the employment relationship in all of the industrialized countries has been weakened,
that permanent, long-term jobs are threatened, and that nonstandard or atypical work arrangements - part-time work,
temporary jobs or time-limited contracts, and independent contractor and free lance jobs - are on the rise everywhere.
Indeed, if employers use nonstandard work arrangements to evade the social protections to which workers with regular
employment contracts are entitled, the incentives for using nonstandard employment may be actually higher in Europe. For
example, in many EU countries workers with indefinite employment contracts can only be fired for cause and have rights
to advance notice of layoffs and generous severance pay. Employers may use fixed term contracts to avoid these
restrictions. The experience of France and Spain, where the use of fixed term contracts fell after protections for standard
workers were relaxed, suggest this may well be the case.
In the U.S, about 30% of the workforce is employed in nonstandard work arrangements and, despite increases in agency
temporaries and contract workers, the overall figure has edged down slightly since 1995, the earliest year for which we
have data on the full complement of these work arrangements. It is not clear that this is an increase over the proportion of
such jobs 25 years ago. The U.S. has always had a large, low wage secondary labor market in which women, minorities
and immigrants were disproportionately employed in insecure jobs that lacked benefits or opportunities for mobility.
What is new today is that nonstandard jobs encompass widely differing types of workers and work arrangements. Agency
temporaries, a rapidly increasing although still small share of the workforce, are not confined to the secondary labor
market. They are employed in a wide range of industries and occupations - including manufacturing, law, and accounting
as well as clerical and sales jobs. The web designers, software developers, financial consultants, and other independent
contractors face very different circumstances than the women who fill the many part-time jobs in retail trade, fast food, and
hotels. Yet, despite the wide disparity in their wages, all of these workers confront insecurities. Their tenuous relationship
to an employer means that they face great challenges in matching their skills to firms' job requirements, in acquiring
training, in maintaining income stability, in achieving career mobility, and in gaining access to health benefits, paid
vacations, paid leave, and pensions. In addition, they often lack the social protections available to workers in standard jobs
- unemployment insurance, for example. This has become painfully clear to the independent contractors who worked in
the software industry as the dot-com mania has subsided in the U.S.
The weakening of the employment relationship extends beyond the wider use of atypical employment relations - the
standard employment relationship itself has changed. Some changes seem well established - layoffs of white-collar and
managerial employees now occur at consistently higher levels than in the past. Firms continue to emphasize "core
competencies" and to outsource many operations, including technical and professional, that were previously done in-house.
Over the last 20 years, companies have shut down large parts of their operations and contracted with other firms for parts
and components; for maintenance, machine shop, and clerical services; for billing and human resource services; for data
entry and computer services; and for janitorial and food services. This process appears to have accelerated in just the last
few years with the emergence of the Internet as a major business technology.
Blue- and white-collar workers have been laid off from good paying, career jobs as a result of the restructuring of
businesses. The job loss is not always large. But even when the number of people who are let go is small, downsizing leads
to turmoil and morale problems because it represents a betrayal of the implicit contract between firms and their employees.
The resulting mistrust and insecurity affect a far larger number of workers than those whose jobs have actually been
eliminated.
Since the Second World War, large companies have hired and trained workers and, through internal labor markets and
career ladders, matched employee skills to the requirements of jobs. In the course of this, they have provided a high degree
of employment security and wage mobility over the long term. Unions set the standard for middle class wages and
generous health and pension benefits as well as paid vacations and sick leave. And many large non-union companies
followed.
The public perception is that many large employers no longer feel the need to undertake strong commitments to their
workers. And that workers have been left to their own devices as companies handed them responsibility for their own
careers. Unions have been weakened by job losses as unionized plants have been closed. This, in turn, strengthened the
hand of employers, who faced diminishing opposition to ill-thought out experiments with business restructuring and
reengineering that are costly in terms of their effects on workers' lives and livelihoods.
While worker's perceptions are clear and their insecurities about their jobs and their future have increased, there is some
ambiguity in the data about the extent to which the "social contract" between corporations and their employees has
unraveled. An excellent review of recent research on the standard employment relationship in the U.S., and whether it has
been changing, sorts out many of these issues. (Endnote 4) The authors, Annette Bernhardt and Dave Marcotte, identify standard
employment with internal labor markets. They describe internal labor markets as including "(1) a long-term employment
relationship; (2) wages that are sheltered from market wage fluctuations and are instead determined by administrative rules
tied to job classifications and rank; (3) upward mobility within the firm, so that wages rise with seniority and promotions;
and (4) company-sponsored [health and pension] benefits."
With respect to the long-term employment relation, they find that job tenure has declined only mildly overall, as declining
job stability for men has been moderated by the influence of longer tenure for women, who are less likely today to leave
paid employment when they have children. However, there has been a strong decline in job tenure among young workers,
among those who lack post-secondary education, and among African Americans. (Endnote 5)
With respect to wage setting, Bernhardt and Marcotte find evidence that wages are increasingly set in external rather than
internal labor markets. In manufacturing, the globalization of trade appears to have increased employers' preferences for
wage flexibility and moved them away from internal labor markets.
As the authors point out, "one of the main concerns about changes in 'standard employment' has to do with the
opportunities for workers to build a career" and experience wage growth over their working lives. They find that there is
less upward mobility in wages. They also find that health and pension benefit coverage has declined in a manner consistent
with a decline in internal labor markets. Access to these benefits is one of the main advantages of standard employment in
the U.S.
They conclude that, while the evidence is not conclusive and it is necessary to wait for data that are richer, more accurate,
and cover a longer time period, the recent research "suggests that the contours of the standard employment relationship
have indeed changed."
The effects of wider use of nonstandard work arrangements by firms and the changes in the standard employment
relationship have been to undermine the firm as a labor market institution. This is a significant development of the last two
decades for American workers. The U.S. lacks a common K-12 school curriculum and training programs that certify the
skills of non-college graduates. Traditionally, U.S. companies assumed responsibility for initial training and for managing
the school-to-work transition for new high school and college graduates. Access to health insurance and a pension depends
on what employers offer. Much more so than in European countries, companies in the U.S. have functioned as an
important labor market institution.
An increasing number of middle class workers, who hold what appear to be good jobs in terms of wages and working
conditions, are nevertheless at risk in terms of access to training, opportunities for wage mobility, employment security,
access to quality health care, and a secure old age. Today, it is not only less-skilled workers with low paying jobs in the
secondary labor market who are insecure about their jobs and their futures. Many middle class workers, despite high
incomes, are subject to such uncertainties.
Some workers prefer nonstandard work arrangements and some employers utilize these work arrangements to fill in for
workers on leave, to meet peak demand, or for similar business reasons. These mutual needs and desires can be
accommodated without discriminating against workers in atypical jobs or undermining the security of those in regular
employment.
Policies that would make this possible include:
- Parity for workers in nonstandard jobs. Guarantee equal hourly pay and pro-rated health and pension benefits for
workers performing the same job, regardless of employment status.
- Proper classification of employees. Enforce laws that prevent the misclassification of employees as temporary
workers and independent contractors so that employers can evade their responsibilities with respect to taxes, benefits,
and social protections.
- Reform employment law. Extend the regulations and social protections in employment law to workers in
nonstandard jobs - for example, unemployment insurance, workers' compensation, social security, and the right to
organize unions.
- More good part-time jobs. Encourage private sector employers to create part-time, say 4-day week, jobs in a wide
array of occupations.
The Marginalization of Care Work
The third trend that has contributed to new insecurity for working people is changes in the social norms governing paid
work and unpaid care work. The marginalization of care work and of those who do it has raised the stress and anxiety
experienced by working families.
The norms of behavior that characterized work and care in the industrialized economies for most of the long period
following the displacement of the farm and family economy by the factory and industrial economy can be characterized as
the breadwinner - homemaker model of work and care. Briefly, men worked outside the home for wages to provide for the
financial security of their families. They were expected to earn enough to meet the family's needs for cash, and the demand
for a "family wage" was a high priority for the industrial unions that emerged to represent male wage earners.
The home became the separate sphere of women. Homemaking and motherhood were recognized as important vocations
for women, who were viewed as uniquely suited to carry them out. Wives looked after the needs of their husbands and
cared for them after their day at work. Women undertook the unpaid work of caring for children and the elderly and
contributed directly to the family's economic well-being by sewing, canning, and cooking.
The breadwinner-homemaker system may have constrained the choices available to men and women, but it provided them
with clearly delineated social roles and placed a high value on the separate contributions that each made. Women's' work
in the home, like men's in the paid labor force, was a source of pride as well as a very real contribution to the family's
standard of living.
Many households, of course, did not conform to this norm. Some women never married and lived as dependents or
servants. Others were widowed or had husbands who could not support them and their children, and were forced into paid
employment. They labored in marginal and insecure jobs and at wages far less than those earned by men. A few had the
means and education to pursue their own ambitions. But the norms of work and care were clear, and the separate
contributions of men in the economic sphere and women in the family sphere were valued.
As men left the family economy to become wage earners, the economic security of the family came to hinge on the ability
of a lone earner to hold a job. Governments, prodded by unions and social movements concerned about the plight of
families in which the wage earner could not find a job or was too old or sick to work, enacted social protections and took
on a growing role as guarantor of the welfare of their citizens. These included workmen's compensation for men injured on
the job, unemployment compensation for those laid off from work, old-age pensions for those too old to work, and
survivors' insurance for widowed women and their children. These measures were supplemented in some countries with
various other social protections - disability insurance, paid sick leave, paid vacations, generous severance pay, and
provisions for early retirement.
The breadwinner-homemaker model did not exclude all women from paid employment. Many young single women were
drawn into the labor force in the early years of the 20th century. Most women quit their jobs when they married, however.
The participation of women in paid employment increased steadily during the last century. Rising educational levels of
women, the drafting of women into paid employment during wars, the growth of the service sector, and the emergence of
the caring professions all encouraged women to move outside the domestic sphere. The caring professions - teaching,
social work, nursing - provided acceptable careers for women who never married, and employment for married women in
the years before they had children. Most married women still left paid employment when their children were born. The
exceptions were mainly college educated women and those whose husbands could not support them.
Dramatic increases in the employment of married women with children are rather recent. They began 25 years ago in the
U.S., earlier in Sweden and some of the other Nordic countries, and much more recently in the countries of Western and
Southern Europe. It is instructive to compare the reasons for these increases in female labor force participation in the U.S.
and Sweden.
Among working class women in both countries, the rise of married women's participation in the labor force was fueled in
part by advances in technology and industrialization. These advances undermined the ability of women to contribute to
their family's standard of living - and to the output of the economy - through their own efforts at canning food, sewing
clothing and other textiles, and nursing the sick. But here the similarity ends.
The rapid entry of women into paid employment arose earlier in Sweden and was the result of two developments. The first
was a general recognition that the small size of the population meant that the standard of living in the country depended on
the contribution of women as well as men to economic output. Public discourse has focused on the importance of this
contribution, and on the steps society needs to take to secure it. The second was the development of the social welfare state
during this period, which expanded employment for women in the feminine caring professions and situated it in the public
sector.
Care work is relatively well paid in Sweden, and excellent facilities for the care of young children and elderly parents are
widely available, either as public or subsidized services. Families have access to a variety of social insurance programs that
facilitate combining care and work responsibilities - paid maternity leave, paid parental leave, paid sick leave, paid leave
to attend to sick children, generous paid vacation leave, and shorter working hours when children are young.
There is a dual relationship between Swedish women and the state, since the public sector is the major employer of women
and, at the same time, the state has created the conditions for women's paid employment. That is, the state provides a
highly developed, publicly funded system for the provision of education services, health care, care for the elderly, and care
of young children. It also provides publicly financed leaves and subsidized part-time work for parents of young children
(taken mainly by mothers). But this highly developed system of public services to relieve women of domestic care
responsibilities and enable them to hold a job coexists with a high degree of occupational segregation. Men hold the higher
jobs in the public sector hierarchies, and women are largely excluded from jobs in manufacturing and from professional
and managerial jobs in the private sector. In these jobs, employers still view the full-time male breadwinner of an earlier
era as the ideal employee.
In the U.S., in contrast, the rapid entry of married women into paid employment over the last 25 years was fueled by
stagnant or declining wages of men as the standard employment relation, which had provided men with rising wages over
their working lives, began to unravel. Married couples staved off a decline in the family's standard of living by increasing
family hours of work. By 1979, middle class couples with children worked 3,272 hours a year on average - a little more
than one full-time and one part-time job. And in 1998, these families worked, on average, 3,885 hours a year - equivalent
to two full-time jobs.
The employment of married women in the U.S. was conceptualized not as a contribution to the nation's standard of living,
but as a private response to the financial problems facing individual families. That has made all the difference. While the
entry of men into the industrial labor force was accompanied by the development of social insurance to meet the family's
needs for financial support if the wage earner were unable to work, no similar response by government to the entry of
women into paid employment has been forthcoming. Arranging care for children while both parents work is seen a private
family responsibility. The only federal government initiative was the passage, in 1993, of an act that requires large
employers to offer twelve weeks of unpaid family or medical leave to workers. Many workers cannot afford to take unpaid
time off from work, and many others are not even covered by the provisions of the law.
The fact that nearly every available adult is in paid employment in the U.S. has had a profound effect on the ability of
families to meet the personal needs of working adults or to care for children, the sick and the elderly. The contradictions
between the demands of homemaking and the demands of paid employment, and the unrealistic expectations for women
who have shouldered that double burden, have not been addressed in the public discourse. They have been "resolved," if
one can even use that word, through the devaluing of care work and the marginalization of the (still mainly) women who
perform it. New social norms of work and care have emerged in the last two decades.
A new system of norms has emerged in the U.S., and I am sure that this is true in many other industrialized countries as
well. Anyone - male or female - can work. The only requirement is that, as employees, they should conform to the norm
of the ideal worker. An ideal worker is a worker who behaves in the workplace as if he or she has a wife at home full-time,
performing all of the unpaid care work that families require. Personal problems do not belong in the workplace.
Conflicting demands are expected to be resolved in favor of the requirements of the job. Indeed, workers can be - and
frequently are - fired if their care responsibilities interfere with their jobs.
Mothers often take part-time jobs while their children are young, and the number of part-time jobs in the U.S. increased
with the first influx of women into paid work. But part-time employment stabilized in 1979 at 18% of the workforce, and
hasn't changed since. The composition of part-time jobs also hasn't changed much. These jobs are found overwhelmingly
in industries and occupations in which pay is low and benefits are often not available. Part-time workers can legally be
paid less than full-time workers who do the same job, and can be denied benefits and paid leave. These types of part-time
work do not really solve the problems of working women, who still must combine work and family but lack the financial
means to purchase good quality day care, prepared foods, dry cleaning and mending, or house cleaning services.
Since most households now have every available adult engaged in paid employment, and most married couples in the U.S.
- even those with young children - are dual earners, there are great stresses on household members. These are borne
disproportionately by women, who still have the main responsibility for domestic homemaking and care. Mothers with
children at home and, to a lesser extent, fathers shoulder a double burden. But, employers are under no obligation to take
note of this. If workers wish to retain their jobs, then compromises will have to be made on the care side of the equation -
in time spent on housework and in the quality of care for children and elderly parents.
This system of norms in the U.S. can be characterized as the ideal worker-marginalized care-giver model. Men or women
can work if they conform to the old ideal of the male employee with no domestic work responsibilities; care work is to be
fit in, somehow, without impinging on the employee's availability for work. Care giving, and those who provide it, have
been marginalized.
Even women who pursue homemaking on a full-time basis are dismissed as "just a housewife," the important care work
they do devalued. This has been taken to an extreme in the case of poor single mothers. The recent "reform" of welfare
(i.e., aid to families with dependent children) in the U.S. has placed a greater value on having a woman work at minimum
wage at McDonald's than on having her care for her child - even though her earnings will still leave her and her children
impoverished. Care work provided at home, whether by single moms or married housewives, has been devalued - and so
have the women who perform it.
Despite the fact that most mothers are working, the U.S. lacks an adequate system of caring for children. Children's care is
provided by marginalizing the untrained and underpaid child-care workers who provide it. Much the same can be said
about care for the elderly. Earnings of the women who care for children and the elderly are extremely low, and turnover
rates are excessively high. As a result, the quality and continuity of care of the most vulnerable members of society suffers.
The externalization of these services from the family to the marketplace, and the rapid rise in employment in these jobs,
has fueled the expansion of the low wage sector. Despite the low earnings of these women, however, the costs of these
labor-intensive services absorb a huge fraction of the incomes of the families that require them.
Most industrialized economies do far better than the U.S., providing paid maternity and parental leave, for example, as
well as paid sick leave and caregivers leave. Few have provisions as generous as Sweden and many provide child-care,
nursing care, and elder care through the private sector. Some, like the Netherlands are deliberately pursuing another path -
organized around widespread availability of good part-time jobs in the private sector to share the work of caring between
men and women, and to avoid the marginalization of care work, and the segregation of women's jobs.
Despite these efforts families where every adult is working face high levels of time pressure in nearly all of the
industrialized countries and new insecurities. In most countries, the worry is how they can handle the high demands of the
workplace and still provide adequate care for children and elderly parents. In the U.S. this is widely acknowledged as one
of the most significant sources of insecurity for working families. Mothers, in particular, often face impossible choices
between missing work and losing their jobs and their ability to put food on the table, or going to work and sacrificing the
well being of their children.
In Sweden, the wide array of care facilities and generous paid leave policies spare women from facing such dreadful
choices. Nevertheless, the Swedish system has its own, if less threatening, insecurities. The severe recession in the first
half of the 1990s exposed the vulnerabilities of the Swedish system in which care work may not be marginalized but care
occupations are highly gender segregated, and women are employed overwhelmingly in these and other public sector jobs.
The large government budget deficits associated with the recession led to subsequent cutbacks in funding of public
services. Women are disproportionately vulnerable to these layoffs, but even more pressing is the intensification of work
as patient-to-nurse and child-to-day care teacher ratios rise. Today in Sweden, work stress and its health effects is a major
topic of discussion - between the social partners and in every day discourse among the public.
Looking to the future, we can imagine a new set of norms for work and care - a model of shared work and valued care.
Shared work has multiple meanings. It encompasses sharing work with other aspects of well being; sharing paid work
among people through shorter work weeks, reduced hours, flexible schedules, and job sharing; sharing access to good jobs
in both the public and private sectors, including professional and managerial jobs; sharing care work within the family
among all family members; sharing work with other community and government institutions that help with care work,
subsidizing the pay of care workers, and facilitating paid work by providing a variety of other work supports. At the heart
of these new norms is the recognition that a high value can only be placed on care work if all work is shared.
Unions have a major role to play in negotiating the conditions in the workplace that facilitate both shared work and valued
care. This is especially true with respect to the working time initiatives that are being implemented in many European
countries. Innovations in working time do not necessarily enhance equality or improve welfare for either men or women
workers. These changes in working time arrangements have mainly been pursued to increase flexibility for employers or to
create jobs. But they have opened up new possibilities for increasing employees' command over time. In a world of shared
work and valued care, all workers - not just women - will need to gain greater individual control over the division of their
time between paid employment and unpaid care work. Unions can contribute by negotiating the framework for individual
flexibility and defining common standards of flexibility to minimize the chances of discrimination or marginalization of
workers who take it up.
Public policy has a most important role to play in helping nations achieve the norms of shared work - valued care. Some
industrialized countries are already pursuing a variety of such policies to alter working time regulations. The recently
enacted "Adjustment of Hours" law in the Netherlands requires employers to honor requests for either a greater or lesser
number of hours of work unless there is a valid business reason for refusing. This may facilitate the adjustment of hours of
work over the life course - full time in the early years to establish a career, four days a week for each partner when there
are young children, full time as the children grow older, part-time in the pre-retirement years. And it should result in a
reduction in hours with no reduction in the quality of the job, although pay and benefits would be pro-rated. Combined
with laws that protect part-time workers against discrimination, this may provide a powerful motivation for the
development of norms of shared work by both parents in the home and at the workplace.
Universal day care, pre-school and elder care make it possible for families to share care work with community and
government institutions as in Sweden and other Nordic countries and in individual communities scattered across the
industrialized countries, such as the Italian city of Bolgna.
There are five cornerstones of public policy to facilitate a system of shared work and valued care. They are:
- Hours of Work Legislation to allow for a shorter standard work week for all, flexibility for workers, longer part-time hours, and limits on mandatory overtime.
- Equal Opportunity and Non-Discrimination Provisions to protect workers on part-time schedules from
discrimination, and to encourage private sector employers to make good part-time jobs widely available.
- Share the Cost of Care by investing in daycare and elder care infrastructure, and by providing subsidies for child
care and elder care, short-term carers' leave, subsidized wages or tax credits for care givers, universal pre-school, and
after and before school programs for children.
- Untie Benefits from Individual Employers by making access to health insurance available to everyone without
regard to employment status, and by establishing funds similar to unemployment insurance for maternity leave,
parental leave, and long-term family medical leave. Provide a floor under wages by indexing the minimum wage to the
median wage.
- Update Income Security Protections such as unemployment insurance and old age pensions. In many countries, tax
provisions and government programs that provide social security or unemployment insurance are geared to the
breadwinner-homemaker model of work and care and to the standard employment relationship. These policies need to
be updated to reflect the changes and great variety in family structure and in work arrangements. They need to be
reformed to provide more generous income supports to low wage workers by providing credits through the tax system
and to provide minimum adequate income supports for single parents and others unable to work.
The industrialized countries vary in the extent to which care work has been marginalized and workers in part-time jobs
have been excluded from the standard employment relationship. It depends, in part, on how far they have gone in
implementing the policies described above. Most industrialized countries - even apart from the Nordic countries or those
of Western Europe - are far ahead of the U.S. Mothers in Italy and Japan get paid maternity leaves. Japan heavily
subsidizes companies that provide infant care facilities for their employees. Even Australia, which like the U.S. lacks paid
maternity leave, provides 4 weeks of paid vacation leave each year (pro-rated for part-time workers) and short periods of
paid caregivers leave to care for children or an elderly relative.
The Ubiquity of Digital Technology
Discussions of computer and information technology often conjure up visions of a dynamic and growing New Economy,
where technologically sophisticated workers, employed by fully networked companies, spend their workdays on-line on
creative and exciting projects. This is contrasted with the stodgy Old Economy, where jobs are dull and companies
manufacture products that are sold in "bricks and mortar" stores. This is a highly romanticized view of high tech jobs, and
a completely inadequate and misleading assessment of the role of information technology. Like electric motors, computer
chips and microprocessors can be found everywhere - not just in high tech workplaces but in cars, appliances, and
thermostats at home and in overhead cranes, coke ovens, industrial robots, and test equipment in factories and mills. It may
be helpful to refer to the ubiquitous use of digital electronic technologies that control equipment or transmit information as
digitization, by analogy to the electrification that, in the first half of the 20th century, provided the infrastructure for the
way we live and work. And, like electrification, digitalization will raise productivity growth and make many things
possible, but it will not by itself eliminate inequality or insecurity.
In the U.S., information technology has now begun fueling rapid growth in labor productivity. This is a rather recent
phenomenon. Just a few years ago, economists were focused on the "productivity paradox," summed up in the statement
that computers could be seen everywhere, except in the productivity data. The puzzle was why productivity growth was so
low despite the billions of dollars that companies invested in information technology in the1980s and early 1990s. New
research by economists at the Federal Reserve Board in Washington, DC appears to have resolved the paradox. (Endnote 6)
The researchers concluded that computers could not contribute much to the rate of growth of output through the mid-1990s
because they were such an extremely small part of the total capital stock. However, the contribution of information
technology capital to output and productivity growth between 1996 and 1999 nearly doubled. This is the contribution to
growth from the use of computer hardware, software, and communication equipment. In addition, there were substantial
improvements in efficiency in producing this equipment that also contributed to growth.
But the growth in the stock of computers and other information technology capital is only one part of the productivity
story. Companies have had to match their organizational structure to the capabilities of the new information technology.
And this has taken time. Major changes in work practices - sometimes referred to as high performance or high
commitment practices - have been adopted by companies trying to meet the new standards of competition. (Endnote 7) My own
research finds that, in manufacturing, high performance work systems, in which workers share decision making
responsibility with managers, really do deliver improved performance for the plants that adopt them. We found that they
also pay off for workers in terms of more interesting work, greater employment security, and a high trust environment that
results in greater job satisfaction. And worker surveys show that over 70 percent of American workers want a direct voice
at work. Thus for some workers, information technology and the changes in work organization that it has motivated have
improved the quality of jobs.
Yet many manufacturing firms still follow the low road, intensifying work, speeding up the line, and attempting to
compete on price alone. In the process, they sacrifice the wages, security, safety, and well being of their workers. A narrow
focus on share holder value often means many managers won't invest in retraining their workers and reorganizing their
workplaces, simply because it costs money up front and takes time to yield results. Moreover, managers are reluctant to
share power with workers.
The effects of information technologies on work in services are quite complex, and may not lead to the same type of
virtuous dynamic as in manufacturing. Early research on the effects of these technologies in services focused on whether
they had the effect of deskilling or upskilling workers. Today, however, the salient point appears to be the polarization of
skills.
Jobs in services are being restructured for a variety of reasons that include deregulation and new customer service
strategies as well as intensive investment in computer and communication technologies. Technology is used to bundle
packages of services together and to segment customer markets according to the complexity and prices of the bundles of
services likely to be purchased - often into business and residential segments, or into high- and low-income segments. The
quality of customer service - and the quality of customer service jobs - in these segments may be very different.
There is a direct link between the customer segment and the labor-market segment. In services, the combination of
technology and high performance workplace practices may lead to more skilled work and high quality jobs for workers
providing services at the high end of the market. Service workers whose customers or clients require less complex or low-value-added services may find their skills devalued and the quality of their jobs degraded. Computer and communications
technologies are used to concentrate customer service activities in call centers in a wide range of industries. This has
sometimes led to the creation of electronic sweatshops in which wages are low and surveillance is high for workers, mainly
women, in activities as varied as airline reservation clerks and classified ad takers to credit card information clerks and
insurance claims adjusters.
One important effect of information technology is that it has changed the relationship between companies and their
suppliers. In the past, large manufacturing concerns produced many of the inputs they needed themselves. Today, however,
technologies such as electronic data interchange (EDI) and Internet-based systems of procurement have reduced the cost
and time involved when companies interact with suppliers. As a result, many firms have begun to place greater reliance on
outside contractors, domestic and foreign. Computer-based supply chain integration has shifted the firm's "make or buy"
decision away from making parts and components to buying them. Ford, for example, recently announced plans to set up a
web site, called AutoXchange, for purchasing goods and services - from paper clips to stamping presses. Ford has an $83
billion-a-year purchasing budget and 30,000 suppliers.
Global supply chain organizations, like other types of firm networks, got a real boost from the development of business-to-business e-commerce and from the movement of enterprise resource planning tools to the Internet, where firms are
learning to use them to coordinate global inter- and intra-firm relationships. Numerous kinks remain to be worked out. But
computer-based interorganizational systems are becoming more sophisticated and effective. Information technology has
enabled the geographic de-integration of production, and will continue to facilitate the further internationalization of
production processes.
Increasingly, high tech jobs color our views of the employment relationship. Employment in the computer hardware,
communications equipment, and software industries is expanding rapidly. In the U.S., five of the 10 fastest growing
occupations in the U.S., 1998-2008, are computer occupations - computer engineers, computer support specialists, systems
analysts, database administrators, and desktop publishing specialists. Moreover, systems analysts and computer support
specialists are now up there, along with cashiers and retail sales persons, among the 10 occupations that are expected to
create the most new jobs.
The hardware and software engineers, systems analysts, programmers, and new media workers and web designers include
large numbers of highly skilled and highly paid independent contractors. Even high tech workers in standard jobs often
view their assignments as temporary or project-related, moving on to the company with the next hot project when their
current one ends. Silicon Valley companies claim that the average tenure of a software engineer is less than two years, and
data for California show that almost half of the state's workers have been with their current employer for less than two
years. Such short tenure blurs the distinction between contractors and employees. Until recently, high tech companies
welcomed these arrangements, which minimized their responsibilities to the high-priced professionals doing the cutting
edge work, and who might not be needed next year. In the last few years, however, the explosive growth of Internet
applications has led to tight labor markets for high skilled IT professionals, which are exacerbated by the high turnover and
constant job churning of these workers.
In contrast to the independent contractors, who tend to prefer this way of working, temporary workers in the IT-producing
industries are among the least satisfied with their employment relationship. Overwhelmingly, these are workers who desire
regular, full-time jobs and have accepted temporary placements on what they hope really is a temporary basis.
Unfortunately, as many have learned, these are so-called "perma-temp" positions - jobs that are permanently filled by IT
companies on a temporary basis in order to avoid the pension, health insurance, stock options, and other obligations toward
regular employees. Computer skills and problem-solving capabilities are not sufficient to get these workers a real job,
much less to provide them with benefits, training, or a secure future.
In Silicon Valley, (Endnote 8) labor markets are characterized by high levels of turnover and by complex subcontracting
relationships. A very high percentage of the workforce is employed in nonstandard jobs. The extent of nonstandard work in
this region is significant. Temporary employment through temp agencies grew 170% between 1984 and 1998, from 1.6
percent of the workforce to 3.5 percent. This is almost twice the national average for this type of work arrangement. Even
for workers in standard employment relationships, rapidly changing skill demands lead to high levels of stress and
insecurity.
Taken together, these brief considerations suggest that information technology is having profound effects on workers.
Many highly skilled workers thrive in this volatile atmosphere, but even they are not spared the insecurities associated with
nonstandard work - no health insurance or pension, no unemployment insurance, no easy way to keep their skills current.
For many other workers, who lack specialized IT skills and the high pay they command, the volatility and lack of income
stability combined with the lack of benefits or social protections have meant very high levels of insecurity.
New technology has raised productivity growth and may make possible improvements in living standards or shorter
working hours. It has also improved the quality of jobs in organizations with high performance work systems. But there is
a dark side as well. Information technology facilitates other trends that undermine the security of workers.
Conclusion
I have tried to emphasize in my remarks today that the extent to which each of the four trends I have examined contributes
to the "new insecurities" of workers in the industrialized economies varies by country. In particular, it depends on the
strength in each country of the institutions that represent workers' interests when decisions are made - unions, works
councils, union confederations, and labor parties. It depends as well on the social protections available in each country and
on whether individual workers and their families are buffered against the vicissitudes of unfettered markets.
It is precisely these differences in the experiences of workers in the industrialized countries that are one important source
of optimism about the future. Institutional arrangements matter. Yes, workers in every country face conditions that are less
secure than those they experienced 25 years ago. But the difference in degree of insecurity between non-professional
women workers in the U.S. and their Swedish counterparts, to take only one obvious example, is extraordinary. Despite the
rhetoric that there is no escape from the inexorable pressures of globalization or technology, comparable workers in
different industrialized countries are subject to very different levels of insecurity. Successful multinational companies that
operate in many different countries manage to be profitable while playing by very different rules of capitalism in each of
them.
A second source of optimism arises from the "new insecurity" itself. Even 25 years ago there were many unskilled, low-wage workers in each of the industrialized economies, and many others excluded from access to paid work, whose lives
were precarious and insecure. Disproportionately, these workers were minorities, female, immigrants, the very young, or
the very old - everyone, that is, except the prime-age men from the dominant culture employed in manufacturing or as
professional employees in large organizations. That was the "old insecurity." Organizing workers in the insecure jobs in
the so-called "secondary labor market" was a daunting task for those unions that undertook to try to extend to them the
benefits of free association and collective bargaining. And, to their shame, too many never tried.
The "new insecurity" is no respecter of the privileges of skill, gender, skin color, or national origin. In the U.S., the high
powered web designers and software engineers plying their trades as independent contractors in New York's Silicon Alley
or California's Silicon Valley are as likely as regular part-time workers to lack health insurance coverage. In some
European countries, high and persistent unemployment is almost as much a problem for high skilled as for low skilled.
Everywhere, the job security of regular full-time workers has become more tenuous, making them anxious about their
futures even if the dangers are not imminent. And in every country, family hours of work have increased and lack of
control over work time and work schedules has raised stress at home and at work.
This is fertile soil for the resurgence of trade union movements that can capture the popular imagination by organizing
women and men around themes that resonate across a wide spectrum of occupations, skills, and earnings. As an
increasingly powerful institution representing the interests of working men and women, resurgent unions can engage the
political process and press the policy agendas outlined above.
Thus, looking to the future it is possible to identify rays of optimism. The present, unfortunately, is characterized by a
decline in union membership and bargaining power and by the weakening of social protections for workers and their
families. There is reason enough for concern about the emergence of new insecurities.
Endnote 1:
Much of the material in this section comes from a background paper prepared by Rob Scott of the Economic Policy
Institute for the U.S. Trade Deficit Review Commission created by the U.S. Congress. See Chapter 2 of The U.S. Trade
Deficit: Causes, consequences and Recommendations for Action, November 2000.
Endnote 2:
The Washington Post, Thursday, November 30, 2000, p. A36.
Endnote 3:
Jeff Faux, Toward a Global Social Contract: The politics of the global economy, paper presented at The Latin American
Facultyy of Social Sciences' 25th Anniversary Conference, October 25, 2000, Mexico City. Available from the Economic
Policy Institute, Washington, DC.
Endnote 4:
Annette Bernhardt and Dave E. Marcotte, "Is 'Standard Employment' Still What It Used to Be?" in F. Carre, M. Ferber,
L. Golden, and S. Herzenberg (eds.), Nonstandard Work: The Nature and Challenges of Changing Employment
Arrangements, Champaign, IL:Industrial Relations Research Association, 2000, pp. 21-40.
Endnote 5:
These findings are consistent with those of Peter Auer and Sandrine Cazes, who examined the job tenure of workers in
the U.S., Japan and the European Union in the 1980s and 1990s. Auer and Cazes found low average job tenure and
declining job stability for men in the U.S., rising average job tenure for men and women in Japan, and broadly stable or
rising job tenure for men in most European countries and low but rising job tenure for women. Peter Auer and Sandrine
Cazes, "Stable or Unstable Jobs: Untangling and Interpreting the Evidence in Industrialized Countries," Paper prepared for
the Non-Standard Work Arrangements Conference, Augusta, Michigan, August 2000.
Endnote 6:
Stephen D. Oliner and Daniel E. Sichel, "The Resurgence of Growth in the Late 1990s: Is Information Technology the
Story?" Journal of Economic Perspectives, Vol. 14, no. 4, 2000, pp. 3-22.
Endnote 7:
See, for example, Eileen Appelbaum, Thomas Bailey, Peter Berg, and Arne L. Kalleberg, Manufacturing Advantage:
Why High Performance Work Systems Pay Off, Ithaca, NY: Cornell U. Press, 2000; Erik Brynjolfsson and Lorin M. Hitt,
"Beyond Computerization: Information Technology, Organizational Transformation and Business Performance," Journal
of Economic Perspectives, Vol. 14, no.4, 2000, pp. 23-40.
Endnote 8:
The role Information on Silicon Valley comes from Chris Benner and Amy Dean, "Labor in the New Economy: Lessons from
Labor Organizing in Silicon Valley," in Carre, Ferber, Golden, and Herzenberg, 2000, op. cit., pp. 361-375.
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