Institutional Solutions to Precariousness and Inequality in Labour Markets
| DOI | http://doi.org/10.1111/bjir.12108 |
| Date | 01 December 2014 |
| Published date | 01 December 2014 |
| Author | Zoe Adams,Simon Deakin |
Institutional Solutions to Precariousness
and Inequality in Labour Markets
Zoe Adams and Simon Deakin
Abstract
It has become widely assumed that the standard employment relationship
(SER) is in irreversible decline in industrialized societies. However, non-
standard and precarious work relationships often complement the SER via
labour market transitions, and are not displacing it as the focal point of labour
market regulation. The co-ordination and risk management functions of the
SER continue to be relevant in market economies, and the SER is adjusting to
new conditions. The SER has a complex and evolving relationship to gender and
to social stratification. In the European context where the SER originated and
achieved its clearest legal expression, institutional solutions to precariousness
and inequality are being developed, the most innovative of which avoid simple
deregulation in favour of integrated policy responses involving a range of
complementary regulatory mechanisms.
1. Introduction
The irreversible decline of stable and regular employment in industrialized
societies is a stylized fact that has reached the status of a conventional
wisdom. But conventional wisdom can be wrong. The standard employment
relationship (‘SER’) continues to be a core legal and economic institution of
a market economy. It may have mutated in response to the current globalized
and financially driven variant of capitalism, but it is not withering away.
Non-standard working patterns, even the more precarious, are often comple-
mentary to the SER (Schmid 2010) and do not in general offer a viable
alternative to it as a focal point for co-ordination in labour markets (Deakin
2013b).
There are significant cross-national variations in the incidence of the dif-
ferent types of non-standard work and in trends in their use over time.
Precariousness, an often-cited consequence of many forms of non-standard
Zoe Adams and Simon Deakin are at Centre for Business Research, University of Cambridge.
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British Journal of Industrial Relations doi: 10.1111/bjir.12108
52:4 December 2014 0007–1080 pp. 779–809
© 2014 John Wiley & Sons Ltd/London School of Economics. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
work (Standing 2011), is currently increasing (Stone and Arthurs 2013). It is
suggested that changing social norms, in particular associated with a new
household division of labour, along with shifts in modes of production and
the impact of globalization on the regulatory capacity of the state (Arthurs
1996), have led to labour market segmentation between workers with stable
working relationships and those with non-standard and precarious arrange-
ments. Segmentation is associated with inequality, and with it the marginal-
ization of social groups. The institution of the SER itself is now seen as a
barrier to mobility, excluding groups from accessing better paid, more secure
employment, and so exacerbating inequality (Boeri and Garibaldi 2002;
Cahuc and Kramarz 2004; Gunderson 2013; Stone and Arthurs 2013).
However, this view is ill-founded both empirically and from the point of view
of policy design.
The trend in non-standard working, particularly as embodied in precarious
forms of work, is comparatively recent and is not characteristic of all periods
of industrial development (Deakin 2014b). It is due in part to institutional
rigidities, associated with the SER, but also to conscious policy choices that
have privileged casualization, wage suppression, and the fiscalization of
employment over the promotion of stable work and a living wage (De
Stefano 2014; Deakin 2013b, 2014a; Meardi 2014). These policies, which are
often presented as ‘inevitable’ (Stone and Arthurs 2013: 5), are not the unique
best response that individual countries can make to the competitive pressures
of a globalized market environment, and they have not been universally
pursued (Doogan 2013). Scaled up, they would imply a general race to the
bottom, but as it is in the interests of at least some sovereign states, some of
the time, to pool their resources to prevent such an outcome, there continues
to be a role for transnational regulation in offsetting this effect (Deakin and
Wilkinson 1994).
To understand the likely future evolution of the SER requires a three-stage
analysis. The first step is to place the phenomenon of the SER in a historical
and theoretical framework that can account for its distinct institutional logic
within a market economy. Drawing on evolutionary models of the law–
economy relation (see Deakin and Wilkinson 2005), we will argue (see Section
2) that the SER performs functions of co-ordination and risk allocation which
have a central place in the organization of capitalist labour markets. At the
same time, the SER creates space for fairness norms to operate within the work
relationship. The SER reflects social practices but is also a normative point of
reference in the construction of systems of labour market regulation through
collective bargaining and labour law (Bosch 1986, 2004; Deakin and
Mückenberger 1992; Mückenberger 1985, 1989; Mückenberger and Deakin
1989). As such, it mediates the relationship between labour and capital in the
system of production, at the same time as altering the distribution of risks and
incomes within society. Thus, the SER has a complex and evolving relation-
ship to stratification along the lines of gender and social class.
The second stage of our analysis consists of a review of the state of the art
in empirical research on the SER and the extent of non-standard work
780 British Journal of Industrial Relations
© 2014 John Wiley & Sons Ltd/London School of Economics.
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