More recently the question of employment insecurity/precarity and labour market change have received renewed attention (Stone, 2012), with a number of theorists describing a rise in precarious and insecure forms of employment (e.g. Vosko, 2010; Kalleberg, 2011; Standing, 2011). Two prominent theories that have gained significant attention have been put forward by Arne Kalleberg (2011) and Guy Standing (2011).
In his book Good Jobs, Bad Jobs Arne Kalleberg (2011) argues that institutional changes in the United States since the 1970s have led to a return to the more precarious forms of working that characterised the employment of the pre-1930s period. These changes have resulted in: polarisation in the quality of jobs in terms of the financial rewards and intrinsic qualities; an increase in the incidence of poor quality jobs; and an increasing precariousness of work in general. In contrast to the ‘orthodox’ view, characterised by Madrick (2012) as seeing that labour market change as brought about by inevitable, evolving economic forces, such as technological change and globalisation, and leading to efficiencies through lower wages, Kalleberg argues that although globalisation and technological change play a part, these changes have been brought about by “the interaction of two major sets of dynamics” (Kalleberg, 2012, p429). These dynamics are comprised of:
“(1) Macrostructural economic, political, and social forces such as the intensification of global competition, rapid technological innovation and change, deregulation of markets, increased mobility of capital and growing financialization of the economy, the decline in unions and worker power, and the continued rise of the service sector; and (2) demographic changes in the labor force that increased labor force diversity and created a larger group of non-White, nonmale workers who are more vulnerable to exploitation.” (Kalleberg, 2012, p429)
Kalleberg (2011), as other theorists have done, contrasts the emerging situation with that of the post-WWII period, which he sees as an exceptional period characterised by sustained growth, prosperity and security based on a social contract between
workers, employers and communities. The narrative Kalleberg describes in his ‘new structuralist’ analysis revolves around the following: increased mobility of capital and labour due to globalisation and ‘spatialization’; increased price competition due to globalisation and government deregulation in certain industries; increasing financialisation of companies and increasing interest in returns to investment due to leveraging and the shareholder model; reduced government intervention in the labour market and weakening of employment protections linked to ideological shifts and the ‘freeing up’ of markets and focus on the individual as responsible for their own situation; growth of the service sector and the replacement of skilled jobs with poor quality jobs as industries declined; the decline in union representation; growing inequality in terms of wages and unequal distribution of productivity gains between management and workers; and corporate restructuring in the pursuit of flexibility in order to respond to flexible specialisation and to improve image to stakeholders. In Kalleberg’s view the interplay of these drivers, particularly with the deregulation of markets, the weakening of unions and employment protections gave employers “relatively free reign to restructure employment relations” (p21) and resulted in an abandoning of the social contract that characterised the post-WWII period, paving the way for increases in precariousness and the polarisation of job quality mentioned above.
Many of the drivers and themes that Kalleberg describes are familiar, such as the impact of globalisation and increased foreign competition, along with a shift in the mode of production to greater flexible specialisation, which together put pressure on employers to seek labour market flexibility. However, the attention to institutional and structural change through factors such as the political choices and the role of government in deregulation, and promoting policies that weaken unions and employment protections, are an important distinction in his theory as it recognises the importance of factors other than the ‘inevitable global forces’ related to markets that characterised early theories and highlights the role of governments and other institutional actors. In addition, the focus on the weakening of labour market protections and the ideological shift towards viewing the individual as responsible for his or her labour market situation is notable here, as it is in this context that the practice of internships has emerged as a strategy for individuals to develop the skills and experience needed to transition into employment.
Other theorists have also argued that deliberate policy choices during the last 30-40 years linked to neo-liberalism have acted to weaken employment protections and increase employment insecurity. For example, Madrick (2012) has argued that,
amongst other factors, an over concern with inflation in economic policy since at least the early eighties led to a “low-wage, high unemployment policy regime in the rich world, and especially in the United States, for a generation” (p324), which has ultimately contributed towards the polarisation of jobs. This regime included combating inflation through low wages, high interest rates, attacks on unions and targeting unemployment at around NAIRU (Non-Accelerating Inflation Rate of Unemployment). Similarly, Heyes (2011) has argued that the selective adoption of ‘flexicurity’ policies by many countries in the EU since the recession, rather than encouraging flexicurity have instead led to increased flexibility for employers and increased insecurity for workers. These changes can be seen as paving the way for employers to make use of increasingly flexible and temporary forms of employment, of which internships might be considered as emblematic, in order to meet their resourcing needs without the long-term commitment that comes with employing someone on a permanent basis. Indeed, in relation to the ‘gig economy’ the recent Taylor review of modern working practices viewed flexibility as ‘important’, although not, it is noted, if it is too one-sided (Taylor, 2017).
The narrative of labour market change put forward by Guy Standing in The Precariat (2011) goes one step further. He argues that processes that occurred during what he terms as the ‘Global Transformation’ (i.e. the globalisation era from 1975 to 2008) have led to the rise of a new social structure in which there is a growing section of society that are increasingly subject to precarious forms of employment and other forms of insecurity (the eponymous ‘precariat’ of the title). Standing describes a range of different processes that have combined to erode labour-related securities, fracturing the previous class structures and swelling the ranks of this new emerging ‘class-in-the-making’. During this period, it is argued, the global economy has become increasingly integrated in a way it had never been previously and has become ‘disembedded’ from society as a whole. A process that occurred as “financiers and neo-liberal economists sought to create a global market economy based on competitiveness and individualism” (Standing, 2011, p26). Key processes and institutional changes identified in his analysis include:
The sharp increase in the supply of cheap labour associated with the entrance of emerging countries, such as China, India and Soviet bloc countries into the global market, which weakened the bargaining position of workers elsewhere putting downward pressure on wages, while simultaneously increasing the number of workers in precarious situations in these emerging countries due to questionable employment practices;
The increasing commodification of ‘the firm’ in recent years, as companies are bought, sold and split up by shareholders led by pension and private equity funds, which has been facilitated by changes in the laws and regulations governing these sorts of transactions, has led to an erosion of long-term relationships between employees and management based on trust, a decline of the firm as a ‘social institution’ and ultimately to outsourcing, offshoring and restructuring as companies push for flexible labour forces in order to respond to changes in demand;
The increasing pursuit of numerical, functional and wage flexibility, along with ‘occupational dismantling’ have weakened employment protections and made it easier to fire workers and replace them with temporary and agency staff, reassign them, reduce the costs of wages and associated benefits, and undermined the clarity of career structures.
Standing also identifies a range of other processes that have contributed to the growth of the ‘precariat’, such as changes in how unemployment is perceived and treated, the relative costs of transitions into and out of employment, the consequences of the financial shock of 2008, the dismantling of the public sector, the subsidising of low pay by the state, and the decline of social mobility. Standing argues that the result of these processes has been a reduction in labour-related security for some and a growth in the number of people who lack all seven of these1.
Again some of the themes discussed by Standing are familiar: the loss of jobs to emerging economies and downward pressure on wages due to increased global competition; increased employment insecurity related to the pursuit of flexibility by employers; a change in the nature of relations between employers, workers and government; and a decline in worker representation. In addition, Standing also argues that there has been a hollowing out of middle-income jobs citing research by Goos and Manning (2007) as showing that occupations in the top and bottom two
1 The seven forms of labour-related security are defined as: labour market security –
adequate income-earning opportunities; employment security – regulations to protect workers from arbitrary dismissal, etc.; job security – ability and opportunity to carve out a career; work security – protection against accidents and illness at work (e.g. health and safety regulations, work-time directives, etc.); skill reproduction security – opportunities to gain and make use of skills; income security – assurance of an adequate/stable income (e.g. through NMW, pay indexation and adequate social security benefits); and representation security – ability to have a collective voice in the labour market (e.g. through trade unions and the right to strike) (Standing, 2011).
wage deciles expanded significantly between 1979 and 1999 while those in the middle six shrank. This is a pattern that appears to have continued in the UK until at least 2007 (Goos, Manning and Salomons, 2009; Fernández-Macías, 2012). However, the novel element of Standing’s analysis is his proposition of a new occupational structure comprising of a global ‘elite’ at the top of the occupational hierarchy and an emerging ‘precariat’ at the bottom, alongside “an army of unemployed and a detached group of socially ill misfits living off the dregs of society” (Standing, 2011, p8). Interns are one notable group that Standing sees as comprising part of the ‘precariat’. Certainly, it could be argued that most interns are likely to lack at least most, if not all, of the seven labour-market securities that Standing describes, particularly in cases where they are unpaid and/or do not have a formal contract with their employer. Consequently, they could quite reasonably be considered as holding a precarious position in the wider labour market.
Although compelling, the evidential basis for this new class structure is not clear and some of the strata that Standing describes could be seen as fitting in with more familiar conceptions of class. For example, although he notes that the ‘core’ workers might be consistent with the existing notion of the ‘working class’ it could be quite reasonably argued that the ‘proficians’ and the ‘salariat’ might more simply be described as fitting in with common conceptions of the ‘middle class’. However, this minor criticism aside, there may certainly be some merit in re-assessing pre-existing conceptualisations of occupational and class structures in light of the current changes in employment. More serious criticisms of Standing’s analysis, however, have been levelled. For example, the extent to which the ‘precariat’ can really be thought of as being a ‘class’ and the evidence supporting this claim has been questioned, as has his claim that up to a quarter of the population might be considered as making up the ‘precariat’ (e.g. Kalleberg, 2012; Spencer, 2012; Conley, 2012). In defence of these criticisms Standing points out that in much literature discussion of the 'proletariat/working class' is often vaguely defined without people necessarily questioning it and points out that in his analysis the precariat might be considered as distinct because he argues that they have distinct ‘relations of production’ in that they are not only defined by employment insecurity but lack all seven forms of labour-related security (outlined above) (Standing, 2012). He further explains that the evidence to support his claims is laid out in much of his previous work (e.g. Global Labour Flexibility, 1999; and New Paternalism: Basic Security as Equality, 2002).
However, despite his protestations it may be worth exploring these criticisms further. For example, in Standing’s analysis it is not clear who is in the precariat and who is not. He notes that certain features are correlated with the precariat, such as precarious forms of work and lack of career prospects, but does not offer any clear defining features other than stating that they can be defined in that they lack all seven of the forms of labour-related security. However, even if this is the case it is not clear that all of the groups that Standing highlights in the book as being in the precariat are subject to a lack of all of these.
Both of the above theories of the increasing polarisation and precariousness of work share common themes with the earlier theories of labour market change outlined earlier in this chapter, such as the diverging experiences of different sections of the labour market such that for many work people employment is likely to be much more insecure than for others, and the role of global forces as drivers in this such as globalisation, technological change and increased integration and importance of financial markets. Of particular relevance to internships are the themes related to employers’ desire for greater flexibility and the ideological shift towards viewing the individual as responsible for his or her labour market situation. However, where these more recent theories differ from earlier theories is in highlighting the impact of political choices linked to neoliberalism and the weakening of trade unions in terms of creating an environment where flexible and insecure employment relations proliferate. In this sense, labour market change is seen as more than just the consequence of inevitable global forces, but rather as the result of political choices made on a local and global level. All of which, it could be argued, have resulted in a distancing between employers and workers, such that some groups face increasingly precarious labour market positions. Labour market entrants and young people, it is argued, may be particularly at risk of this due to their lack of labour market experience.