Flexibility, Mobility and the Labour Market

George S. Callaghan

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9780367075484
• eBook ISBN: 9780429664687
• Topic: Business
• Subtopic: Business General
• Index: Business

First published in 1997. Politicians of all shades argue that the labour market should be more flexible and workers more mobile. But what does this mean in reality? How flexible and mobile are workers likely to be? Is there an ideological base to the language of flexibility? These are some of the issues covered in this book. Data from a large factory and office is used to argue that the macro labour market consists of non-competitive work groups where strongly held views and values represent a substantial barrier to simplistic definitions of flexibility and mobility. The analysis takes place in three chapters, dealing with recruitment for work, skills used in work and perceptions of different types of work and workers. The findings suggest that non-economic forces (such as institutional, social, historical and political phenomena) strongly influence the creation of separate work cultures. Furthermore, it is argued that the reason for differences between work groups being articulated in a defensive fashion reflects the climate of fear in the labour market, where flexibility is associated with a loss of the (often limited) power, control and influence workers have over their position in the labour market.

1 Introduction:
Flexibility in labour markets

… 1979 saw a change of emphasis in economic policy, with the election of a government committed to strengthening the role of market forces. Indeed, a competitive, efficient and flexible labour market is the overarching aim of the government’s labour market policies. (Beatson, 1995: executive summary, emphasis in original)

Flexible labour markets play a key part in a competitive economy. They allow employers to deploy their workforce in the most efficient way. They allow workers to make the most of their skills and experience. And they bring supply and demand for labour into balance. (Department of Trade and Industry, 1994: 50)

These extracts from Government sources illustrate the central importance of flexible labour markets to Government economic policy. This policy has developed within the context of severe macroeconomic shifts in demand for labour, in particular the shift from manufacturing to service work. From 1979 to 1993 employment in the services sector increased from 58.5% of all UK employees or some thirteen and a quarter million people to 72.8 % or some fifteen million people. Over this same period employment in manufacturing fell from 31.4% of those in employment, representing around seven million employees’ to 20.4%, or around four million (Employment Department Group, 1994), a trend which is seen as continuing (Skills and Enterprise Network, 1993). The Employment Department, in the White Paper ‘Training for Employment’ (1988a) commented of this economic restructuring:

In nearly all advanced industrial economies, there has recently been a declining trend in the number of jobs in manufacturing, especially in unskilled occupations. The recent vacancy survey commissioned by the Department of Employment suggested that currently only 17% of vacancies are for unskilled manual jobs. The prospect is of increasing demand for skilled workers, and continuing growth in the commercial and service sectors. (Employment Department, 1988a: 15)

This restructuring of the economy has caused immense upheaval in the world of work, with shifting demands for labour and consequent changes in employment opportunities, making (as the above statistics illustrate) the position of those in manufacturing particularly vulnerable. These changes have occurred not just in the United Kingdom but have been common across the industrialised (Western) world (OECD, 1989; OECD, 1994). This shift from manufacturing to service sector employment has been accompanied by a resurgence in neo-classical ‘monetarist’ economics, evident through the election of Margaret Thatcher in the United Kingdom in 1979 and of Ronald Reagan in America in 1980. These elections ushered in an ideology which looked favourably upon the free market and sought to introduce (or extend) the rigour and discipline of competition to all aspects of economic and social life. Recent commentators have written of this:

The search for flexibility was also associated with moves at a more macro level to change the nature of the employment relationship, in fact to deregulate labour markets so that they resembled the labour markets of neo-classical theory. (Rubery and Wilkinson, 1994: 5)

Since 1979, then, the role of market forces has been emphasised above all others and the policies flowing from such an ideological outlook were focused particularly in the field of employment, where the aim has been to sweep away what were seen as regulatory and legislative restrictive practices. As Margaret Thatcher and Nigel Lawson commented in their separate memoirs:

… the ‘supply side’ reforms were highly successful. These were the changes which made for greater efficiency and flexibility and so enabled British business to meet the demands of foreign and domestic markets… Trade union reform was crucial. The most important changes were those made between 1982 and 1984 but the process continued right up until I left office… These reductions in trade union power, together with the reinforcements of individual trade unionist’s rights and responsibilities, were crucial to a properly functioning labour market, in which restrictive practices were overcome and unit labour costs kept down below the levels they would otherwise have reached. The abolition of that monument to modem Luddism - the National Dock Labour Scheme - was another blow to restrictive practices. (Thatcher, 1993: 669)

In a market economy and a free society it is plainly a matter for business and industry itself to determine rates of pay, which in turn in the long run determine the level of employment; and the responsibility of government is essentially to provide the right overall economic climate. But there were some specific areas in which government action was needed, and to a considerable (although incomplete) extent that action was taken. One such area was that of the long-established statutory Wages Councils, which set minimum pay rates in certain low-pay industries. These were not, as I would have liked, abolished; but their powers were greatly limited and (outside agriculture) those under twenty-one were removed from their scope altogether. (Lawson, 1992: 432, 433)

Anything which was perceived as standing in the way of market forces, such as Trade Unions and Wages Councils, were to be removed.¹ In addition, Welfare benefits, which were seen as a disincentive to look for work, also came under attack early in the first Thatcher administration, with benefit calculations being changed to increase in line only with prices and not, as was previously the case, with earnings (Johnson, 1991). Through deregulation the labour market was to become more flexible and more responsive to market forces as exercised through the price mechanism. Throughout the 1980s, then, the concept of flexibility emerged to sum up at once both the nature of change in the labour market which had been caused by economic restructuring and the change in the nature of labour market participants and their work which would allow economies to capitalise on such restructuring. As Beatson (1995) has commented:

Flexibility is not an easy concept to define and measure. It is, however, concerned with the markets ability to adapt and respond to changing conditions. (Beatson, 1995: Executive Summary)

Despite the ambiguity surrounding the concept of flexibility the centrality of market forces is clear, as is the importance of creating the conditions in which the market can operate efficiently. The subsequent flexibility debate has manifested itself with different features of flexibility, in particular around discussions of the ‘flexible firm’ and ‘flexible specialisation’, which deal respectively with changes to the organisation of the workforce and with changes to the nature of the production process.

Turning firstly to the ‘flexible firm’, this was popularised by a brief but influential paper by Atkinson (1984), ‘Manpower strategies for flexible organisations’, where the recommendation for management was to develop a ‘flexible firm’ which can rapidly vary the number, type and working time of employees to meet changing market conditions and capitalise on changing technologies. The responsiveness of output is, in large part, seen as related to workers offering two main kinds of flexibility: functional and numerical. ‘Functional’ flexibility refers to a situation where traditional lines of occupational demarcation are removed and a group of core workers is created who are ‘multi- skilled’ with the ability to ‘multi-task’, these workers are likely to be in secure full time employment. ‘Numerical’ flexibility, on the other hand, refers to a more peripheral group of workers, whose numbers may be increased or decreased according to short run changes in product demand. In addition, these workers are more likely to be on short term contracts and/or part time working arrangements. Atkinson went on to expand this model (Atkinson 1985a, 1985b; Atkinson and Gregory, 1986; Atkinson and Meager, 1986), further developing and recommending a labour market which is defined by dualism, with a ‘core’ group of stable employees being supplemented by a more insecure ‘periphery’ group. The continuing significance and strength of such an approach is evident not only from the Acts which have been passed relating to labour law (Deakin, 1986; Hendy, 1993) but also from a number of recent government publications aimed at employers and employees (Employment Department 1991, 1993a). For example, in A guide to flexible working the Employment Department recommends flexible working both for the employer and the employee:

For the employer: flexible working arrangements can make a business more competitive and attractive to potential employees. It may help an employer meet production deadlines or provide a better service to customers. It may reduce a business’s staff turnover and cut overheads. It may also attract a wider range of applicants for jobs.

For the employee: many people, including those with domestic responsibilities, some people with disabilities and some older workers, have long recognised the advantages that flexible working can offer them. In the 1990s other people, who have traditionally worked a set 35 - or 40 - hour week on their employer’s premises, are becoming aware of these advantages. (Employment Department, 1993a: 3,4)

The flexible firm theories have, however, come in for some criticism (Pollert, 1988a, 1988b, 1991; Marginson, 1991; Elger, 1991; Curry, 1993). The main thrust of the criticism has been not on a denial of changed working practices per se but of the overwhelming emphasis given to the supposedly radical disjuncture associated with these changes. These authors do not deny or criticise change for its own sake, rather they argue that commentary and analysis should be placed in historical, political and social context. Thus changes in working practices should not be seen as a ‘natural’ development but instead as part of a continuing process of negotiation between those involved in the labour process. Such a process is characterised not by ‘natural’ development down any one route but by continuous communication, involving both co-operation and confrontation and leading to a constantly shifting consensus.

The second major feature of the flexibility debate has become known as ‘flexible specialisation’ (Piore and Sabel, 1984; Piore, 1986a, 1986b; Sabel and Zeitlin, 1985; Murray, 1987; Tolliday and Zeitlin, 1987). This movement towards ‘flexible specialisation’ was seen as being caused by two factors: changing (and more specialised) consumer demand, and advances in technology which allowed small batch production to meet niche market demand. These two factors were seen as facilitating a move away from ‘Fordist’ mass production, where automation and mechanisation combined to produce low per unit cost output for a standardised mass market, and towards ‘post-Fordist’ specialised production with the use of craft skills to meet the demand for changing, and more eclectic, consumer tastes (Urry, 1988). Flexible specialisation was seen as offering a system which would satisfy changing patterns of consumption, capitalise on changing technology and assure sustained economic growth. The response from academics, however, has been mixed, ranging from the explicitly critical (Williams et al, 1987; Pollert, 1988b, 1991; Smith, 1991) through the critical acceptance of the French regulationists who describe the emerging regime as ‘neo- Fordism’ and see it as including either the potential for increased worker involvement or increased capitalist control (Palloix, 1976; Aglietta, 1979; Lipietz, 1987), to writers who are more positive about the perceived changes and recommend policies which would bring about, or speed up, the move towards flexible specialisation (Piore and Sabel, 1984; Hirst and Zeitlin, 1988, 1989; Scott, 1988; Zeitlin, 1988; Murray, 1989a, 1989b). Criticisms of the flexible specialisation school have included allegations that they are, in terms of industry and area, empirically selective (Williams et al, 1987; Hyman, 1988; Pollert, 1988b, 1991; Amin, 1991; Curry, 1993); that there is a false dichotomy between mass and specialised markets, suggesting that during the period of ‘Fordism’ there still existed small scale production demanding craft skills and also asserting that mass, ‘Fordist’, methods of production to meet the mass market demands are still prevalent in markets such as motor vehicles and consumer electronics (Williams et al, 1987); and on the extent to which these new flexible specialisation methods of production will, apriori, feed through into better conditions, and more control, for workers ( Elger, 1987; Rubery et al, 1987; Kelley, 1989).

Pollert (1988b) argues that flexibility in general and the flexible firm and flexible specialisation in particular is rooted solidly in a pro-market ideology:

… there is a much wider ideological message of social integration. The ‘core’ and ‘periphery’ model is one of organisational balance, labour process flexibility in the one supplemented by labour market flexibility in the other. The ‘flexible specialisation’ analysis is likewise based on dual labour market analysis as a model of dynamic equilibrium. It rejects an analysis of capitalism as a system based on contradictory class interests, and wholeheartedly supports market regeneration. It poses a new equation of sectoral and productive balance, which is healthier for markets…. The convergence between these perspectives, and the neo-classical revival of the enterprise economy, individualised competition and policies of employment deregulation and attacks on trade unionism lead one to question why such a broad ideological consensus should have developed. Capitalist crisis, and the lack of control by nation states over the system may predispose the relinquishing of policies of control, towards an emphasis on the primacy of ‘markets’, raising economic flexibility to be the panacea. (Pollert, 1988b: 68, 71)

The theme, therefore, running through the two characteristics of flexibility which have received most attention from academics - the flexible firm and flexible specialisation - is of the equilibrating power of the market and the need to remove rigidities (in the nature of working practices or method of production) in order for the market to function effectively. There is an additional aspect of flexibility, however, which has received less attention from academics - this the need for occupational and industrial mobility.

The Government have argued that if the labour market is to operate flexibly the workforce must not only accept different working patterns and routines but must be mobile in response to changing labour market demands, both in terms of moving to where the work is and in doing work in different industries and occupations. That this is an important policy priority for the Government is clear from extracts from Employment Department publications on labour market flexibility:

In a flexible labour market, labour should be mobile. Labour mobility has a number of dimensions. It can be thought of as the degree to which people are prepared to move, in response to labour market phenomena, between jobs, industries, occupations and localities. (Beatson, 1995: 54)

(labour mobility)… describes the movement of workers to different jobs, occupations and geographical areas according to changing economic conditions. It can refer to the level of movement within the same company, between firms or industries and between different local labour markets. (Watson, 1994: 240)

In addition, the Government commented in an Employment Department White Paper entitled Employment for the 1990s that:

The demands of the 1990s, with more intense international competition and a more rapid pace of change, will highlight the need for a better trained and more flexible labour force. The fact is that in spite of many improvements we are not, even now, training enough of the kinds of people we need… The aim must be a system which enables individuals to build on their skills and experience throughout working life; meets the needs of individuals and employers; and allows mobility between jobs, between education and training opportunities, and between industries and occupations. (Employment Department, 1988b: 28, 32)

The aim, then, is for workers who are employed in industries typified by low demand (or rapid technological change) to ‘re-skill’ (throughout their working lives) and move to other jobs in other occupations or other areas. It is difficult, however, to measure the extent of such mobility, as there have been very few studies of industrial/occupational mobility. In one of the few statistical studies (from the Labour Force Survey and detailed in chapter three) there is evidence that around one sixth of job changes involve a change between manufacturing and service sectors and around one eighth a shift from manual to non-manual work. It is this gap in the research which this work aims to partially fill - to complement the picture of industrial restructuring and industrial/occupational mobility emerging from quantitative work with qualitative material. Using case study evidence from two firms at opposite ends of the industrial spectrum - an insurance office (Bristol Insurance) and a laminating factory (Bristol Laminated) - analysis is undertaken in order to determine the probability of such mobility and the extent of any barriers which may stand in the way of movement. It is argued that by choosing firms which are on contrasting sides of industrial restructuring it will be possible to more fully understand the social, historical and institutional forces which shape difference and by so doing build up a more accurate understanding of the nature and functioning of labour markets - are, for example, labour markets characterised by competition or non-competition and, if the latter what are the forces which serve to create such bounded labour markets. The focus of the study was on two industrial groupings but the workers interviewed in these firms also tended fell into two occupational groupings - manual and non-manual - so the findings reflect not only industrial differences but also, to an extent, occupational differences.

To turn briefly to the detail of the case studies, attention was focused on three areas: recruitment, skills and perceptions of the work and workers in each sector. Looking firstly at recruitment, central to increasing flexibility and ensuring the ‘efficient’ workings of the market, is the deliberate construction of a labour market where information on employment opportunities is open to all and where the most able and efficient candidate will get the job. In such an environment informal recruitment channels (i.e. personal contacts) are seen as barriers and rigidities which stand in the way of flexibility and whose influence must be reduced and eventually removed (Skills and Enterprise Network, 1993). Given, therefore, the central importance of recruitment practices to creating a free and flexible labour market one of the major themes of inquiry was the nature of and attitude to different recruitment channels in and among case study respondents. Is it is the case, for example, that respondents view and value, understand a...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Contents
• List of tables
• List of figures
• Acknowledgments
• Preface
• Chapter 1 Introduction: Flexibility in labour markets
• Chapter 2 The nature of labour markets
• Chapter 3 Studying labour markets and labour forces
• Chapter 4 Recruitment of labour
• Chapter 5 Labour and skill
• Chapter 6 Work and workers
• Chapter 7 Conclusions: Prospects for the future
• Appendices
• Bibliography
• Index