The Political Economy of Household Services in Europe

Clément Carbonnier, Nathalie Morel

• Publisher: Palgrave Macmillan
• Year: 2015
• Print ISBN: 9781349577286, 9781137473714
• eBook ISBN: 9781137473721
• Topic: Politics & International Relations
• Subtopic: Labour Economics
• Index: Politics & International Relations

This edited volume assesses from a variety of perspectives the policies introduced to support the development of household services across Europe. It highlights the impact of these costly policies on the creation of low quality jobs and on labour market dualisation, and questions their social and economic outcomes.

1

Taking the Low Road: The Political Economy of Household Services in Europe

Nathalie Morel and Clément Carbonnier

1.1 Introduction

While domestic employment had virtually disappeared in Europe over the course of the 20th century and had, by the 1970s, become widely seen as ‘obsolete’ and a ‘pre-modern form of work’ (Coser, 1973; Chaplin, 1978), it has experienced a real boom for the past 15 years or so.

This development of domestic employment has been highlighted in a number of works, which usually emphasize the role of global socioeconomic transformations to explain the expansion in both the demand for and supply of paid domestic labour. Transnational economic inequalities and migrations – especially the strong rise in female migrations – the development of a reserve of unskilled labour, the transformations in family structures, the rise of new social needs linked to population ageing and the increase in female employment, the absence or insufficient provision of child- and eldercare services, and the transformation in sociocultural norms have thus been underlined (Andersson, 2000; Hochschild, 2001; Cancedda, 2001; Yeandle, 2002; Lutz, 2008; Williams and Gavanas, 2008; Gallotti, 2009; Widding Isaksen, 2010; Williams, 2011). Persistent gender inequalities in the performance of unpaid domestic tasks, despite women’s growing investment in the labour market, are also seen as another factor leading to the outsourcing of domestic tasks (Gregson & Lowe, 1994; Cancedda, 2001; Bittman et al., 2003).

Much of this research has focused on the role of migrants in performing domestic and care work, and on the role of migration policies or migration regimes in facilitating or promoting the use of migrants for carrying out domestic work, highlighting the increasingly transnational dimension of care, known as the ‘global care chain’ (Parreñas, 2001; Ehrenreich & Hochschild, 2002; Bettio et al., 2006; Lutz, 2008; Widding Isaksen, 2010; Gavanas, 2010; León, 2010; Kofman, 2010; Van Hooren, 2012; Williams, 2012; Triandafyllidou, 2013; Anderson & Shutes, 2014). The interaction between migration regimes and care regimes has also been underlined: in countries where social care services are lacking or very insufficient (Southern Europe and the UK, for instance), recourse to – essentially migrant – domestic workers to provide in-home care has become widespread, whereas it remains less developed in countries (such as the Nordic countries) that provide high levels of social care services (Bettio et al., 2006; Williams & Gavanas, 2008; Van Hooren, 2012).

Thus, there is now a wealth of literature dealing with the development of domestic employment, especially that which is performed – legally or not – by migrant workers, but one aspect that has been missing from these analyses is the fact that many countries in Europe have, over the past decade or two, developed specific public policies to actively promote the development of domestic services.

This is particularly the case in Continental and Northern Europe, where different measures have been implemented to foster the demand for domestic services, typically by subsidising household demand through tax credits and cash benefits, but also by facilitating recourse to domestic labour through a simplification of employment procedures and a flexibilisation of labour market regulations. The domestic services thus supported range from child- and eldercare services to cleaning, ironing, gardening, small repair work, etcetera; for all households irrespective of care needs. The justifications for the introduction of these policies have been multiple but similar across all these countries, ranging from job creation and curbing informal work, to responding to care needs and facilitating work-life balance, with a clear emphasis across all countries on creating jobs for the low-skilled.

The development of domestic employment is thus not only driven by a natural growth in supply and demand: there are, in fact, policies that structure this supply and demand. As such, it seems warranted to speak of a political economy of household services, the delegation of domestic work and the development of household services being encouraged and structured through specific political and economic strategies, which have been actively promoted by national governments, but also by the European Commission since the 1990s (Morel, 2015).

While the cost of these policies for the public purse is far from negligible, and while these policies contribute to the structuring of a specific labour market sector, these policies have not yet been the focus of scholarly analyses – nor, interestingly enough, of policy evaluations by the different governments that have promoted such policies. This volume attempts to fill this gap in a way which is necessarily explorative, given the limited available data and analyses or evaluations of these policies. In analysing these policies, a multidisciplinary approach has been privileged, in an effort to highlight and address in a comprehensive way the multiplicity of issues these policies raise. Such issues range from the labour market outcomes of these policies, to their distributional effects, their impact on the transformation of welfare systems, and their symbolic effects in terms of defining the value of care and domestic work, or in terms of structuring a social division of labour according to categories of gender, ethnicity and class. The contributors to this volume thus come from the fields of political science, economics, sociology and law.

The geographical focus of this book is on the Continental European and Nordic countries (namely France, Germany, Belgium, Austria, Sweden and Finland), which have in common the fact that they have all introduced specific schemes to promote the demand for a variety of domestic services that go beyond care-related services. This distinguishes these countries from others in Europe such as the UK, Spain or Italy, where the demand for services in the home has also been subsidized, but only for care services – typically through cash-for-care schemes. Indeed, as the different chapters illustrate, the policies that have been set up across Continental and Northern Europe do not simply aim to address the growing care needs of our contemporary societies (even if that is also one of the objectives of these policies) but also are fundamentally part of an economic strategy to foster the growth of low-end service sector jobs in countries where labour market and welfare institutions have been understood as having constrained such development (Esping-Andersen, 1991, 1999; Iversen & Wren, 1998; Scharpf & Schmidt, 2000).

Indeed, we argue that the policies that underpin the development of household services in Europe can best be understood in light of the particular interaction between welfare regimes and labour market institutions that characterise these countries, where strongly regulated labour markets combined with a compressed wage structure and relatively high wages even for the low-skilled, along with generous social protection schemes, have been understood as constraining employment growth in the postindustrial or ‘service’ economy.

The importance of this interaction between welfare regimes and labour market institutions (or employment regimes) for understanding postindustrial employment trajectories has been highlighted in a number of works which have underlined the constraints that different welfare state and labour market institutions bring to bear on the development of a service economy and on employment growth, especially with respect to labour-intensive services such as personal or domestic services (Esping-Andersen, 1991, 1999; Iversen et Wren, 1998 ; Scharpf et Schmidt, 2000). Thus, for Esping-Andersen (1991, 1999), different welfare state-employment regime interactions produce different postindustrial trajectories, influencing not only the rate of growth of services, but also the relative emphasis on social welfare activities as opposed to personal services. These interactions also influence the skill and occupational composition of the labour force, as well as the gender and racial/ethnic distribution of jobs (Esping-Andersen, 1991:150).

Commenting on the situation in the 1990s, Esping-Andersen (1999) identified three different trajectories in Europe in the transition to a postindustrial economy, each one saddled with its own set of tensions. In the liberal welfare state trajectory, such as the UK’s, the development of a service economy, and not least of personal services such as the domestic services considered here, has been made possible thanks to a deregulated labour market, which makes it possible to adjust wages to the productivity differentials between industry and services, and to important economic inequalities that support both the demand and supply of services. This has lead to a strongly segmented labour market, not least according to categories of gender and race or ethnicity.

In the Continental and Northern European countries, the development of a service economy has been more difficult because the labour market and welfare state institutions have allowed wages in the less productive service sector to follow wages in the industrial sector, generating relatively high wages and lower wage dispersion, thus constraining the demand for services. The Nordic countries have nevertheless developed a broad service sector, maintaining high wages and low wage dispersion, by developing a wide range of public services, which has also enabled a high employment rate among women. In Continental Europe, by contrast, the service sector, and especially personal service jobs, have remained largely constrained or even disappeared, and most household service activities have remained familialised rather than externalised to the market (as in the Liberal way) or to the State (as in the Social Democratic way), which has also resulted in significant constraints on the employment of women, whose employment rates in the 1990s remained far below those of the Northern Europe and Liberal countries. This analysis underpins the ‘jobless growth’ diagnosis for Continental Europe, which a number of scholars have underlined since the 1990s (Iversen & Wren, 1998; Scharpf & Schmidt, 2000; Dølvik, 2001) – an analysis also put forth by the European Commission in its 1993 white paper on ‘Growth, Competitiveness, Employment’ (Morel, 2015).

Iversen and Wren (1998) have also analysed the problems which different countries face in the transition to a service economy. As a number of other analysts, these authors consider that employment growth in the service economy will come mainly from the development of jobs in the low-end labour intensive services, and in particular through the development of personal services. For Iversen and Wren, governments wanting to develop these services face a trilemma: maintaining budgetary restraint, maintaining low wage dispersion, and increasing service employment, with only two of these objectives being compatible at a time. To develop service jobs, the State must either strive to deregulate the labour market and increase wage inequality because of the high price elasticity for these services and limited productivity gains associated with these jobs, or it must develop these jobs through the public sector (and maintain higher wages). But this comes at a high cost to public finances – an option which seems less and less possible in a context of increased fiscal discipline in Europe. Countries, like those of Continental Europe, that are unwilling to deregulate the labour market as the UK did, and are unable to create Scandinavian-style welfare states, get stuck with low employment levels.

Finally, while these different works have underlined the constraints that the different welfare state and employment regimes bring to bear on the development of service sector jobs, another set of scholarship has looked at the transformations of employment which the tertiarisation of the economy brings about, a transformation which is often associated with a destandardisation of employment relations, an increase in inequalities, and the deterioration of the situation of low-skilled workers (Castells, 1996; Dølvik, 2001 ; Bosch & Lehndorff, 2005 ; Gautié & Schmitt, 2010 ; Gautié, 2011). However, as a number of these works have highlighted, these effects have been differentiated according to the different types of welfare states and employment regimes. Thus, as Caroli and Gautié have underlined, until the late 1990s, the countries of Continental and Northern Europe seemed to have avoided the sharp rise in inequalities that could be witnessed in countries such as the United States and the UK. Yet, in a 1994 article, Paul Krugman suggested that the high unemployment rate witnessed in most of these countries was but the flip side of the same coin: the economic transformations, largely similar across most countries, had affected low-skilled workers unfavourably. Where wages could be adjusted downward (as in the United States), the rise in unemployment had been contained. In contrast, in countries (such as those of Continental Europe) where labour market institutions (unions, minimum wage, etc.) hampered this adjustment, unemployment rose sharply, especially for less skilled workers (Caroli and Gautié, 2008: 38).

In light of this, the policies implemented in Continental and Northern Europe may well be understood as an attempt to resolve this ‘trilemma of the service economy’ and lack of low-end service sector employment growth. The promotion of the domestic services sector through specific policies can thus be interpreted as contributing to the reframing of the political economy of these countries, which begs the question of the impact of this reframing on both labour market institutions and the welfare state.

Indeed, as the different chapters in this book illustrate, these policies should also be understood in relation to the ongoing transformations of the welfare state. The need to respond to new social needs, especially child- and elder-care, due to women’s increased labour market participation and to population ageing, has been one element of these transformations, but new ideas about the respective role of the State, the market, and the family in responding to these needs, as well as a drive towards the marketization of social services, also play important parts in these transformations. As the different chapters show, the policies implemented to foster the use of domestic services are part and parcel of these transformations, and have clearly contributed to the marketization of care services, with important implications from a distributive perspective.

The aim of this book is thus to analyse how the development of policies to promote domestic services across Europe is part of a new political economy of the postindustrial society. This involves identifying and analysing the political and economic strategies that underpin these developments, but also analysing how the policy rationale, the policies implemented and their outcomes, are mediated through, and have an impact on, national labour market and welfare state institutions.

The first part of this book is dedicated to analysing the politics behind the policies, examining the roles of political actors and interest groups, the aims pursued with these policies, the arguments put forward, the ways in which the issues have been framed, and the debates these policies have given rise to. The second part of the book examines the labour market outcomes of these policies, focusing on the forms and quality of employment in the domestic services sector, and how these outcomes interact with, or modify, existing national labour market institutions. It also highlights both the symbolic and economic effects of these policies in terms of constructing domestic and care services as low-skilled, low-value work, ...

Table of contents

• Cover
• Title
• 1  Taking the Low Road: The Political Economy of Household Services in Europe
• Part I  The Politics of Subsidising Domestic Services in Europe
• Part II  Taking the Low Road? The Development of a Low-End Service Economy for Europe
• Part III  Money Well Spent? Services Used, Beneficiaries and Employment Effect of These Policies
• Index