Issue 213 of SOCIALIST REVIEW Published November 1997 Copyright Socialist Review

Feature article: All in a day's work

Al Rainnie

'The nine to five job is a thing of the past. Teleworking, homeworking and outsourcing are here to stay and set to grow.' Roger Young, director of the Institute of Management (Guardian 16/10/95) 'The globalised market and new technology have put paid to the idea of a job for life.' Larry Elliott (Guardian 7/7/97)

Flexibility is the weasel word of the 1990s. The myth paints a picture of multi-skilled workers working hand in hand with their bosses and colleagues in teams. The reality is that flexibility is a one sided bargain, with workers expected to be at the beck and call of their bosses. A TUC survey in 1996 found over half of all workers in Britain expected their job to be less secure in the year ahead. The average 'lunch hour' is now 32 minutes long, with one in seven workers getting no time off for lunch at all.

On the other hand, for nearly 20 years workers in practically every office, shop and factory in this country have been bombarded by a management driven, ideological barrage. The onslaught is almost identical in every case. We are told that the forces of globalisation are driving the unfortunate though unstoppable demise of the full time job. The future is flexible jobs in a flexible firm in a flexible labour market. The message is that resistance is not only useless but in the end counterproductive. Therefore, when Tony Blair slapped down John Edmonds at the TUC conference for having the cheek to question whether job flexibility meant anything other than low pay, stress and insecurity, he jumped on a bandwagon that was already in top gear.

Under the Tory government, Employment Department economists claimed that this flexibility largely accounted for the UK's 'improved productivity and falling unemployment'. Blair is now singing from the same songsheet, arguing that Britain will remain the most open and flexible labour market in Europe.

There is, however, no evidence to support the idea that flexible labour markets increase the job creating capacity of an economy. In fact the reverse is the case. In July 1997 an OECD report stated that Britain's flexible labour market locked workers into low paid insecure jobs and had no positive impact on economic performance. More recently, Guardian journalist Larry Elliott has pointed out that growth rates in the archetypal flexible economies of the UK and the US were slower in the 1990s than the 1980s, which in turn were slower than in the 'inflexible' 1970s.

It is fairly easy to point to dramatic changes in the pattern of work, as 40 percent of British workers are now supposed to be part of the flexible labour force. In another echo of the return of Dickensian conditions it is estimated that around 2 million children of school age are employed in the UK. In the US, the largest private sector employer is the temp agency Manpower Inc with over half a million workers.

A recent report from the Future Foundation heralded the arrival of the '24 hour society'. This apparently represents the start of a social revolution where people work, shop and play at all times of the day and night. Globalisation and other competitive factors including the internet and telemarketing call centres all allow customers to shop and access services when they want. Technological changes enable much more homeworking and with it the fragmentation of working hours. At any time between 9pm and 11pm over a million people in Britain are working. Even between 2am and 5am the figure is over a third of a million. The Future Foundation expects these numbers to double in the next ten years. The new 24 hour society will create large numbers of new jobs, but they will not be traditional five days a week, seven/eight hours per day. Instead people will work for varying periods depending on circumstances and demand.

New entrants to the labour market are increasing the unpredictability and insecurity. For example, government attacks on student grants are being exploited by employers with 6,000 of Pizza Hut's 10,000 workers now being students. In one major supermarket chain around a quarter of all employees are students.

The most striking thing about full time jobs is the way that they still dominate employment structures. In 1996, over 15 million people worked full time, accounting for 70 percent of all employees. In 1995, full time workers accounted for nearly 90 percent of all hours worked, reflecting the fact that full time workers are working longer hours while for part timers, hours of work are declining. Writing in the Oxford Review of Economic Policy, economists Paul Gregg and Jonathan Wadsworth argue that there is a growing division in the labour market. Part time, self employed and temporary jobs are far more unstable than full time work. However, there is little evidence to suggest that full time, permanent posts have become more unstable since 1978. What has changed is that the labour market contains more unstable forms of employment than before.

However, there have been significant changes in the pattern of employment in recent years, with homeworking and self employment doubling and the number of part time workers rising to more than 6 million. Small firms (those employing less than ten people) now account for more than 90 percent of all businesses and employ over 2.5 million workers. The number of self employed is set to rise by around 800,000 between 1996 and 2006, with part time work increasing by 750,000 million in the same period.

Although there is little evidence that labour market deregulation caused the changes that have taken place, it is certainly the case that deregulation has caused already flexible jobs to get worse. This was fuelled by changes in the benefits system that frogmarched unemployed workers into 'flexible' jobs. So for example, deregulating the opening hours of shops has been of vital importance in driving the rise of part time work in retail. The SavaCentre nearest to me now stays open all Friday night as well as on Sunday. One major supermarket chain now has one workforce on a series of different contracts that cover Monday to Friday, students primarily cover Saturday and another workforce, often on second jobs, work on Sunday. The Future Foundation points to a general rise in 24 hour shopping, but one should be cautious. As the report has to admit, the vast majority of the population is not participating in the 24 hour society. The tills will still be packed at SavaCentre at 1pm on Saturday. There might be two open at 4am.

The state is also driving flexibility in its role as an employer, either directly or indirectly. Local government has been at the forefront of outsourcing through compulsory competitive tendering, and the health service has been at the forefront of strategic change, driven by financial cuts.

The outcome for Gregg and Wadsworth is a growing divide into a primary and secondary labour market. For others it is a divide between 'job rich' and 'job poor' households. New jobs are increasingly being taken by those with a working partner. In 1979 there were 1.2 million households where no adults were working. By the end of 1995 this figure had almost tripled to 3.3 million. One in five homes today lacks a single breadwinner. For Gregg and Wadsworth the gap between rich and poor is growing because of the divide between stable full time work and unstable forms. Unskilled workers are twice as likely to lose their jobs as those in the top quarter of the job market. Their future is likely to consist of short periods of work, on low hours and low rates of pay. People finding new jobs are paid only half the average wage of all jobs. Real earnings in jobs taken by those who have been out of work have barely risen since 1980! Unsurprisingly then the gap between low and well paid is getting wider. In 1979 a person in the top 10 percent of male employees earned around 2.5 times as much as a person in the bottom 10 per cent. The ratio is now nearer 3.75 to 1.

However, for a number of good reasons it is unlikely that we are facing an inevitable and unstoppable march to an unpredictable, insecure, job-hopping future. After years in which the decline of full time and the rise of part time work appeared inexorable and inevitable, in the first three months of 1997 full time male employment rose by 77,000. This followed an increase of 119,000 in male full time employment and 94,000 in female full time employment in 1996. The Financial Times commented that this could herald a reversal of structural trends in Britain. In some ways this is not surprising, in that as a major study of employers' use of labour flexibility carried out by the Policy Studies Institute found in many cases employers prefer to have full time, permanent workers.

The failure of teleworking or homeworking to grow significantly reflects the complex and expensive managerial control problems that arise from complicated employment patterns. In one of the fastest growing employment sectors, telebusiness units or call centres, workers are predominantly female, but full time. Over one million people will be employed in call centres by the early years of the next century and it is a seven day continuous operation. Only 15 percent of call centre staff overall are temporary and the work has been so subject to discipline that it is reminiscent of traditional manual work.

Changes in the labour market are more complex and contradictory than the ideological assault would have us believe. In a still crisis ridden capitalism, competition is driving managers under stress to try and manage by stress. In so doing they are increasingly stressing both people and production systems.

This goes some way toward explaining the hours paradox the fact that people in full time jobs are, on average, working more hours, while part time workers' hours are falling. Management are trying to get full time workers to work longer, but only get part time workers in for precisely the hours that management think they need them for. While the number of people working part time (particularly women) has increased dramatically since the Second World War, the average number of hours worked by part timers has fallen. In 1979, part timers worked, on average, 19 hours per week. This figure had fallen to 17.8 hours by 1996/97. Women are having to take a number of jobs to make ends meet. In 1992, 343,000 part time workers had a second job. By 1996/97 this figure had risen to 476,000. Karl Marx argued that there were two ways that capitalists could try and extract more surplus value (the source of all profit) from workers the first was by increasing productivity through intensifying work, or through investment in skills and new technologies; the second was simply by extending the hours that people worked. Under the pressure of continuing competition, employers are often using a mixture of both.

It is also worth remembering that not all moves towards part time, temporary or homeworking were the result of management exploiting the weakness of marginal forms of labour. In the mid 1980s a slight economic upturn coupled with the demographic timebomb (a decline in the number of 16-19 year olds in the population) meant that the inability of companies to recruit young, white, male workers forced companies to adopt flexible patterns of work that gave them a chance of recruiting women with children, older workers and black workers.

During the course of the 1980s we were told that a new enterprise culture was being born, carried along on a wave of small firms and self employment. Again myth and reality bear little resemblance. In fact, the most important changes taking place in the structure of capitalism were to do with large organisations. Far from dying out, in the 1980s large firms in the US and Europe underwent the longest and most sustained process of merger and takeover that the world had ever witnessed.

Although the headlong rush for growth slowed down as the recession set in, the dance of the dinosaurs resumed in the early 1990s. What has emerged is a restructuring of the relationships between ever larger chunks of capital. Marx predicted this describing it as the process of centralisation and concentration.

Yet the myth of the growth of small firms had a pernicious effect. For example, competitive tendering for local government services was driven, we were told, by the necessity of giving the private sector (small) firms freedom to take over from bureaucratic, uncaring, inflexible, expensive (unionised) local authorities. The reality is that where the private sector has taken over local authority contracts, it has been predominantly giant corporations which have hustled their way in. In NHS domestic services, five firms have taken 65 percent of private sector contracts, and in computer services generally six firms hold 60 percent of contracts. These firms are usually owned by or are subsidiaries of companies such as Fujitsu, AT&T, Cadbury Schweppes and General Motors.

Restructuring and redundancy forced many people into self employment. Hundreds of shops, hairdressers and repair plants were opened. The white collar equivalent produced a rash of small consultancy companies. Most of these firms went bust as quickly as they came into existence. Their founders were not the dynamic thrusting entrepreneurs of Thatcherite myth, but conscripts into the enterprise army.

The doom laden picture of a flexible future relies on a mythological picture of a golden age (the long boom) when everyone had secure, permanent full time jobs. However, the rise of part time work is a long term secular trend that set in after the Second World War. The fastest rate of increase in part time work was in the 1960s, not the 1980s and 1990s. If we accept the mythology then we can overstate the changes currently taking place and terrify ourselves into inactivity.

The Centre for Economic Performance at the London School of Economics reinforces the fact that full time workers still account for over 70 percent of workers, and that the average length of time that people stay in jobs has changed very little over the last 20 years. The report came to two important conclusions: that although changes have taken place in the labour market the pace of change has declined in the 1990s compared to the 1980s; and the pace of change in the last 20 years has been overstated, and is not dramatically out of line with historical experience.

The LSE study is reinforced by a report from the Policy Studies Institute (PSI) on 'Employers' Use of Flexible Labour'. This argues that despite all the hype over zero hours contracts, annualised hours and so on, the major form of flexibility in work is simple variation in the hours that workers actually work, principally thought the current epidemic of overtime working. For salaried staff this is principally unpaid overtime, for waged workers, paid overtime. Most surveys in the late 1980s, according to the PSI, concluded that few employers had adopted new flexible employment patterns, and where non-standard forms of employment were adopted, they were for traditional reasons such as covering peaks in demand, covering staff on leave or for tasks of limited duration.

Subcontracting has increased in recent years, but from a very small base. The principle increase in short term contracts has been in the public sector, and large firms have doubled their use of temporary workers, but rely in the main on the use of overtime as the main form of flexibility. Flexible labour has been mainly concentrated in medium and large firms and therefore cannot be explained only by a growth in employment in sweatshop small firms. Not only is the extent of flexibility overstated, but there is no set pattern of change across all industries.

Shirley Dex and Andrew McCulloch suggest that in 1987 there was no evidence that employers were attempting to make strategic use of flexible labour. Nevertheless by 1994, a quarter of all working men and half of all working women were in non-standard jobs.

However, they reinforce the point that the most dramatic changes took place in the early 1980s. Although a half of all working men and three quarters of working women will suffer some form of flexible working practice during their working lives, on average individuals spent less than a third of their working lives in flexible forms of work. Dex and McCulloch argue that both the numbers and the percentages of self employment and part time work slowed down in the early 1990s. Moves towards temporary contracts have also been greatly exaggerated, with over 90 percent of full time workers still being on permanent contracts with little evidence of a significant shift away from this picture in the 1990s.

The changes taking place in organisations and employment and the reasons underlying them have potential consequences for management that are precisely the opposite of what is intended. Although new production systems are stressing both workers and the systems themselves, the changes are being dressed up in the cuddly language of human resource management. This emphasises team working, empowerment, and involvement but survey after survey paints a picture of rock bottom morale with workers cynical and dismissive, but unwilling to take action. The outcome is a brooding resentment, occasionally exploding into flashes of resistance, with workers tied into increasingly vulnerable production systems. Even management can realise that there may be problems. Even the gurus of 'downsizing' in the US have retracted, saying downsizing had become dumbsizing. Their brilliant insight was that if you threatened people's jobs, sacked their friends and increased stress at work at the same time as forcing wages down, then, surprise surprise, morale, and along with it productivity, collapsed.

This is critical, because capitalists are caught in a trap. They need a basic level of commitment from workers to keep production processes running, and yet also need to be pushing productivity at all times. It is a circle that cannot be squared successfully for any length of time.

But will this mean a new friendly form of Tony Blair type capitalism? Absolutely not. Companies can't help themselves, they are caught in the grip of larger forces especially competition. Take the example of Kodak. When George Fisher arrived as new chairman in the mid 1990s, he announced that downsizing and mass sackings had demoralised too many people. The future could not lie in constantly cutting costs, but in rekindling growth, a task that would be impossible with a demoralised and inward looking workforce. Faced with falling profits, however, Kodak has just announced the first round of a new set of redundancies that could lead to the destruction of up to 10,000 jobs.

The recent UPS dispute graphically demonstrated the potential for new forms of flexibility to generate strike action and unity between full time and part time workers. When General Motors was recently paralysed by a strike at the Pontiac plant, outside Detroit, the action was driven by what the Financial Times called 'joyless prosperity'. The return to profitability had been driven by job loss, outsourcing and pressurising workers. Holidays couldn't be taken, overtime became compulsory and toilet breaks difficult to take. Pickets said that they were simply being driven far too hard.

Undoubtedly there are changes taking place in the nature of work, but the new work systems are increasingly vulnerable to action by workers who are ever more distrustful of the weasel words emerging from management under pressure. Work and the working class are evolving and changing but organisation and action at the workplace remain central to any attack on the system as a whole.

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