Since I mentioned flexibility in my previous post, now is a good time to mention a great neoliberal invention that is supposed to sound good: flexi-security or flexicurity. Flexi-security refers to (1) flexibilization of the labor market, (2) social security and (3) rights for the unemployed. It is supposed to be a win-win system for employers and workers. It was especially popular in European countries.
How does it work? Well…
“‘Flexicurity’, it turns out, is the Sellafield of labour market policies in Europe. At the height of market euphoria after the fall of the Berlin Wall, everybody seemed to propagate flexibility and deregulation as the solution to the problems of unemployment, low growth, inflations, and lack of innovation. However the great promises of flexibility did not materialise. Growth remained below the long-term average, unemployment remained rather high and productive growth sluggish. Only profits started to grow, while wages and real investment stagnated. In the European context of inclusive societies, social dialogue, comprehensive welfare states and labour rights, flexibility increasingly became a hard sell.
This was the moment when flexicurity entered the stage. As part of a model provided by Denmark, the European public was told that while there might not be a free lunch, there was nonetheless a ’win-win’ situation. In a nut shell, flexicurity boils down to the promise that ‘No one has a right to his/her job, but everybody deserves a chance to have one’.
The reasoning goes as follows: Globalisation and enhanced competition requires greater flexibility by companies. They must have the ability to hire and fire with the lowest possible transaction costs to adapt as quickly as possible to changing market conditions. Workers need to accept this. However, giving up workplace protection should be compensated through the provision of social security that guarantees income security while strengthening employability through active labour market policies. Finally, in order to incentivise workers to take up another job, unemployment benefits would decrease the longer the worker claims the benefits. The latter is euphemistically described as ‘activation policy’.”
Denmark was the model for this. The idea was that businesses would be given more flexibility. In exchange, they would pay higher taxes that would support a strong social security and unemployment protections system. All well and good, but when the model got translated to other European countries…
“Governments have pursued flexibility policies by simultaneously reducing work place protection and unemployment benefits. I am not aware of major policy initiatives that increased social security provisions in recent years in order to compensate for the reduction in protection against dismissal or the increase in a-typical and largely precarious employment.
Flexicurity largely disguises the shift of the flexibility burden from the entrepreneur to the worker. In the old days, entrepreneurial profits were justified because the entrepreneur was the risk taker. He could not enjoy the ‘nine to five’ standard working day of the employees. Under the flexicurity regime, workers are requested to give up this stable employment relationship. They are expected to accept instant redundancy, high mobility, constant changes of profession, temporary contracts, income volatility etc. . What this injection of fear, insecurity and unpredictability means for peoples’ lives, their families and their communities is not part of the equation.
After more than a decade of flexicurity, it is time to face up to reality. Flexicurity did not deliver. While preaching flexicurity, the EU is in fact promoting labour market flexibility that results in precarity for millions of workers throughout Europe. The word ‘flexicurity’ cannot disguise the reality might more more accurately be called: flexploitation.”
That is indeed what is happening at the EU level as well:
” By 2011, however, it seems clear that flexicurity does not represent the new historic compromise that some of its initial advocates may have had in mind. Certainly, active labour market policies, such as short-time working schemes, continue to play an important role in some EU member states. At the EU-level, however, EU institutions, unions, and employers, have failed to agree on a common post-crisis strategy (Erne 2011).
Following the lead of the ECB and employers, the Commission and the ECOFIN Council now refer to flexicurity above all to justify calls for a deregulation of labour law and industrial relations practices. It is widely accepted that the European economic and financial crisis has been caused primarily by reckless lending practices that have been tolerated by the ECB, and by the huge bank bailouts that have been approved afterwards by the Commission to protect the banking system against ‘systemic’ capital market risks. But whereas the support for banks and their bondholders, worth hundreds of billions of Euros, is apparently compatible with the internal market – in spite of Article 107 of the Treaty on the Functioning of the European Union that forbids state aid – EU’s economic policymakers increasingly target member states for their allegedly rigid labour laws and industrial relations practices. Unsurprisingly, however, no member state has been criticised for failing to provide Dutch or Danish levels of unemployment benefits to protect workers against labour market risks.
Indeed, workers’ concerns do not figure in the proposed economic governance package that aims at preventing recessions in the future. Instead, the package identifies collective bargaining institutions as obstacles to a speedy recovery.”
And the loss of trust is a major aspect to this in terms of social contract and legitimacy of institutions and policies:
” The difficulty is compounded by the downplaying or, in certain cases, refusal of social dialogue and collective bargaining in the various austerity rounds, thereby shaking the trust, sometimes very fragile, between the very partners that are to bargain and implement flexicurity policies.
Lastly, trade unions across Europe have become more wary of flexicurity in the light of the already relatively high level of labour market flexibility and the cuts currently being inflicted on social protection in Europe.
Revisiting the flexicurity agenda to take account of the lessons of the crisis would imply placing more emphasis on internal adjustment, with a strong focus on incentives to create jobs, on the specific situation of youth, on the need for institutions that ensure secure transitions, while not forgetting the need to regain the trade unions’ trust.”
And Europe is also seeing the return of Taylorism, renamed lean manufacturing (in French) where employees are also asked to participate to their own increased exploitation (draft proposals to increase productivity, get a bonus if they get implemented). And, of course, the workers have to participate in meetings that are not mandatory, but one gets blamed for lack of commitment if one does not show up. And of course, how could one criticize a system in which one participates fully and contributes to. Most of this stuff comes out of management firms that provide templates and training to businesses (anyone having suffered through some of that stuff knows how bogus it is).
And as ergonomists note, lean manufacturing is completely clueless as to human behavior, body (musculo-skeletal damage cause by task reorganization) and mind (demotivation and therefore absenteeism), hence lack of increased productivity, which is how toyotism (the main form of lean manufacturing) tends to fail. But this management style has also been applied to public services in the name of efficiency and accountability (notoriously, at the unemployment centers in France) and more and more service industries have shown an interest.
However, the service sector is where Toyotism fails the most because it dehumanizes and actually prevents workers from doing their job well, for instance, by limiting their interactions with clients to a certain amount of time and to standardized scripts.
And finally, and unsurprisingly, it was only a matter of time before companies exploited the massive prison population of the United States:
“There is one group of American workers so disenfranchised that corporations are able to get away with paying them wages that rival those of third-world sweatshops.These laborers have been legally stripped of their political, economic and social rights and ultimately relegated to second-class citizens.They are banned from unionizing, violently silenced from speaking out and forced to work for little to no wages.This marginalization renders them practically invisible, as they are kept hidden from society with no available recourse to improve their circumstances or change their plight.
They are the 2.3 million American prisoners locked behind bars where we cannot see or hear them.And they are modern-day slaves of the 21st century.
In the eyes of the corporation, inmate labor is a brilliant strategy in the eternal quest to maximize profit.By dipping into the prison labor pool, companies have their pick of workers who are not only cheap but easily controlled.Companies are free to avoid providing benefits like health insurance or sick days, while simultaneously paying little to no wages.They don’t need to worry about unions or demands for vacation time or raises.Inmate workers are full-time and never late or absent because of family problems.
If they refuse to work, they are moved to disciplinary housing and lose canteen privileges along with “good time” credit that reduces their sentences.To top it off, the federal government subsidizes the use of inmate labor by private companies through lucrative tax write-offs.”
And as usual, in the US, companies do not get such lucrative opportunities without government support:
“Prior to the 1970s, private corporations were prohibited from using prison labor as a result of the chain gang and convict leasing scandals.But in 1979, Congress began a process of deregulation to restore private sector involvement in prison industries to its former status, provided certain conditions of the labor market were met.Over the last 30 years, at least 37 states have enacted laws permitting the use of convict labor by private enterprise, with an average pay of $0.93 to $4.73 per day.
Federal prisoners receive more generous wages that range from $0.23 to $1.25 per hour, and are employed by Unicor, a wholly owned government corporation established by Congress in 1934.Its principal customer is the Department of Defense, from which Unicor derives approximately 53 percent of its sales.Some21,836 inmates work in Unicor programs. Subsequently, the nation’s prison industry – prison labor programs producing goods or services sold to other government agencies or to the private sector — now employs more people than any Fortune 500 company (besides General Motors), and generates about $2.4 billion in revenue annually.
Some of the largest and most powerful corporations have a stake in the expansion of the prison labor market, including but not limited to IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Target Stores, and many more.”
Welcome to the Brave New World of work.