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The Future of Work and Globalization of Insecurity

"A certain protection from the disastrous effects of incalculable competitive markets, particularly of the `satanic powers' of the labor market was achieved by safeguarding public goods.. Informalization is a side-effect of structural adjustment programs and deregulation. Informalization must be understood as an expression of structural changes in the relation of global, national and local economies under the demands of competitiveness." Translated from the German
The Future of Work and Globalization of Insecurity

By Birgit Mahnkopf

[This article first presented at Porto Alegre, February 2002, by the Goethe Institute is translated from the German on the World Wide Web,  http://www.goethe.de/br/poa/wsf/mahnde.htm.]

Work and socioeconomic security as a unity is one of the great inheritances of modern industrial society. This unity was the foundation of the democratization and civilizing of society in European social- and welfare states and in post-fascist Germany. This led to a decrease of the powerlessness of dependent workers, not to a substantial reduction of social inequality. People who had no property themselves also enjoyed social and economic security in capitalist societies with the principle only property creates security. Dependent employees could put the experience of existential insecurity behind them even in situations of unpaid work. Guarantees, social rights and a social status gained through work - of their own hands or heads - provided for stability and long-term planning. While past paid laborers "camped at the edge of society" without finding a place in society, in a formulation of Auguste Comte in the transition to the 19th century, the status of (male) paid labor had social recognition and respectability during the second half of the 20th century. The vulnerability of people was reduced amid external crises and shocks whose parameters are hardly influenced by the "little people".

I.

The future appeared both individually and collectively possible in the "golden years of capitalism" that lasted up to the middle of the 70s. The legitimate hope persisted that paid work would become "more humane in the long run", real wages and household incomes would rise, working hours would be reduced and vacations extended. A certain protection from the disastrous effects of incalculable competitive markets, particularly of the "satanic powers" of the labor market (K. Polanyi) was achieved by safeguarding public goods. Because political institutions intervene in the free play of market forces and public goods like health and education, food security and housing, legal security and vital resources were available. Those with only their labor power as their property could be sure of a better and not worse future. They built houses for themselves and their children with credits to be repaid. They gained marketable qualification and could responsibly organize a long-term (professional) career on that basis.

The foundation of all this was a whole set of socioeconomic securities established normatively and supported by formal institutions guaranteeing a specific normality of work. These included: 1. Labor market security - adequate job possibilities on the formal labor market; 2. Job security - through termination protection; 3. Qualification security - through a training and education system encouraging acqusition and retention of tranferable abilities and knowledge; 4. Work place security - in concrete activity guaranteed by the vocational training; 5. Security in work - through labor and accident protection; 6. Income security - through minimum wage regulations, wage indexing, a comprehensive system of social security in cases of sickness, old age, unemployment, invalidity and progressive taxation of income and finally 7. Security of representation - the guaranteeing of collective representation of interests through independent unions and employer associations, wage autonomy, right to strike etc. Secured rights and possibilities existed for contesting oppressive, exploitative or degrading conditions in work, for exercising self-control by means of mechanisms and procedures for collective representation of interests by unions and company representatives of employees.

The coincidence of intense economic growth and extension of welfare state structures in the course of the European post-war development repressed the question about the mutual dependence of economic expansion and socioeconomic security. For a long time, it was unnoticed that the connection of economic growth and socioeconomic security was only a "loose coupling". The successive legal growth appeared as a stable historical succession from civil to political and social rights. After the upheavals of the 70s and then intensely after the collapse of command socialism in 1989, the connection of economic growth and extension of socioeconomic security was clearly not an "intrinsic" and synergetic relation. Socioeconomic security is by no means a necessary side-effect or even prerequisite of economic growth. Today socioeconomic security is seen as an obstacle. Since global positional competition has pushed back the system competition of capitalism and socialism, social rights and securities are also debated in the rich industrial countries since political interests in social justice can only be enforced against the stream of capital accumulation.

The fordist times should not be transfigured. A certain measure of normality, stability and "human security" existed as far as possible in capitalist societies with social security, keynesian full employment policy, fixed rates of exchange and political regulation of social and economic relations. This was particularly true compared to the "post-fordist" times which didn't know the formation of long-term perspectives, recourse to a social normality and secured forms of work, money and policy. Persons insisting on guaranteed norms and forms were scorned.

II.

The formal and institutional regulation of work, wages and money was in no way obvious either in the history of "rich" capitalist western countries today or in the other world regions at the beginning of the 21st century. Informality and weak institutional bonds are widespread worldwide. The term "informal" assumes social norms defining "normality", for example a "normal work relation". Then all other working conditions can be measured by this "normality" and classified as deviations or "a-typical work" on account of their difference from the "norm" - as happened in the past with working conditions mostly accepted by women. Ideas of social normality are reflected in concrete forms of work. When these condense to formal institutions - to systems of industrial relations, wage contracts, parties to wage agreements, company rules or social laws -, uncertainties of individual and collective orientations are reduced and a certain reliability in the conduct of social actors established. Thus "formality" always presupposes "informality" as a counter-point. Everything beyond socially defined forms is informal... Problems of measuring informality persist... The same activities can often be performed by independent or dependent persons with or without payment and with or without social protection. Thus formality and informality are extremes on a continuum where informality passes into illegality and criminality at its extreme end.

Socioeconomic security diminishes where formal institutions are non-existent, deregulated, dismantled or destroyed and where conditions of informality spread. The vulnerability of people grows through external shocks. This is true today in vast parts of the world. The political deregulation of markets, the liberalization of economic relations and the privatization of public property cause regulated working conditions to become rare. Many people can no longer afford health- and education services after far-reaching privatization and feel transposed into insecurity through private security services. When norms become "soft" and forms dissolve in the informal, human security - in the sense of the UNDP - is put in question. Socioeconomic security in the comprehensive sense of "decent work"/ "dignified work" as recently defined by the ILO became the privilege of a social minority in most countries of the world at the beginning of the 21st century. While paid work and security are raised to a norm in the social-industrial modern age, this has become an exception or special case in the lands of the South and the transformation countries and is also threatened in the developed industrial countries of the West.

The "informal sector" in the lands of the South is described in contexts of development theory. These contexts are seldom connected to the "crisis of normal working conditions" in western industrial countries. Despite all the continuing economic, social and cultural differences in particular regions of the world, a dynamic of global transformation processes occurs. Structural similariities are clear between the "single-person firms" of the "informal sector" in countries of the southern hemisphere, the coffee seller in the transformation countries, the dependent employees in the "sweat shops" of the globally integrated clothing and shoe industry and precarious employment conditions and new forms of "independent work" in western industrial lands. These are all working conditions without social and economic security. The street vendor in Mexico City who works "on her own account" and feeds a whole family with her meager income, the young Chinese migrant in a "sweat shop" in Neapal who sews jeans for a large retailer and dreams of a future as a salesman and the single-parent salesperson in a Wal-Mart branch in Minneapolis, Minnesota have several things in common. They are all confronted with that basic experience of existential uncertainty characteristic for "pre-fordian" times of capitalism. Fear of the future, fear of the "social crash" and experience of physical and mental stress leading to sickness and often accompanied by degradation, debasement and poverty in paid work are all included in that basic experience. With easy-to-remember examples, Barbara Ehrenreich describes this experience in her book "Working Poor. Underway in the Service Society".

III.

For some actors, globalization of the world economy has opened up new chances and expanded elective freedoms. Nevertheless the liberalization of world trade and the globalization of competition has increased vulnerability for many states, national economies and population groups. In the countries of the South, the transformation countries and rich industrial lands of the North and West, the endemic changeableness of all rules and guidelines that previously defined cooperative human life in the borders of nation-states characterizes the living conditions of many people...

Different from the beginning of the 70s when the informal sector in Africa was "discovered" by the ILO, this stage is not a transitional stage in the modernization process or a temporary phenomenon integrated with increasing industrialization in the "modern sector" of the economy. Informalization of work - and money-relations - and as a consequence informalization of politics - is not an answer to bureaucratization, excessive tax burden and deficient institutionalized ownership rights as though de-bureaucratization, lower taxes, property protection and privatization of public property could put things right. Rather informalization is a side-effect of structural adjustment programs and deregulation. Informalization must be understood as an expression of structural changes in the relation of global, national and local economies under the demands of global competitiveness.

In the real economy, there isn't only success on the market, that is accumulation in global competition and on the other side the failure and disappearance of less competitive actors as in the binary logic of economic theory. The dynamic of free trade that ensures higher productivity realized through intensive division of labor and intensified specialization reflected in more, better and cheaper goods for consumers in reduction of work per production unit leads to the release of workers. Unemployment is one consequence when the people reduced to the "redundant population" in the global standard or in an enclosed society are not channeled back in an economic cycle through compensating growth according to David Ricardo. Another consequence more widespread in societies without unemployment insurance is the informalization of work, money and politics. Those areas of the economy and employment expand where the man-made constraints of the world market are avoided and not fulfilled and socialization by work and money occurs entirely or partly outside the formal structures.

Informalization on one hand is the result of a conflict of norms. Sex-specific relations come under pressure where global-, trans- or supra-national standards and norms are intensive. The "normal forms" in the enclosed society are broken, corrected or avoided where the global productivity standards are formed on the world market, where the criteria for awarding credits are fixed by international institutions (by the IMF or the World Bank), where the supra-national Maastricht criteria or the aquis communitaire imposed by the European Union on its entrance candidates cannot be fulfilled.

On the other hand, the informal sector also fulfills the function of a kind of sponge for all the workers who have become "superfluous" in the aftermath of global positional competition. Their capacity for flexible adjustment and consequences for socioeconomic insecurity should be emphasized. The informal sector represents a shock absorber of globalization since it assures the subsistence of households. In this function, it makes an important contribution to the "feminization of survival security" like border-crossing migration. Secondly, the informal sector contributes to an actual solution of the labor market crisis. The informal sector has a great employment effect despite considerable discriminations by the state. Market access is relatively easy, capital investment low, applied technology simple and work intensity high while profits and wages are low. Thirdly, the high employment effect of the informal sector reflects the fact that small (local) enterprises would not be competitive with observance of social and ecological standards and must actually disappear from the market. Their deficient competitiveness is compensated by the over-exploitation of workers whether in wages or protective measures. The same mechanism forcing the contempt of norms and standards in small- and one-person enterprises is a means of increasing competitiveness for mammoth transnational corporations (TNCs) where micro-enterprises and the "self-employed" of the informal sector are closely integrated in the global production- and supply chains. Fourthly, the informal sector represents an almost inexhaustible reservoir of cheap workers for the 63,000 TNCs with their 800,000 worldwide foreign branches employing more than 125 million people.

This last function of the informal sector, the increase of TNC competitiveness, has grown since the beginning of the 90s in the consumer-driven global chains of the production- and marketing of consumer goods industries. In the global business networks, large retailers, wholesale traders and brand-name manufacturers with their headquarters in the capitalist centers organize and coordinate the border-crossing value creation. The physical production of goods and services is separated from the stages of research, development, designing, financing, sales and marketing. All manufacturing is shifted to neighboring developing- and threshold countries by processes of "outsourcing" and "subcontracting". For the TNC, the better grasp on sub-contractors employing a myriad of informal workers and many home workers makes possible reduced costs and increased flexibility since many risks can be shifted on the dependent suppliers. At the same time "subcontracting" is a suitable means for getting rid of legal obligations and the responsibility of workers who are legally independent but economically dependent on the TNC. The result is that the violation of "core work norms" and national labor law and social legislation can be blamed on under-developed legal understanding and deficient supervisory structures in so-called "low-wage countries".

The positive effects of the informal sector, binding workers (including many women) and creating income where the formal economy shrivels can only be realized at the price of higher and growing socioeconomic insecurity. This is also true for the labor-intensive personal services in western industrial countries - in retail trade, the public health system or home businesses - that cannot be transferred to low-wage countries. Their expansion goes along with a growth in insecurity for employees.

Everywhere in the world, informal work is a synonym for less developed rights, less transparency of business practices and unsettled property relations. Illegal behavior including bribery of office-bearers often occurs. In addition, uncertainty of social status forces a strong clientelism, the immediate security through personal networks. Woe to those with poor chances in mobilizing personal support networks. Long-term decisions and investment in durable goods are frequently postponed because of great uncertainty about future developments. Access to the credit market is usually difficult because the credit certificates required by banks are lacking. The security of food, health, and housing is put in question and also the chances of children for gaining access to education and the hope of seniors to a dignified retirement.

"Human security" becomes a temporary experience through the alternation between employment and unemployment, over-work and under-employment and forced spatial mobility and precarious residence. This "culture of chance" has many similarities with the culture of pauperism in the 19th century.

The gray zones at the edges of the informal sector become clear in focusing on "endemic insecurity" (Z. Baumann). On one side, there are flowing transitions from informal to precarious work in the formal economy, to exchangeable "just-in-time employees", for routine tasks to the new (pseudo-) independents and "freelancers", the highly specialized co-workers on call populating the "new economy". However employment security is often only granted even within the stable core of the formal economy through concessions regarding spatial mobility, temporal flexibility and increased output. Thus employment security goes along with a growing deficit in job- and income security.

Under the perspective of socioeconomic security, the transitions are obvious in the criminal economy to forced labor, to extreme child labor, forced prostitution and modern forms of wage slavery that spread with the international migration in the last years. As in the early phases of capitalism, economic power is also used today to wound people, to prevent their use of civil and social rights, to manipulate, deceive and extort and move them to actions through coercion that they would not carry out of their own free will. Working conditions that violate human dignity are not limited to an historically overcome phase of capitalism or an accidental side-effect of capitalism. They can spread as established institutions protecting social human rights in work erode under the pressure of global transformation processes. This is happening all over the world.

Kevin Bales emphasized this distress in his study on "The New Slavery". The deficits are especially great considering all the facets of socioeconomic security where de-standardization and de-institutionalization in the course of the privatization of public enterprises and retreat of the state from the allocation of public goods advances so far that "human security" in the sense of the absence of direct physical violence is not even guaranteed. The "most vulnerable people", the children, women, sick and old people everywhere in the world, are exposed to extreme dangers to body and life. The "position-conditioned poverty" is significant for the civility of human societies and for the minimal chances for realizing a "just peace", not only the absolute magnitude of the deterioration of living- and working conditions. P. Bourdieu described the ascents and descents in relation to the situation of others with whom one compares oneself or from which one distances oneself. Under the conditions of economic and media globalization, both need not be referred unconditionally to the reference system of the nation state.

IV.

Living democracies depend on people who can act as a matter of course. This is only possible when they need not fear about daily survival. The command of justice requires an adjustment of advantages resulting from circumstances for which individual persons are not responsible. The command of justice also requires that freedom rights be superimposed on a base of securities so individuals can act and decide in a self-controlled and socially responsible way. Therefore all people should be provided with security as a "basic good" enabling them to follow a rational life plan. Security in this sense is one of the "capabilities" underscored by Amartya Sen.

Nevertheless an overwhelming majority of people in all regions of the world are exposed to threats and insecurities in their working life and beyond that hold them captive - for the sake of their own survival - in the daily struggle of all against all at the beginning of the 21st century. Socioeconomic securities are defamed as anti-growth rigidities under the influence of neo-liberal thinking. Insecurity is raised to the rank of a political goal. A "just peace" under the conditions of globalization requires rejecting the basic neo-liberal assumption that insecurity and substantial inequality are necessary for economic growth, inevitable if not desirable necessities. Behind this assumption is a neo-Darwinian anthropology where people are endangered by security in being made "dependent".

However mutual dependencies in modern societies are recognized and opened up to institutionalization in the idea of social democracy supplementing civil and political rights with social rights. Today the privileged attempt to steal away from obligations arising from the idea of social civil rights. They distance themselves by telling the "others" that they are not really "dependent" and could liberate themselves from the traps of their existence by self-help. A growing class of people in the rich societies of the North and West depend on classical solidarities, protective mechanisms and governmental equalization, on an active state that forces transfer from top to bottom, on hard norms and on active institutions that represent the interests of the weak and collectively organized insurance systems offering reliable protection .

Whoever wants to attack the spread of socioeconomic insecurity (in formal jobs, in the shadow-land of the informal economy or in the state of unemployment) for the sake of a "just peace" cannot simultaneously set assuring local competitiveness in the global positional competition above all other political goals. A correction of primary distribution by state redistribution policy is indispensable given the harsh distribution conflicts. This assumes that the state can regain its taxation power and that mobile production factors will pay higher taxes. The socioeconomic security of citizens in the future can only be guaranteed through a tax-financed basic security and expanded participation in all areas of life. The bond of income and paid work must be dissolved. For this reason, members of the global "club society" of owners of financial assets must be far more involved than before in financing public goods.

Chances for social justice depend on provision of these goods - whether education or health care, financial stability or an intact environment. Freedom rights mean more than absence of distress and (state) pressure. Freedom rights include leading a life according to one's decisions and for solidarity as organized risk equalization between strong and weak, healthy and sick, powerful and vulnerable actors.

The current development is different. A de-institutionalization of rules and norms of (labor-) market restriction amount to a return of the "political economy of insecurity". More and more people are robbed of the prerequisite of following a self-controlled, rational life plan. Under the sign of "flexibility", they are robbed of an essential freedom to act and decide in personal responsibility. This freedom cannot exist without socioeconomic security in the comprehensive sense.

Some basic securities should be granted precedence before others. Labor-market and employment security are not granted to all people to the same extent and under fair conditions in a globalized economy. Often these can only be gained at the expense of other more valuable forms of security. Employment can be expanded by lowering wages, reducing social protection, accepting a health-endangering condensation and/or expansion of working hours along with the enlargement of social inequality as inevitable side-effects of employment expansion. For many people, income security cannot be realized through any employment. Therefore promoting "any work" is wrong. Many working conditions destroy intellectual abilities and flexibility for self-control and productive and reproductive alternatives.

Political initiatives should guarantee income security, vocational security and representative security for all people. Vocational security is an indispensable and central element of socioeconomic security. This is true for people with high formal qualifications and people with lower qualifications. This kind of security is the privilege of a minority today. Therefore targeted promotion of vocational activities is necessary, not paid work in itself. Experiencing vocational security is not possible where income security security is lacking. These are two indispensable elements of human security. The right to collective representation of interests is essential for protecting vocational standards and security of income. The security of being able to improve abilities gained in a working life biography through "lifelong learning" - instead of having to forget this again and again - and improving competence, social status and individual conduct, that is "occupational security", in a working life are basic securities that guarantee "decent work" for formally and informally employed persons.

Several additional characteristics of political intervention can be named with regard to informal work in the narrow sense. Firstly, better data about the extent and dynamic of the informal sector would be an important contribution in formalizing informality. A definition would also be helpful to illumine the "gray zones" between formality and informality and between informality and illegality or criminality. Illegal and criminal informality can only be combated when facts and circumstances are clearly identified. Legal norms are important and useful but the "slide" between informality and illegality must be recognized.

Secondly, sufficient public goods from health services to the education system are important. Informality is very often a response to the shortage of public goods that has intensified all over the world through the privatization programs of the past two decades. Thirdly the informal sector must be enlarged since informality cannot be entirely changed into formality: from expansion of social security systems (inclusion of the "informal" in state- or self-organized systems of medical- and old age insurance) and social services (education- and child care possibilities, legal aid etc) to provision with micro-credits and specific measures of "capacity building" (strengthening and coordinating base activities, promoting cooperatives and educational measures and regulating representation rights toward local, national and international institutions). These must be styled especially for women since the majority of informal workers are women. Fourthly, the informal sector is very heterogeneous. Specific measures should be taken to protect home workers (ratification of ILO conventions 177 and 184, only ratified by Finland and Ireland for a long time) and "contract workers", workers who are subcontractors or suppliers of TNCs. International union secretariats, national agencies of unions and employee representatives of large corporations from industrial countries could play an important role by bringing their resources (information, money and personnel) into the existing international networks of "informal workers" and/or supporting base activities in the countries of the South and East in cooperation with local and international NGOs. The unions could do much for organizing informal work by recognizing international networks as discussion- and negotiation partners. Fifthly, core ILO work norms should gain acceptance everywhere in the world. Labor- and social standards must be understood as central elements in the struggle for human rights of the 2nd and 3rd generations. Modern forms of forced labor and slave labor must be resisted.

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