Job insecurity: Are you in the precariat?

by Karl du Fresne / 09 May, 2013
A seismic shift is occurring as the precariat, an amorphous but growing group, learns to live without the security of regular employment.
Image/Neil Webb/Getty Images/Listener illustration


It’s the new buzzword in sociology: precariat. Your word-processing program’s spellchecker may not recognise it but it’s the name given to a new social class identified in a recent BBC survey that questioned more than 160,000 Britons on their income, education, leisure interests and social connections.

An abbreviation of “precarious proletariat”, the term was coined by left-wing British economist Guy Standing in his 2011 book The Precariat: The New Dangerous Class. Standing described an emerging class of people living precariously, with no job security, limited education and no stable social networks – a phenomenon he blamed on globalisation and neo-liberal economic reform.

The academics who analysed the findings of the BBC survey used Standing’s newly minted word to label the group at the bottom of the British socio-economic heap. But the precariat is not peculiar to Britain. Economists and sociologists say it exists here, too – although its form is markedly different from that of its Northern Hemisphere counterpart.

In Britain, the term describes a struggling group at the bottom of the pecking order. New Zealand academics suggest the classification is much wider here, and includes people from the well-educated, relatively affluent middle class as well as the traditionally more vulnerable blue-collar demographic group.

The defining characteristic is job insecurity. For many workers, professional as well as low-skilled, “insecure” employment – typically consisting of casual or contract work and often involving unpredictable, irregular or non-standard hours – is the new norm. Unionists and academics agree that a large and growing proportion of the labour force is working outside the traditional framework of a permanent job with an assured, regular income.

Professor Paul Spoonley, research director at Massey University’s College of Humanities and Social Sciences, points to census figures that show two-thirds of jobs are now casual, part-time or contract positions. Full-time employment is in decline; part-time employment is growing.

Those affected are an amorphous and disparate group, ranging from highly paid consultants to cleaners, caregivers and labourers. According to Spoonley, even accountants – whose profession was once considered a model of orderly routine – now commonly work on contract or in fixed-term jobs.

Spoonley doesn’t think the New Zealand precariat is coherent enough to be defined as a new class. Indeed, he tends not to use Standing’s term at all, pointing out that not all workers in “non-standard” forms of employment are in a precarious position.

But he says there has been a huge shift in patterns of work, which he traces back to changes in the labour market that began under Labour in the 1980s. These included individualised employment contracts, a decline in union representation and a move away from the standard working arrangement whereby people worked a five-day week for a salary or wage and had an expectation of continuing service with the same employer.

A CHANGE IN THE MODEL

Several factors have contributed to the trend. A crucial one is the increasing requirement for flexible working hours to meet the demands of an economy that no longer conforms to the old Monday-to-Friday model.

The decline of manufacturing, once a plentiful source of steady jobs, is another. The once-familiar five o’clock factory hooter has been silenced as manufacturing industries, stripped of the state protection they formerly enjoyed, closed down or relocated to lower-wage countries.

“There’s some underlying restructuring of our overall economy – a global phenomenon – going on,” says Susan St John, a University of Auckland associate professor of economics. “A lot of the assumptions we made around the continuity of low-income, manufacturing-type jobs no longer apply.”

Spoonley notes that more than 80% of the workforce is now employed in the service sector. “In the Albany Basin [north of Auckland], half the jobs are in retail and many of them are precarious.” He identifies health as one industry where there is job growth – but it’s one that, like others in the service sector, largely depends on people being prepared to work irregular hours.

Recession and unemployment have reshaped the labour market, too, especially since the onset of the global financial crisis in 2008. St John says some green shoots of growth are now emerging post-recession, “but in the meantime you’ve got redundancies and more casualisation in the lower end of the labour market. Plus you’re getting welfare reform, which is pushing people into the labour market who may not have been there before.”

Peter Conway, secretary of the Council of Trade Unions, points out that high unemployment means people are more likely to accept jobs on the employer’s terms, even if the hours and conditions don’t suit them. “It would be interesting to see what would happen if unemployment was, say, 2%,” he says. (It was 7% in the December 2012 quarter.)

Paul Callister: “I’m a member of the precariat myself. The group I feel sorry for are young people.” Photo/David White.


BACK TO THE PAST?

It all adds up to a sea change in employment patterns – but is it simply a reversion to the historical norm after decades of a tightly regulated economy?

Spoonley suggests the era from the mid-1930s to the 1980s, when the state exercised a high degree of control over the economy and working conditions, can now be seen as a period of “exceptionalism” in terms of job stability and employment protection.

For much of that time, New Zealand’s prosperity was virtually guaranteed by British demand for our meat and butter. But a long period of economic destabilisation followed, triggered by a combination of the 1973 oil crisis and the UK’s entry to the European Common Market. It culminated in the radical programme of deregulation initiated by Roger Douglas in 1984, continued under National in the 1990s and left largely intact under the Helen Clark governments.

Paul Callister, a self-employed economist who specialises in labour market issues, is another who places current trends in a historical context. “My feeling is that we went through a phase in the 60s and 70s when work became very secure, whereas for a long time before that it hadn’t been.”

He characterises that as a period when an expanding public service offered jobs for life, manufacturing companies had thousands of employees on their payrolls and unions were strong. “Looking back, we judge that as a golden era,” Callister says. It’s possible, he adds, that the labour market is now reverting to the conditions that prevailed before then.

Is the emergence of the precariat necessarily a negative trend? “It depends who you are,” Callister replies. “I’m a member of the precariat myself, and it sort of suited me. The group I really feel sorry for are young people, the ones who are working in fast-food outlets and other service industries where the shifts can change almost daily and you remain on the minimum wage for an awfully long time.

“You can’t say it’s either a good or a bad trend, because some people are winners and some are losers.”

WHO’S WHO IN THE PRECARIAT

So, who are the New Zealand precariat, and where are they?

Conway says there’s a high concentration in service industries, such as hospitality, and in construction and forestry. Non-permanent or irregular employment is also common among groups such as air crews, many of whom are employed on a temporary basis. Conway describes it as being “kind of halfway between being employed and unemployed”.

He points out that employer pressure for a more flexible roster system was at the heart of last year’s bitter Ports of Auckland dispute – perhaps the most significant example so far of the thrust toward flexible working arrangements causing industrial friction.

And as an example of the proliferation of contract work, Conway highlights the ill-fated Pike River coal mine. Seven contracting firms were operating in the mine the day it exploded, he says. “It wasn’t as if there was one employer with one chain of command and responsibility.”

State employees are not immune. St John says there has been a marked increase in contract employment in the tertiary education sector, which can leave staff vulnerable when their contracts end.

Callister describes the growing rest-home sector as a fascinating example of how the labour market is evolving. Low-skilled jobs may have disappeared in manufacturing, he says, but the demand for caregivers in rest homes can only increase. In many ways they meet the classic definition of the precariat: low-paid, dependent on shift work and faced with the difficulty of juggling work with childcare, especially at weekends. A high proportion are Pasifika.

Spoonley suggests the labour market has been redefined by the increased uptake of tertiary education.

“A lot of the people affected [by non-standard working arrangements] are middle class and tertiary educated. I see people coming to university who 20 years ago would never have.

“The pool for some jobs has contracted – people in skilled trades grumble that the people they would have previously got as apprentices are now going to university.”
Official statistics provide only a blurry picture of the issue. Callister says not enough is known about the New Zealand labour market; “our traditional measures are getting a bit out of date”.

Professor Paul Spoonley: “The number of people working in precarious job situations has gone up.” Photo/David White


According to Spoonley, policymakers have been slow to grasp what’s happening. When researchers began highlighting the rise of insecure work, he says, the Department of Labour (now part of the Ministry of Business, Innovation and Employment) didn’t want to know. “Their legislation and policy framework was built around a core standard workforce. Non-standard workers were difficult for them.

“Similarly, our politicians still tend to think about their own experiences, and I don’t think that’s any basis for looking at the future. There’s a generational culture gap. Younger people understand the new reality better than their parents.”

Conway agrees that little research has been done. Statistics show that 110,000 people are “underemployed” – in other words, they want to work more hours – but the figures don’t specifically measure job insecurity.

The phenomenon has been more thoroughly studied across the Tasman, where the issue has taken on a political dimension. In a report published last year entitled “Lives on Hold”, the Australian Council of Trade Unions defined insecure work as “poor quality work that provides workers with little economic security and little control over their working lives”.

According to the ACTU report, the characteristics of these jobs included unpredictable and fluctuating pay, inferior rights and entitlements, limited or no access to paid leave, irregular and unpredictable working hours, uncertainty over the duration of the job and a lack of any say over wages, conditions and work organisation.

“These challenges are most often associated with non-permanent forms of employment like casual work, fixed-term contracts, independent contracting and labour hire – all of which are growing,” the report said.

While acknowledging it is difficult to precisely quantify the extent of insecure work, the report cited official figures that showed almost a quarter of all employees in Australia were engaged in casual employment, and that the proportion had grown significantly since the 1980s.

POWER PLAYS

ACTU president Ged Kearney has described the rise of insecure work in Australia as the result of a business model that shifted the risks from the employer to the employee.

Conway agrees that the burden of such arrangements often falls on the worker, as in the case of owner-drivers providing their own vehicles and carpenters having to supply their own tools.

Some companies use the “just in time” model, whereby workers are called in as and when needed. “We’re not necessarily saying that’s bad in every case,” Conway says, “but we’re concerned that this business model is being used even where there is continuity of work, [and] the employer is putting the burden of any insecurity onto the worker instead of trying to manage it.”

The crucial issue, according to Conway, is the power relationship between employer and worker. “We’re not saying that all flexibility is bad – sometimes it might suit the worker, too.” But he says working arrangements should be a matter of mutual agreement.

There lies another issue. Conway says it’s probable that a high proportion of people doing non-standard work are not unionised and therefore lack a collective voice. “Unions need to adapt to meet the needs of this workforce. That’s why we have developed within the CTU a new organisation called Together, for people who don’t fit the traditional model and have no union right now.”

SALARY STICKS

Not everyone accepts that the “precariat” exists – or if it does, that it’s such a problematical issue. Business New Zealand chief executive Phil O’Reilly, for example, dismisses the idea that all people in casual employment or on fixed-term contracts are “precarious”.

“It’s a part of left-wing and trade-union mythology around the world that somehow if you’re not in a job that’s Monday to Friday, full-time, nine to five, with overtime on weekends and all that stuff, then somehow it’s precarious,” says O’Reilly.

“I’m not saying that all people in part-time or casual or fixed-term contracts are not in precarious employment, because some of them are. But the idea that they all are is just ridiculous.”

To some extent, Spoonley concurs. “I think there’s good and bad,” he says. “When we look at contract workers, Guy Standing tends to assume that these jobs are poorly paid and precarious, and that’s not the case. People doing contracting work in the private sector have a high degree of discretion over what they do and how they do it,” he says. “They are also well paid.

“We have seen the growth of firms that fill the gap between what the state used to do and what’s demanded in terms of the private sector, and they’ve done very well. So we need to be careful about labelling everything as inevitably a downward spiral.

“That said,” Spoonley adds, “there is a ratio between what people get paid and what it costs to live, and that gap has been gradually worsening in the past two or three decades. So there are concerns that a big chunk of New Zealanders are struggling to meet normal outgoings.

“Levels of inequality have gone up and the number of people working in precarious job situations has gone up. But there are some who have benefited as well.”

O’Reilly points out that the traditional model hasn’t been overturned for everyone. “Salaried office workers still work to much the same pattern as before.” But he accepts that some people may no longer have a choice between full-time or casual employment.

Susan St John detects a structural economic shift. Photo/NZH


Those changes haven’t necessarily been driven by business, he says. “The world of work has changed quite a bit. Not all of that change was at the behest of the employers. Some of it was driven by customers – for example, we expect shops to be open and goods and services such as transport systems, infrastructure systems and so on to be available 24/7.” Many businesses, he says, no longer have the luxury of deciding not to open on a Sunday.

Globalisation has had an impact, too. “New Zealand companies are competing around the globe, often against players who have lower cost structures.”

O’Reilly confirms that low-skilled manufacturing jobs are either gone or going, although low-skilled work – for example, cleaning – still exists in the service sector.

“What we hope, of course, is that those low-skilled jobs will be replaced by higher-skilled manufacturing and services jobs, and broadly speaking that’s what’s happening.”

He says flexible work arrangements suit many people, but there are others – those with low skills and few choices – who need help “to get off that treadmill of casual, short-term stuff”.

So precariousness can be an issue at the lower end of the labour market? “Absolutely,” he says. “It’s a much smaller subset than you see in the left-wing mythology, but it’s there and it’s a really worrying thing. It’s concentrated among the low-skilled and therefore, by implication, Maori and Pacific Islanders.

“The guys you’ve really got to worry about are the ones who are circling around that lower end of the workforce, moving in and out of work, getting stuck in that welfare-work continuum, and who are really battling.”

The welfare state has a role to play in ensuring such people are protected, O’Reilly says – “that they’ve got a decent house and their kids go to school and that they’re clean and dry and warm and well looked after and fed. But if you want to break that cycle, we’ve got to give them some skills that many of them don’t have – basic literacy and numeracy, customer service, basic IT skills.

“I’ve argued with successive governments for quite a while now that what we need to do with those people is take an investment approach, particularly with the youngsters. We need to invest quite heavily in them now, because then for the next 30-40 years they’ll become taxpayers. If we don’t do that, they’ll be welfare recipients for 30-40 years.”

PERMANENT RECORD

Whatever one’s opinion of the precariat – to what extent it exists and whether the implications are good, bad or neutral – there seems to be unanimity on one point: the labour market has changed irrevocably.

Spoonley says the move toward non-standard work is not a temporary aberration, but a fundamental shift that is likely to be long term. “I think the global financial crisis has accelerated it.

“Bank economists kept predicting that the labour market would improve and it didn’t. I’ll be interested to see whether some aspects of the global financial crisis actually become permanent, such as school-leaver and graduate unemployment, which has doubled since 2008.”

St John also detects a structural economic shift. Her main concern is that the benefit system should be overhauled to make it kinder to people who move in and out of work, who she says are severely penalised under the present regime.

Even Conway, the union man, seems to accept that labour market changes are irreversible. What has to be pursued now, he says, is a new model that provides flexibility – by mutual agreement – along with security of employment. “I think it’s fair to say that the Monday-to-Friday, 40-hour standard week for everybody … it’s going to be very hard to argue convincingly that we can turn the clock back to that.”

GENERATION JOBLESS


OECD figures suggest that 26 million 15- to 24-year-olds in developed countries are not in employment, education or training; the number of young people without a job has risen 30% since 2007. – the Economist.

According to research being done by Stuart Whitaker, senior lecturer in occupational health at the University of Cumbria, being in an insecure job has a more damaging impact on people’s health than actually losing employment – particularly for men. – the Guardian.

All in all, nearly half the world’s young people are either outside the formal economy or contributing less productively than they could. – the Economist.

Mini jobs are a form of part-time employment that allows workers to earn up to €400 ($625) per month without having to pay taxes or social security. By the end of September 2010, more than 7.3 million people in Germany were employed that way. – German broadcaster Deutsche Welle.

Many of the “employed” young have only informal and intermittent jobs. In rich countries, more than a third, on average, are on temporary contracts which make it hard to gain skills. – the Economist.

Image/Neil Webb/Getty images/Listener illustration

CHANGING TIMES


A tectonic shift to society is under way and this shift is going to be so significant it is going to change the way that we live our lives, the way we do business.
– the Sydney Morning Herald.

The International Labour Organisation reports that 75 million young people globally are looking for a job. – the Economist.

Australians are dropping out of the workforce at unprecedented rates. Since the end of 2010, Bureau of Statistics figures show two-thirds of the growth in the adult population has been among [the 22,000] people who are neither employed nor unemployed, just sitting on the sidelines. – Fairfax Australia.

The number of young people out of work in the OECD is almost a third higher than in 2007. – the Economist.

The version of twentysomething womanhood being reflected back at us in 2012 isn’t dressed in Louboutins, busy ball-breaking in boardrooms: she’s eating cereal, in her pants, in her parents’ basement … One [US] survey suggested up to 85% of new graduates in 2011 were likely to move back in with their parents. In the UK, where youth unemployment is at an unprecedented one million, it’s estimated at 27%.” – the Guardian.

Japan’s youth joblessness, which surged after its financial crisis in the early 1990s, has stayed high despite a fast fall in the overall workforce. A large class of hikikomori live with their parents, rarely leaving home and withdrawn from the workforce. – the Economist.
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