by R Bamidele · Cited by 2 — There is a fine line between the for-profit day labour intermediaries and the casual work agencies operating in the construction industry, although they are
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1 Rasak, B . & Babatunde, M.O. (2017). Casual Employment and the Globalized Market: A case of Selected Countries. Uyo Journal of Sustainable Development . Vol. 2 (1):18 – 34. Clement Isong Centre for Development Studies. Faculty of Social Sciences, University of Uyo – Nigeria CAS UAL EMPLOYMENT AND THE GLOBALIZED MARKET – A CASE OF SOME SELECTED COUNTRIES RASAK Bamidele Ph.D Department of Sociology College of Business and Social Sciences Landmark University, Omu – Aran, Kwara State E – mail: delerasak@yahoo.co.uk, delerasak@gmail.com +2348034955615, +234 7052087979 BA BATUNDE Michael O. Department of Management and Accounting Faculty of Management Sciences Ladoke Akintola University of Technology , Ogbomosho , Oyo State E – mail: mailoyewale@gmail.com 08160419880, 08075635394 Abstract One of the key features of industrial restructuring in the current globalized market is the increasing polarization in employment conditions and a growing differentiation in the workforce. One method employed by firms in their attempt to stay competitive t hrough increased flexibility – time workers, seasonal workers, home workers and subcontracted workers. Globalization is often equated with growing integration of national eco nomies. In the sphere of economics, globalization is reflected in the increasing acceptance of free markets and private enterprise as the principal mechanism of promoting economic activities. Labour restructuring can take different forms in different count ries. One prominent aspect in the last two decades has been a process of casual employment, in the sense of an increase in the proportion of employees This study therefore examines casual employment and its effect in the globalized market, with particular reference to some selected countries. This study was guided by neo – liberal theory. Key words: Casual employment, Globalized market, Casual labour, Flexibility, C asual workers Introduction Casual employment grew significantly over the last decade, accounting for 10 percent of net employment growth in the United States during the 1990s (Wandera, 2011). Evidences from case studies and business surveys suggest dramatic growth in the outsourcing of functions to contra ct companies as well (Houseman, 2001). Elements such as the technologies used in the productive process, the specialization of the workforce and niches of development are just examples of the diversity of aspects that have been in constant change so far. C asual employment is part of the phenomenon of short – time employment, often seen as a consequence of a major push by governments and employers in industrialized countries to develop more flexible labour markets and to reduce labour costs (Golden and Appelb a um, 1992 ). brought to you by COREView metadata, citation and similar papers at core.ac.ukprovided by Landmark University Repository
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2 Problems The era of globalisation has given rise to profound changes in the way labour is utilised, specifically in terms of employment patterns as well as the related issues of earnings, job security, unionization and so on. In effect, the way the worker is used by the firms in the industry is determined solely by the dictates of capitalism, that is, the profit motive. Thus, neo – liberal globalisation, contrary to the often – benevolent impacts attributed to it, has brought about structural cha nges in the economy and alters consumer preferences, lifestyles and demands of citizens, as well as changes in the working pattern of workers . relationship implies the existenc understand the concept of casual employment relations, it will be more appropriate to understand the concept of permanent employment relationship. The permanent employment relationship is full – time, cont under the employer’s supervision. The central aspects of this relationship include an employment contract of indefinite duration and standardized working hours/weeks, with sufficient social benefits. Benefits like pensions, unemployment, and extensive medical coverage protect the permanent employee from unacceptable practices and working conditions. Casual employment relationship, sometimes called precarious work, on the other hand, i s used to describe jobs that are poorly paid, insecure, unprotected, and cannot support a household. Kalleberg (2000) note that, as casual jobs pay poorly, lack health insurance and pension benefits, are of uncertain duration, and lack the protection that trade unions and labour laws afford, they are problematic for workers. In recent decades, there has been a dramatic increase in casual jobs owing to such factors as: massive unemployment, globalization, the shift from the manu facturing sector to the servic e sector and the spread of information technology. As more technology is introduced into the workplace, the unskilled workers become more disadvantaged and vulnerable (Campbell and Brosnan 1999). However, technological impact cannot totally or adequately explain the existence of this situation, especially in less developed countries, where the level of technological development and adoption is low relative to the more developed world. Based on this assertion, this paper is, therefore, directed towards impr oving existing knowledge about casual employment and its effects in the globalized market with particular reference to some select ed countries.
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3 Brief review of literature Casual employment in Australia – growing form of employment, with Australia now having the second largest casual workforce in the world, after Spain. This has triggered considerable debate as to whether government intervention should be used to improve job security for the growing number of casual worker s (Munn, 2004). The number of casual employees has increased steadily over the p ast 15 years, from 18.9% of all wage and salary earners in 2008 to 27.6% in 2011. Recent years have seen a slowing in the growth of casual employment. Between 1993 and 1998, t he number of casual positions increased by 35.6%. However in 2003, the number of casual positions has only increased by 15.1 % (Munn, 2004). In 1998, 69.9% of the net jobs created were casual positions; whereas over the last 5 years, only 33.8% of net job s created have been casual positions. This is a significant slow in the rate of growth of casual positions (Munn, 2004). Most casual workers are part – time, with casual workers currently representing 13.8% of all full – time employees and 60.4% of all part – ti me employees. Significant percentages (35.0%) of casual employees are aged between 15 and 24. This is to be expected as this age group is typically studying and not looking for a long – term commitment in the labour market (Munn, 2004). Casual employment in Canada Casual employment affects many workers in Canada. For example, a 1998 study on wages and working conditions in child care centres across Canada showed that almost one – third of the staff worked under some kind of casual labour. This was true even though 91 percent of teaching staff worked over 30 hours each week. One – fifth of these workers took on an extra job. Eight percent do so because they need a larger income to live. Most do not receive benefits. On average, child care teac hers and assistant teachers work 4.6 hours of unpaid overtime each week. Nationally, the turnover rate among child care workers was 22 percent in 1988. Ninety – eight percent were women (Shalla, 2003). In New Brunswick, casual workers are not allowed to join a union. Many public sector workers, including hospital workers, jail guards, school personnel, work without employee status, contract rights or the right to unionize (Jurriaan, 2003). . In Canada, three different definitions of casual employment have b een used, each pivoting on permanency. These definitions include only people employed on a temporary basis. The first definition includes all wage and salary workers who do not expect their job to last. The
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4 second definition narrows the focus to employment of very limited duration by including only those wage and salary workers who expect to work in their current job for one year or less and who have worked for their current employer for less than one year. The third definition broadens the second by includ ing self – employed workers who expect to be, or have been, in their current employment situation for one year or less (Krahn, 1995). More frightening, however, is the fact that the decline in the average weekly hours for workers is more likely a reflection of the increasing number of workers employed part – time for – time employment is not a result of personal preference, temporary illness, holiday work, and so on.). The current number of workers employed pa rt – time for economic reasons is hovering around 9 million the highest since the BLS first started recording this data in 1955 (Farr, 2009). Casual employment occurs whenever workers are employed in a casual, temporary, or otherwise non – permanent and non – f ull – time capacity in Canada. In recent years, casual employment has become an increasingly visible problem, and those workers affected are often subject to lower pay, barred from their right to join a union, and denied medical and other benefits. Companies will often hire several part – time workers to avoid their obligation to provide benefits, to divide the work force and to dissuade unionizing efforts. These trends are present in Canada labour market. Another form of casual employment is the growing of con tracted and subcontracted workers (Farr, 2009). Casual employment in the construction industry in the United States An essential feature of the U.S. construction industry is the operation by unions of hiring halls, a job – referral system through which union members are matched with job vacancies at union contractors in the order of their registration date. Open – shop asso ciations have no tradition of hiring halls, but instead operate referral systems through which lay off workers are allocated to contractors in need of personnel. However, these referral systems are not widely in place. Therefore, much recruitment remains informal and depends on networks of contractors and workers. Workers are recruited through newspaper advertisements, the public employment services, casual work ag encies and vocational schools. Because non – union contractors depend on this patchy system for new skilled workers they have a significant incentive to retain regular employees. The need of non – union contractors to secure a pool of skilled workers co – exists with the self claimed flexibility these firms are compared to union contractors (Northrup, 1984). Part of this flexibility is rooted in the
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5 supposedly quick adjustments non – union contractors can make to changes in the demand for personnel. On average, cas ual agency workers in the U.S. construction industry earn forty percent less than their colleagues who are employed by a contractor (Bureau of Labour Statistics, 2001). The average wage rate for casual agency workers is affected by the large share of low – pay, low – skill jobs in total casual agency employment in the industry. For instance, nearly one in every five casual agency workers in the construction industry is a labourer, which ranks among the lowest paid construction jobs. Wages may be further presse d downward because casual agency workers are typically working at non – union job – sites. Generally, non – union jobs tend to pay less than union workplaces (Schwenk 1996; Foster 2000). Day labour is increasingly being institutionalized as community – based organ izations respond to the dire situation of many of these workers and for – profit intermediaries see a market niche (Ruckelshaus and Goldstein 2002). There is a fine line between the for – profit day labour intermediaries and the casual work agencies operating in the construction industry, although they are some times counted as both working – and as a contract firm employee (Polivka 1996). In some community – based day labour programmes (such as the San Francisco programme) workers can set their own wages , earning anywhere between $11 and $18 an hour, and have access to health care. Casual work agencies that specialize in low – skill labour on a day – to – day basis do not consider themselves as being involved in day labour, but see their work as . A manager of a staffing agency in San Jose explained how workers on a thirty – day project are considered to be working thirty separate days and getting paid after each day they have worked (Van Velzen, 2005). Casual employment in Britain in Britain in 1920, where casual labour was becoming the norm for unskilled workers. It was in the fight against those conditions that the first great unions of unskilled workers were built, including the British dock workers in the early 20th century (Broad, 1995). The re – launch of an apparently rudderless administration turned out to be a return to the neoliberal certainties of Blairism, just at the point when the failure of global financial market was cutting the ground was trying to derail an attempt by Labour MPs to win equal rights for the 1.4 million agency and
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6 c asual workers, whose growing exploitation goes to the heart of the casualization and security of Across the country, workers are increasingly being signed up by employment agencies to take the place of directly employ ed staff, on worse pay and conditions. From basic wages and overtime to sickness benefits, holidays, maternity rights and pensions. In parts of London and the east coast, the midlands and north – west, trade unions report an epidemic of under – cutting agency employment (Hall, 2002). In food processing, call centres, hotels and social care, including in the public sector, agency labour is being used to create a two – t ier work force (Cheadle, 2006) . Spain is not an exception to this general trend, although, as i t has occurred in other countries, not all forms of atypical employment have experienced a similar evolution, which basically depends on specific national circumstances (institutional, legal or economic factors, among others). According to the Encuesta de PoblacionActiva (the Spanish Labour Force Survey) (EPA), since 1987 to 2001(cited in Gonzalez – Rendon, 2004) workers under casual contracts experienced a 148 percent increase in contrast to an approximate 34 percent increase in total employment. Similarly, salaried or waged casual work, both under casual and open – ended contracts, grew about 195 percent during the same period (Matusik and Hill, 1998; Kochan, 1994) . The preponderance of casual employment over other forms of flexible work, makes Spain a unique and interesting case for the analysis of the consequences of this type of employment in the labour market, as shown by the growing number of studies focused on this country in recent years (Ruiz and Claes, 1996; Alba, 1998; Amuedo, 2000; Sánchez and Tohar ia, 2000; Ferreiroand Serrano, 2001; Dolado, García and Jimeno, 2002). The most frequent reason cited is the need for a more flexible workforce by employers derived from the changes that occurred in the business environment since the beginning of the eight ies (Gonzalez – Rendon, 2004) . Therefore, both the growth of the service sector and the dualistic employment structures found in an increasing number of firms are at the basis of the growth of casual employment in most developed countries, as it has been the case in Spain. However, as m entioned above, these reasons do not directly explain the overwhelming use of casual labour over other forms of nonstandard work in Spain. At the beginning of the 1980s, Spain had one of the most rigid labour legislations in Europe, basically characterized by: (a) the existence of stringent limits on the use of overtime, (b) excessively high lay – off payments on both fair and unfair dismissals, (c) the prohibition on the use of casual help agencies, (d) restrictions on the hiring of casual workers
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8 employment. However, as it is stated in the literature, in certain cases, casual jobs, as other forms of nonstandard work, might entail opportunities for those workers who do not want to be linked permanently to a single organization. In Sp ain, this cannot be considered a valid argument as the majority of casual employment is involuntary, suggesting that there is a great mismatch between employer and employee preferences for casual contracts. One of the problems around the debate on labour flexibility is that, traditionally, discussion around this subject has tended to rely more on perceptions rather than systematic analysis (Booth, 2002). To solve this problem, empirical research has recently been conducted to test for the assumption that c With respect to casual employment, there is sufficient empirical evidence from different countries that support the idea that workers under fixed – term contracts, receive, ceteris paribus, lower salaries than permanent employees (Bentolila, 1994; Booth, 2002), are less motivated and satisfied (Purcell, 1999) and receive less training (Booth, 2002). Some researchers have also tried to analyze the link between casual employment and the risk of a work accident, although empirical findings are in this case more mixed (Rousseau and Libuser, 1997; Amuedo – Dorantes, 2002). The polarization of the Spanish lab our market between permanent and casual employees, together with the adverse consequences mentioned above, might produce income inequality as well as other social negative impacts derived from the lack of job security, all of which is a matter of much poli tical concern. However, these negative effects are lessened if casual employment is not a dead end where workers are trapped indefinitely, but rather a transitory situation that would sooner or later lead to a permanent position. Casual employment in the Netherlands In many industrialized countries, labour markets have grown to be increasingly flexible. This flexibility has become manifest in, among other things, a substantial use of casual workers, (OECD 1993; OECD 1996). Companies have turned to this ex ternal numerical flexibility to respond to fluctuating demand for products and services. Almost at the same time, employers, unions and governments championed employability through lifelong, job – related learning. At first sight, employment in the construc tion industry appears to be casual by nature: a worker is employed for the duration of a construction project, and laid off as soon as the work is completed. The industry is characterized by short – term seasonal cycles as well as by long – term conjuncture – re lated fluctuations. Another characteristic of the industry is that, whether a project
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9 is carried out in residential, commercial or heavy construction, almost every building project involves multiple crafts (Van Velzen, 2005). The nature of the industry thus requires an organization of the work process that is flexible to meet the variability in the demand and is able to cope with the variety in the demand for construction work. The first suggests the existence of a numerically flexible organization (Colean and Newcomb 1952). The second calls for functional flexibility, requiring a range of different construction specializations. Buildin g firms could hire a large number of tradesmen with different specialized skills during peak times and fire them when demand for construction work drops. This, however, would not be efficient. Instead, construction firms try to reduce transaction costs in volved in hiring and firing by subcontracting the majority of the work (Eccles, 1981). By subcontracting to specialized firms, construction companies secure numerical and functional flexibility. Subcontractors provide a flexible pool of workers to the main characteristics of the construction project, a general contractor uses subcontractors that specialize in the trades and skills required for the project. With the introduction of prefabricated building material and concrete pouring during the second half of the twentieth century came a heightened specialization in the division of labour. Consequently, large construction projects have been broken down into smaller projects requi ring relatively narrow skill – sets, prompting a growth in the use of casual workers. This has created room for labour market intermediaries, such as casual work agencies, to provide labour for very short spells, aimed at the completion of narrowly defined t asks. Most worksite personnel, especially bricklayers and carpenters are permanently employed with a construction firm (Kok, 2001) . The ban had its origins in the widespread abuse by intermediaries, contractors and subcontractors of market – mediated staffing arrangements in order to evade payment of social insurance contributions during the 1960s. During the ban, trade unions and employ associations continued to jointly explore the possibilities to reinstate casual agency work. They agreed that a complete ban on placement agencies in the building trades would distort the efficient operation of the labour market (Van Velzen, 2005).
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10 A fter a one – year transition period, during which casual agency work in the construction industry was reintroduced on an experimental basis, the ban was lifted in 1998. In the experimental year 1997, 65 percent of all casual agency workers was new to the tra des, 35 percent of the casuals was journeyman, as reported by the Dutch Economic Institute for the Building industry (EIB, 2001). In all other cases, a casual agency worker is only covered by nt that deal with wages and worker compensation. In sum: casual agency workers in the construction industry receive equal pay for equal work. Casual employment in Finland Ever since the 1980s, the proportion of casual employment has steadily increased in Finland. In 1985, the proportion was only 10 %; by 1998, almost every fifth employee (18 %) was working on a temporary basis (S aloniemi, 2004 ). This trend in casual employment is in accordance with the general development in European Union countries. Howev er, within the European Union context, the incidence of casual employment in Finland is high – only Spain has utilized casual employment more massively (33% in 1998) (Booth et al., 2002). In itself, the rate of casual employment is only the tip of the iceberg: behind the numbers there are huge structural, economic and even legal differences which make comparisons difficult. Even the basic nature of casual employment varies essentially between countries. For example, until recently, agency contracts have been marginal in Finland, whereas, in Spain, 16 % of all temporary contracts are managed by agencies (Garzia – Perez and Munoz – Bullon, 2001). With good reason, the effects of Employment Protection Legislation (EPL) have also merited attention when differenc es in casual employment rates have been a focus: in the UK, for example, the rate has remained relatively low (7% in 1998). This does not, however, indicate stability and security in labour markets but a low level of EPL in general. Correspondingly, EPL ha s frequently been cited as a reason for the high rate of casual employment in Spain (Gonzales – Rendon, 2004). In contrast, rigid EPL cannot explain the high casual employment rate in Finland, where comparisons between OECD countries show Finland to be betw een the most strictly and least strictly regulated countries (Kosonen and Vanska, 2004).The general need for flexibility is hardly a satisfactory explanation for the causes of the growth of casual employment. Previous analyses have provided and tested dive rse explanations for this growth, ranging from changes in legislation to changes in the supply and in demand of employees. Reflecting on the situation in
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11 the USA, Golden and Appelbaum (1992) stress the demand factor as the main cause behind the rise of cas ual employment. product demand, and the decline in the relative bargaining power of labour that have led firms to take advantage of short – The recession in Finland in the early 1990s profoundly reshaped both labour markets and the whole of Finnish society (Aho and Lehtonen 2002). The employment crisis in Finland was even deeper than that in neighbouring Sweden. In other words, the wish among Finnish employers to keep their personnel highly flexible by hiring staff only for short periods has also become an essential reason for the extensive use of casual employment (Kosonen and Vanska 2004). Studies have identified some common and widespread f eatures characterizing casual employment. Young age, female gender, low occupational status, belonging to ethnic minorities, a low level of education and a fragmentary work history tend to increase the probability of casual employment (Hipple, 1998; Bielen ski and Ebenhard 1999; Kalleberg, 2000, Zeytinoglu and Muteshi, 2000a; Campbell and Burgess 2001). The features above reflect the general features of labour market segmentation (Brosnan 1996; Hudson 2001). In many ways, the basic characteristics of tempora ry employees in Finland are consistent with the mainstream in industrialized Western economies. In the Finnish context, however, there are some aspects that merit special attention: employees with a level of education above that of a basic level have a hig her probability of casual employment. This is almost contrary to the majority of studies which stress the connection between low education and casual employment. Casual employment in India Unemployment weakens the bargaining position of the workers and en ables employers to hire workers on terms and conditions of work they dictate. Some of the emerging flexible labours categories are casual and temporary workers, consultants, agency workers, home workers, daily workers and part – time workers. It was found th at, as a whole, over the seven years of liberalization (between 1991 and 1998) dualism in the labour market increased. The share of permanent manual workers declined from close to 68 percent in 1991 to 64 percent in 1998 (Jenkins, 2004). Not only did the share of casual workers increased even faster, but also the big firms resort to the greater use of casual workers. Holding all other factors constant, firms employing 50 – 99 workers and those employing 500 or more workers increased the share of casual worke rs significantly between 1991 and 1998 (Shenoy, 2005).
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