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How precarious are we?

By: 
Peter Hogarth

February 17, 2018

New Capitalism? The Transformation of Work, by Kevin Doogan
Reviewed by Peter Hogarth

In a recent Rabble Podcast, former NDP MP Andrew Cash claimed that a third of the Canadian workforce is outside of the traditional employer/employee relationship. He is wrong and statements like this can lead to dangerous conclusions for those working for more equality and social justice.

He is not alone, the language of precarious work is everywhere. Journalists, academics, politicians and activists on the left and the right seem to be constantly talking about the dangers of offshoring, the weakening position of the working class, the danger of technology taking human jobs, and the end of salaried employment. Kevin Doogan’s New Capitalism? The Transformation of Work attempts to investigate some of these ideas, which have gained such prominence over the last two or three decades.

Doogan’s book is a response to theories that have become common sense that suggest that a new global economy has emerged that has transformed our lives; that the mobility of capital, the pace of technological change, and the privatization of the welfare state has made the world of work fundamentally different and more precarious. Both left-wing labour leaders and right-wing economists can be heard declaring that companies are outsourcing, jobs are migrating to the global south and that a job for life is a thing of the past in this “new capitalism.” New Capitalism? digs deep into the actual numbers and uncovers some of the mysticism around these claims that Doogan insists are more myth than reality.

The book attempts to “rematerialize” some of the grand claims of these “new capitalism” ideas. First of all, Doogan challenges the foundation of the post-industrial outlook of new capitalism ideas as seeing the world of work only in terms of production, ignoring the world of service provision and the important role it has in the economy. This blind spot means that new capitalism theorists miss out on the tremendous growth of employment in the service industry while being preoccupied with corporate restructuring in manufacturing and the very small world of free-lance journalism and contract faculty in which they reside.

Insecurity

Doogan offers an important corrective to these skewed views of the labour market: “it is the contention of the work presented here that the labour market responds to two imperatives and is determined by the requirements of both production and reproduction…only a minority of the labour force is engaged with the immediate needs of production. In the advanced economies there are more people employed in education and health services than in manufacturing.” When these important features of the workforce are taken into account, the adjustments in employment patterns over the last several decades are no longer easily explained by a rise of so-called “flexible work” but rather by the growth of jobs in education, health and social service provision.

This blinkered view of the labour market extends into the definition of what precarious work is. Proponents of the new capitalism thesis, predicting far-fetched conclusions such as the end of salaried employment and the complete atomization of work, seem to be looking for precarious work everywhere and their statistics and data fail as a result. Often new capitalism thinkers end up lumping together such different groups as part-time workers who have been at their job for more than five years, high-paid consultants working on short-term contracts, and seasonal agricultural labourers to present a distorted view of the labour market as increasingly precarious.

An often cited statistic to confirm the new norm of temporary, precarious employment is the “fact” that Manpower Inc. (a temporary labour agency) was the largest company in the US, employing roughly 600,000. However, this statistic reveals the problem with the data touted by new capitalism believers; temporary work firms count everyone in their yearly total, even those who were on the payroll for only one day. Doogan notes “on a typical day, the Manpower Inc. workforce varies between 80,000 and 112,000.” The stat does not hold up to scrutiny like many of the stats that “prove” we are living in an era of new capitalism.

The OECD (Organization of Economic Co-operation and Development) reports an average rate of temporary employment of some 12% in 2000 (compared to 10% in 1985). Job tenures of less than a year were reported by 58% of temporary workers, 1-2 years for 16.9%, 2-3 years for 4.3%, 3-5 years for 9.9% and more than 5 years for 11.6% of temporary workers. Based on this large OECD study, claims that standard employment relationships are disappearing appear to be completely overblown. Yet in contemporary coverage of labour markets, temporary employment has a profile that is completely disproportionate to global workforce trends. 

Outsourcing

Similarly, the legends of outsourcing completely overshadow the actual facts of how many jobs are exported to low-wage labour markets in the global south. The horror stories jobs being outsourced to China or India, told by bosses and the left alike, can combine to create a working class too scared to demand higher wages for fear of losing their jobs and xenophobic attitudes to workers in other countries. Yet, a reading of the data reveals that the mobility of capital is exaggerated and foreign investment, when it does happen, most often goes to highly developed economies in the global north.

Doogan notes, “During the period 1990 to 2003…world Foreign Direct Investment (FDI) flows accounted for a mere 8% of world domestic investment.” In fact, the US, where the idea of jobs being shipped overseas looms so large, has received more FDI than it has spent in other countries since the 1980s. And when it does invest in manufacturing overseas, 80% of it has been in high wage countries.

Even in the age of “unfettered corporate globalization,” capital remains remarkably immobile and bound up with the policies of its home country. The globalization of investment has been limited and is growing very slowly over time.

The book emphasizes that, contrary to popular new capitalism ideas, the nation state is not powerless in the policies of global corporations. Rather, many of the changes in workforce composition (for instance, the reduction in manufacturing jobs), can be blamed on changing government policies. Governments constantly intervene in the labour market on the side of capital in ways that create and extend precarity for workers. That is why it is so important for campaigns such as the Fight for $15 and Fairness to put demands on the state and strengthen the collective power of workers inside and outside of unions.

Technology

The ideas of new capitalism are perhaps weakest when talking about technological change and what it means for the economy and workforce. New capitalism thinkers are quick to talk about knowledge economies, flows of information and technology changing the ways in which people work. However, they seldom talk about the hardware needed to transmit information, the workers needed to build laptops and smart phones, or the tiny fraction of jobs that can be done remotely on a flexible schedule.

As Doogan puts it, “the dematerialization of knowledge and information is premised on the conceptual separation of motion and matter. The philosophical or theoretical flaw is that the production and consumption of knowledge and information remains materialist even it its circulation is immaterial.”

A battle for interpretation

So, why does all this matter? The point of this book is not to convince readers that the current system of capitalism is a-ok and does not require changing. Rather, these arguments are important for anyone thinking about how we can actually change this system. The proliferation of the notion that we are living in a time of unprecedented labour precarity; where everyone’s job could be shipped overseas tomorrow and the state is powerless to intervene, can have the effect of demobilizing people. The core principle of socialism is that the working class has the power to change society due to its strategic importance in the capitalist system. If workers accept the ideas that they are disposable and unimportant in a rapidly transforming economy, what agency do they have to fight? If their jobs can be shipped out of country at the drop of a hat, why demand anything?

In asserting that workforce-retention remains extremely important for most employers, or that capitalist firms do not have the ability or inclination to move factories quickly, or that the nation state is far from a hapless victim of corporate policies, Doogan is asserting the ways in which workers have power versus their employers, and can make demands on their own governments to intervene in the labour market on behalf of workers.

 In countering the prevailing logic of new capitalism, he is fighting back against the perverse logic that prevails “when trade unions recognize that employers use the threat of capital relocation as a bargaining tool but seem to prepare the ground for them in stressing the vulnerability of the American workforce to cheap foreign labour.”

New Capitalism? The Transformation of Work is an incredibly rich book, filled with facts that tear apart prevailing myths of work and re-centre the working class as a force that can truly transform the economy for the better. 

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