The compensation hypothesis goes east: FDI and welfare state demand in postcommunist countries

While existing research provides evidence that globalisation sparks citizen demand for the welfare state in wealthy Western democracies, less is known about how globalisation affects public demand for welfare elsewhere. This study explores the link between globalisation and welfare preferences in postcommunist countries by examining workers at multinational corporations (MNCs). These workers have previously been found to have lower levels of job security, even in Western Europe. Additionally, in the postcommunist context, MNC employment also frequently offers better opportunities than other available jobs. This combination of risk and benefit creates higher demand for social insurance (such as unemployment insurance) because MNC workers have both higher job insecurity and higher costs of job loss (if the benefits of MNC employment make it difficult to find an equally good job). Original survey data from Ukraine shows that MNC workers experience greater insecurity and are paid more than other workers. They also express preferences for more expansive welfare programmes, prioritising those related to labour market insurance. This pattern of MNC workers’ experience and preferences is confirmed in cross-national survey data from 30 peripheral economies, demonstrating that the compensation hypothesis has wider application than previously shown.     

Chronic Illness and health insurance-related job lock.

Job duration patterns are examined for evidence of health insurance-related job lock among chronically ill workers or workers whose family member is chronically ill. Using Cox proportional hazard models to indicate the effect of health insurance and health status on workers' job duration we allow for more general insurance effects than that shown in the existing literature. Data for workers in Indiana predating the Health Insurance Portability and Accountability Act (HIPAA) are used to examine the potential effect of HIPAA on job mobility. Among the workers in this sample who relied on their employer for coverage, chronic illness reduced job mobility by about 40 percent as compared with otherwise similar workers who did not rely on their employer for coverage. Results reported here identify previously under-appreciated job lock among chronically ill workers and workers whose family member is chronically ill, clarify how one best researches job lock, and indicate the potential effect of policies aimed at alleviating job lock and promoting inter-employer worker mobility.     

Finding political capital for monetary tightening: Unemployment insurance and partisan monetary cycles

How do governments find the political capital to raise interest rates in pursuit of inflation stabilisation? Against common wisdom, this article shows that the ability of governments to exercise tight monetary policy largely depends on the level of unemployment insurance. Unemployment insurance is particularly useful to social democratic parties since their core constituency – labour – is the hardest hit by economic downturns. Empirical evidence from 17 OECD countries over thirty years demonstrates that high levels of unemployment insurance present a strong incentive for social democratic governments to respond more aggressively to positive changes in inflation. These findings resolve the puzzle of why partisan monetary cycles are not often observed in the literature and have important policy implications, given continued calls for scaling down social insurance.     

Re‐imagining Geographic Labour Mobility through ‘Distance Labour’

Geographic labour mobility is necessary for increasing productivity in Australia. Long‐distance commuting has been found to be especially significant. However, important considerations are being excluded from policy discussions within the Productivity Commission on this topic. This commentary covers these important omissions. They are, namely, the problematic conflation of the terminologies of ‘fly‐in, fly‐out’ and ‘long‐distance commuting’ with mining, and a lack of qualitative research investigating the material impacts of these labour practices on people's lives. This commentary puts forward a new terminology, ‘distance labour’, to better include those industries on the margins of distance commuting. By accounting for the social worlds of workers engaged in distance labour, the Productivity Commission could increase the validity of its datasets, and provide more egalitarian policy recommendations.     

Preferences for Employment Protection and the Insider–Outsider Divide: Evidence from France

Insider–outsider theory argues that in dual labour markets there are two groups with opposing preferences regarding protection against dismissal: (i) insiders with permanent work contracts who defend employment protection, because it increases their rents, and (ii) outsiders (temporary workers and the unemployed) who see protection as barriers to mobility and demand deregulation. Although this argument is influential in the political economy literature, there is little empirical research on outsiders’ preferences regarding employment protection. This article tests the argument using French data on support for a proposed reform of employment protection. The results show that permanent and temporary workers do not differ significantly in their support for employment protection, while some evidence indicates that the unemployed do show greater support for deregulation. The article concludes that insider–outsider theory overemphasises the relevance of employment protection for temporary workers and that care should be taken not to place these workers in a composite outsider group with the unemployed.     

Defending the organisation,not the members: Unions and the reform of job security legislation in Western Europe

European labour markets are often described as rigid with comparatively high levels of job protection that do not allow for the flexible adjustment of employment to economic fluctuations. This interpretation overlooks important sources of flexibility, however. Research has shown that recent labour market policy reforms have allowed for the creation of two‐tier labour markets consisting of insiders in standard employment relationships and outsiders in non‐standard employment. This outcome has typically been explained by pointing to the representational interests of unions or social‐democratic parties. It has been argued that rather than protecting all labour market participants, unions and social‐democratic parties focus on the interests of their members and their core constituency, respectively, most of whom are in standard employment relationships. In contrast, it is argued here that unions' institutional power resources are the crucial variable explaining this outcome. In difficult economic times, when unions are asked to make concessions, they will assent to labour market reforms, but only to those that do not fundamentally threaten to undermine their organisational interests. In the context of job security legislation, this means that unions defend the protection of permanent contracts while they compromise on the regulation of temporary employment. This ‘second best solution’ allows them to protect their organisational interests, both by retaining their institutional role in the administration of dismissals and by living up to their institutional role as one of the organisations responsible for the direction of labour market policy reform. Using fsQCA this article shows that unions' institutional power resources are more apt to explain the observed two‐tier reform pattern than the unions' or the social‐democratic parties' representational interests.     

Industries, Occupations, and Trade Policy Preferences

The nature of one’s work, not just who one works for, is central to political and economic life. Yet models of trade policy preferences mostly ignore occupation, focusing exclusively on industries (perhaps because industries are the usual organizing dimension of economic policymaking). This article proposes new measures of how much risk trade imposes on different workers based on how diversified their occupation is across industries, thus considering both industry and occupation. Having a job specific to any sector appears to encourage protectionism, regardless of that sector’s comparative advantage, supporting the idea that public opinion may treat trade policy as insurance.     

Political parties,globalization and labour strength: Assessing differences across welfare state programs

This article investigates how globalization and organized labour condition partisan effects on different welfare state programs. The main argument is that the conditional effect of globalization on government partisanship depends on how relevant a program is to the needs of vulnerable groups and that organized labour additionally affects this relationship. Analyzing 21 OECD countries between 1980 and 2011/2014, empirical evidence largely corroborates this argument: Firstly, the expectation that partisan differences decrease with globalization in general and especially in weak labour countries in the case of programs that are less relevant for compensation holds true for old-age provision and partly for sick pay insurance. Secondly, and in accordance with theoretical expectations concerning programs that are primarily relevant for compensation, partisan differences increase with globalization, in general regarding education and only in strong labour countries regarding unemployment benefits. Therefore, while globalization constrains national politics’ room for manoeuvre in some areas, parties are still able to follow their ideologically preferred policies and respond to compensation demands in others.     

Demonising ‘the other’: British Government complicity in the exploitation,social exclusion and vilification of new migrant workers

This article demonstrates the close and complex connection between the demonisation, exploitation and exclusion of new migrant workers. In so doing, it testifies to the blurred boundaries between the categories of severe labour exploitation, forced labour and slavery. This study highlights the absence of citizenship rights as crucial to understanding the vulnerability to demonisation, exploitation and exclusion that characterises the embodied experience of such workers. It also highlights the key role of citizenship as a means for such workers to make rights claims. In the UK, new migrant workers, particularly those arriving from Eastern Europe since 2004, have been increasingly designated by government and media as interlopers in a tight labour marketplace. Whilst their collective economic contribution is sometimes welcomed, they are regarded as ‘external’ to UK society and citizenship, a potential threat to indigenous values and culture, and in competition with British workers. Rarely are migrants afforded the space in public and private spheres to express their individual needs, wants, cares or perspectives. UK migrants have variously been portrayed by the tabloid media and irresponsible politicians as rapacious opportunists, as benefit scroungers, criminals and potential terrorists. The predominant discourse around new migrant workers in the UK is that they are not citizens, but temporary residents who are expected to work industriously and to remain otherwise unseen and unheard until they return to their country of origin. No further contribution to social and political life is required or expected. It is within such an unsupportive environment that new migrant workers in general, and undocumented migrants in particular, have become highly susceptible to employer and gangmaster abuse and exploitation.     

Postwar changes in the income position of the aged

Since the war the relative number of aged persons with income from employment has declined, while the proportion with income from social insurance benefits has increased. Despite the fact that social insurance benefits yield a lower average income than do earnings, the averaged aged person's income in 1952 was higher in both current dollars and dollars of stable purchasing power than it was in 1945. The improvement is the result of several factors, including larger earnings by aged workers, increased benefits paid retired workers and their aged survivors under social insurance and related programs higher old-age assistance payments and the rise in the relative number of persons with money income. The growth in the average aged person's income, however, has been at a rate lower than that of the average income of the population as a whole. As a result the average person has had a smaller share in total consumer income in each of the years since 1945 that he had in that year.     

Grammar Schools,a Policy of Social Mobility and Selection—Why?

Initially, four plausible reasons for introducing selection in secondary education are examined, three of which are irrelevant to contemporary debates about expanding grammar‐school education. These are: first, to ration education in less advanced economies; second, to increase the supply of skilled labour within an expanded national elite; third, as part of a ‘segmented’ system of education. A fourth—increasing upward social mobility—is open to two objections: first, the May government's proposals are so limited as to have little likely impact on mobility and, second, upward mobility in the twentieth century was possible only because of structural change in the British labour market, and that will probably not continue in this century. Finally, it is argued that attempts to select the ‘best’ in any activity or skill are necessarily highly imperfect, and are far less accurate than testing who does and does not meet some minimum level of competence.     

Let's go outside: bodies,prostitutes, slaves and worker citizens

In liberal thought, slavery is imagined as reducing the human being to nothing but a body, while the free and equal political subjects of modern liberal democracies are held to be abstract, universal and disembodied individuals. In theory, bodies are also unimportant in the wage labour exchange. Though traditional models of worker citizenship insist on state and employers' duty to protect the human worth of worker citizens, they also assume the disembodied, thing-like nature of commodified labour power. Because bodies are so obviously important in the exchange between prostitute and customer, sex work is difficult to reconcile with liberal fictions of disembodiment, and one strand of feminist debate on prostitution is preoccupied by the question of whether prostitutes are like slaves or wage labourers. Protagonists on both sides of this debate often reproduce liberal understandings of labour power as a ‘thing’ that can be detached from the person. And yet labour power is also a contested commodity, and wage labour has historically been likened to slavery by activists struggling against the commodification of labour power. This article argues that stepping outside liberal fictions of disembodiment and recognising the parallels between prostitution, wage labour and slavery would allow greater scope for establishing a common political subjectivity amongst prostitutes, other wage workers and all those who have an interest in halting and reversing the current global trend towards the commodification of everything. In this way, common political ground between prostitutes and other wage workers is more visible when we step outside liberal assumptions about embodiment, slavery, work and citizenship.     

Local workplace organising in the wake of globalisation: Street vendors and autoworkers in Puebla,Mexico

Global changes that seem to limit the intellectual and physical space in which workplace organising takes place, have led many analysts to suggest that labour organisations have become less important politically in recent years. While conceding that global processes have made the workers’ task more difficult, the argument here is that the nature and character of resistance by workers continues to influence political and economic outcomes. When that resistance is ineffective, as is the case to varying degrees with the disparate groups of Pueblan workers compared here, it may appear that global forces are too strong to be challenged. This paper argues, however, that workplace organisations that creatively adapt their structures and strategies to changing circumstances should be able to defend the interests of their constituents, as well as potentially influence political outcomes at local, national and perhaps even international levels.     

Deal or no deal: why do social pact proposals fail?

Since 1980, over one-quarter of social pact proposals have failed to result in social pact agreements. In order to explain this high failure rate, the social pact formation process is broken down into two stages. In the first stage, governments decide whether to propose a pact. In the second stage, governments and labour unions decide whether to complete a pact agreement. Using data on social pacts in Western Europe, the article finds that pact proposals are likelier in the presence of moderately centralised unions, high unemployment, and large budget deficits; but that pact agreements are likelier when employers’ associations are centralised, and labour unions have a high degree of organisational centralisation, low membership fractionalisation, and represent a small share of workers. It is submitted that the inability of moderately centralised unions to complete a social pact agreement may be a primary cause of the high failure rate of social pact proposals.     

‘Democratic Socialism’ and the Concept of (Post)Capitalism

This article explores the ‘democratic socialism’ being proposed by new left movements on either side of the Atlantic, and evaluates its claim to be a form of anti- or postcapitalism. It argues that in the democratic socialist worldview, the line between capitalism and socialism rests on the balance of power between workers and capitalists in the economic sphere. While traditional social democracy seeks to redistribute wealth but leaves relations between workers and capitalists within firms untouched, democratic socialism seeks to abolish private property in the economic sphere. Production is controlled democratically by the workers themselves, in league with a workers’ state. The article critically appraises the claim that such a scenario constitutes a form of postcapitalism. Drawing on the work of critical Marxists such as Moishe Postone, it argues that capitalism is not primarily defined by private property relations in the economic sphere, but rather the peculiar social form of capitalist labour. Unlike in pre-capitalist societies, for labour in capitalism to secure a continued basis on which to reproduce the means of subsistence, it must be socially validated as ‘value-producing’. The criteria for value validation is not set in the workplace, or within a single nation state, but rather on the world market. The article concludes that, for all its merits, the democratisation of workplaces does not overcome the need for this social validation, but rather constitutes an alternative form of managing the process of production in this context. As such, democratic socialism, like social democracy, remains susceptible to the same imperatives and crises as other forms of capitalist production, and so cannot be said to constitute a form of ‘postcapitalism’.     

Globalism,exit, and free social riders: A dysfunctional integration theory

Abstract. This paper examines the role of capital disinvestment in the development of common EU policies, and suggests that mobile capital in low–tech sectors (where technology gains do not support high unit labour costs) is susceptible to high social costs, and will avoid them through exit. Integration theories have failed to assimilate the implications of this. While theorists have been busy making the case for either states or institutions as the key actors upon whom integrative outcomes in Europe depend, not enough attention has been paid to the influence of organized interests, and particularly whether they derive systemic power from the structure of the international economic system. Three points may be made. First, the relative power of interests changes with the internationalization of the economy. Second, the power of capital relative to labour is likely to vary along several axes: the degree of mobility, the level of international competition faced by the sector or firm, and the sensitivity to policy costs. Third, the dilemma posed by capital mobility to political bargains among socio–economic actors may help us get to the bottom of the long–standing debate among integration theorists regarding both the likely outcome of integrative efforts and the identity of the most relevant actors.     

Reforming the French welfare state: Solidarity,social exclusion and the three crises of citizenship

The article explores recent debates about citizenship and social provision in France. It examines the essential concepts comparable to ‘social citizenship’, as understood in British debates, and the role that they have played in the development of the French welfare state. Its conclusions are threefold. First, social provision in France is founded on the principle of solidarité, which holds that all citizens face a series of social risks (unemployment and illness) that make them dependent on one another. Second, as the traditional insurance principle (the core of the French welfare state) is founded on socio‐economic conditions (concerning the nature of social interdependence and social risk) that no longer exist, the emergence of these social ills has led to not one but three crises of citizenship: a crisis of coverage, of legitimacy and of participation. Third, while it is too early to draw definitive conclusions, recent policy reforms suggest that the difficulties faced by French welfare are encouraging moves towards the British model of tax‐based (rather than insurance‐based) financing of social provision.     

Between workfare and enablement – The different paths to transformation of the welfare state: A comparative analysis of activating labour market policies

Abstract.  The concepts that address different paths to transformation of the welfare state as a 'workfare', an 'enabling' or an 'activating' state share the idea that traditional welfare policies, mostly aiming at decommodification, are more and more replaced by social policies emphasising (re-)commodification. Activating labour market policy therefore is supposed to play a central role within the paradigm shift of welfare state policies. It is understood to involve a mix of the enforcement of labour market participation, the conditioning of rights and growing obligations of the individual at one side, and an increase of services in order to promote employability and restore social equity at the other. In this article, the different perceptions of the workfare and the enabling state perspectives on the positive and negative aspects of activating policies are reconstructed as 'pure forms' in order to obtain theoretical standards against which the empirical cases of activating labour market policies in Denmark, the United Kingdom and Germany are characterised and compared. The actual reform path is described by a combination of two indicators: the strength of the workfare and the strength of the enabling elements of the activating labour market policies. The evidence on activating labour market reforms confirms that in both dimensions a move in the same direction is taking place, but without producing growing convergence. Different welfare state types keep on producing different mixes of workfare and enabling policies, leading to very different levels of decommodification and (re-)commodification. Thus, an ongoing divergence of policies also exists within the new paradigm of an activating labour market policy, although single countries seem to change their alignment to a particular welfare state type.     

Local labour market competition and radical right voting: Evidence from France

How do the economic effects of immigration affect radical right support? The evidence in support of the labour market competition theory — which posits that the economic threat posed by immigration to jobs and wages leads to radical right voting — has been mixed. On the one hand, individual-level surveys underreport economic drivers because of social desirability bias. On the other hand, contextual studies show contradictory findings due to an over-reliance on units of analysis that are too aggregated to meaningfully capture the competitive threat posed by immigrants. This paper identifies the influence of labour market competition on radical right voting at a local level in contexts where native workers are directly affected by the arrival of immigrants who have similar or higher skillsets. Using an original longitudinal dataset of fine-grained municipal electoral, demographic and economic data from France over the 2002–2017 period, the paper provides empirical evidence of local contextual influences of economic competition between natives and immigrants of any skillset. Under local conditions of material deprivation, measured by the local unemployment rate, the effect of labour market competition on municipalities’ radical right vote share is amplified. Moreover, higher radical right support is observed in municipalities with a higher share of any one of the following groups: low-skilled natives, medium-skilled immigrants or high-skilled immigrants. This supports the hypothesis that immigrants with higher qualifications are compelled to accept lower-skilled jobs, and are thus perceived as a competitive threat to low-skilled natives. By reconciling radical right contextual studies and research on the political economy of immigration policies, this paper highlights the importance of a local analysis in detecting the effect of labour market competition on radical right support. This paper also explains why some local areas are more prone to radical right support than others over time.