Atypical and irregular employment in Southern EU cities: resurgence of an industrial reserve army?
Abstract:
Labour processes across the EU are restructured in order to facilitate the recovery of profitability. Diminishing wages, extending working time, intensifying work and increasing the industrial reserve army of labour are normal means and outcomes of this restructuring. However, the implementation of these restructuring policies are necessarily uneven within EU regions due to unequal internal power relations and different productive structures. In this frame, this paper studies atypical and irregular employment in crisis-hit cities of Italy, Greece and Spain. Specifically, it focuses on primary as well as secondary material collected from selected capital and port-cities of the three Southern EU countries. The paper discusses the increasing significance of an industrial reserve army, especially in the deprived cities like Thessaloniki and Naples. The paper argues that what is more important than defining the potential groups of workers that belong to the reserve army or its size, is to reveal how this powerful segmenting mechanism is acting in favour of collective capitalist interests.
Keywords: Flexible and atypical employment, uneven development, regions, crisis, Greece, Spain, Italy
1. Introduction
The implementation of labour flexibilization policies broadly follows the course of capitalist accumulation; especially in the current era of crisis when devalorisation accelerates[1]. Labour processes across the EU are restructured in order to facilitate the recovery of profitability. Diminishing wages, extending working time, intensifying work and increasing the pools of redundant labour are normal means and outcomes of this restructuring. However, the implementation of these restructuring policies are necessarily uneven within EU regions due to unequal internal power relations and different productive structures. Flexible employment arrangements are as specific to particular localities and time periods, at least as much as devalorisation is sensitive to place and time (Smith, 1986; Gialis and Leontidou, 2014).
In this frame, this paper studies atypical and irregular employment in crisis-hit cities of Italy, Greece and Spain. Specifically, it focuses on primary as well as secondary material collected from selected capital and port-cities of the three Southern EU countries. The paper discusses the increasing significance of an industrial reserve army, especially in the deprived cities like Thessaloniki and Naples. Its floating part is comprised of all those who lost their jobs due to costs reductions. Its latent part is either directly or indirectly pictured in the reproduction of solo self-employment. Finally, the stagnant part comprises all of the poor and underpaid atypical forms. The paper discusses these categories while argues that what is more important than defining the potential groups of workers that belong to the reserve army or its size, is to reveal how this powerful segmenting mechanism is acting in favour of collective capitalist interests. It does so by dividing workers while making those who still have a typical job more frightened and dispensable than in the pre-crisis period (Gialis and Herod, 2014).
2. Relations of production in capitalism
Wage labour is the founding relationship of the capitalist mode of production. However, the forms and the conditions under which wage labour is performed are not static but they change during subsequent historical periods. The greater part of the 20th century had been dominated by the belief that developed capitalism is associated with a more or less fixed framework for employment. This belief has been rightfully questioned since the eruption of the global capitalist structural crisis[2] of 1973. The course of the last century, when seen retrospectively, reveals that the predominance of fixed employment was but a short period in the long history of capitalism. Full-time, permanent employment, often seen as a byproduct of capitalism’s sophistication, actually came at high cost for the working class, and only after fierce struggle. It is often disregarded that flexible and precarious forms of employment never ceased to exist as they are a powerful tool in the hands of the capitalist class in order to ‘discipline’ labour and to extract more surplus-value from it. Capital has always a strong incentive to pay workers the least possible, have them work longer and more intensively and bear as much of the costs of their social reproduction as possible. Flexible and precarious forms of employment not only facilitate directly these aims but they also pressurize indirectly fixed forms of employment to follow the same path (Gialis and Leontidou, 2014, Mavroudeas, 2014).
Capitalism, after the heavy-handed restructuring that accompanied the 2nd World War entered a ‘Golden era’ (1950—1973) (Lipietz, 1987). During this era and because of the increased socio-political weight of labour it conceded an increase of the part of fixed employment. This concession did not hinder capital accumulation as the war had created ample space for increased accumulation and had boosted technical progress and labour productivity. Thus, for a lengthy approximately 25-years period increased fixed employment co-existed with vigorous capital accumulation. However, once this spree met its social and technical barriers falling profitability and the resulting overaccumulation re-emerged (Barnett, 1998). The global crisis of 1973 was the expression of this conundrum. The eruption of the crisis led to a prolonged period of capitalist restructuring, that is of heuristical attempts by capitalism to re-configure itself in a new sustainable form. This shift was associated from the mid-1980s and onwards with neo-liberalism. An essential part of the neo-liberal policies is the attack on workers’ rights and the flexibilisation and precariousness of employment is a powerful mechanism for this. From the end of the 1990s capitalism moved from ‘national neo-liberalism’ to unleashed internationalization of capital (or ‘globalisation’). The latter, coupled with labour-saving technological changes, increased international competition that pressurized wages and stable forms of employment (Lipietz, 1987; Harvey, 2014).
3. The industrial reserve army
The profit motive (that is the quest for increased profits) defines the modus operandi of capitalism. However, at the same time this quest carries with it the seeds of disaster as the continuous increase of profits leads ultimately to overaccumulation (as the search for extra profits by individual capitals sets in motion the tendency of the rate of profit to fall). To put in a nutshell, for Marxism it is the system’s very success that leads to its failure. In order to combat falling profitability, capitalists must activate counteracting economic mechanisms (Marx, 2004). The increase of workers’ exploitation (expressed by the rate of surplus-value) is a major counteracting mechanism (Marx, 2005). Labour flexibility is a prominent measure for increasing exploitation. have to extract the highest possible rate of surplus value from their workers Consequently, labour flexibility was always a historical pursuit of capital (Bruno, 1979; Buzar, 2008). Of course, there exist historical variations, that is flexibility is stronger during specific epochs and weaker during others.
After the eruption of the 1973 crisis flexibility became one of the main instruments of capitalist restructuring. As (Marx, 2004, ch.25:3) argues “there must be the possibility of throwing great masses of men suddenly on the decisive points without injury to the scale of production in other spheres. Overpopulation supplies these masses”. This surplus labour is what we characterise as flexible labour today: a surplus population of workers who have no equivalent rights and benefits as of those working full-time.
Unlike what would be logical at a first reading, the absolute size of this labour reserve and capital accumulation are directly proportional. Furthermore, the reserve’s mass expands faster than that of the actively employed labour force (McIntyre, 2011). “The greater the social wealth, the functioning capital, the extent and energy of its growth, and therefore also the greater the absolute mass of the proletariat and the productivity of its labour, the greater is the industrial reserve army” (Marx, 2004: 798).
The industrial reserve army is not a malfunction of capitalism but an ordinary and predictable process (McIntyre, 2011). The reason for this is that the expansion of capital and labour reserve share the same cause: the progressive devaluation of capital. In periods of capital accumulation, if the organic composition of capital stayed stable, it would be legitimate to assume that the demand for labour-power would increase. But this is a non-realistic hypothesis, since accumulation favors constant capital over variable; this happens because capital expands based on an increasing productivity, and a crucial part of this is labour-power exploitation. This increasing exploitation of labour-power is expressed through the progressive devaluation of capital. Since capital expansion is based on the increasing exploitation of variable capital and is enhanced by emphasizing variable capital, the demand for labour-power falls behind the rate of accumulation. Therefore, the same elements producing capital accumulation also expand the surplus laboring population (McIntyre, 2011). Consequently, periods of crisis do not reveal novel patterns in the expansion of these surplus populations, but affect the temporary fluctuations of their mass, exacerbating the impact of capital devaluation, without in any case being a fundamental cause of their growth (Marx, 2004).
Thus, the industrial reserve army of labour is always present in capitalism. What changes from period to period is its size. Furthermore, workers that are thrown into unemployment (that is become members of this industrial reserve of labour) do not cease – at least to a great extent – to be part of the working class. The industrial reserve of labour and the active working population are communicating vessels. Every unemployed worker, who retains his working capacity, has a chance of being recruited by capital again. Therefore, the unemployed, according to Marxist theory, are also integral part of the working class (Peet, 1975, Clark, 1980).
The industrial reserve army is divided by Marx in three categories: the floating, stagnant and latent. The floating part consists of workers working short periods of time and then turning jobless again, depending on the oscillations of the industrial production cycle. The latent part comprises this agricultural population that is on the point of passing over into the urban and manufacturing proletariat. Flows of labour force from rural areas to urban centers, preceding rapid urbanization processes, for example in China, are signs of a latent surplus labour force. The stagnant part includes all those employed under extremely irregular conditions; namely, the marginal sections of atypical and undeclared employment. Those provide capital with an “inexhaustible reservoir of disposable labour-power” as they work the longest and paid the less. It comes from the redundant forces of – mainly decadent sectors of – industry and agriculture and its mass takes up most of the industrial reserve army (Marx, 2004; Grover and Piggott, 2005).
As it has been made clear already, the increase in industrial reserve army’s mass goes hand in hand with capitalist accumulation. But the process of reserve’s expansion is a complex one and shows important oscillations, due to the factors pushing its relative size up or down. More specifically, those factors tending to diminish the relative size of surplus population are the following. Firstly, the increased demand for labour which leads to an augmentation of absolute employment as capital accumulates. Secondly, those workers employed outside the dominant circuit of capital; in other words, those employed outside capitalism’s set of relations of production. Thirdly, capital’s increased need for reproductive labor (e.g. staff for personal service). On the other hand, we have these factors tending to exacerbate the “problem” of the industrial reserve army; technological breakthroughs, exponentially growing population as capitalism evolves due to an abrupt decrease in death rates (which balances out falling birth rates in the global north) and new sources of wage labour created by capital expansion (McIntyre, 2011) (for example the latent part of the reserve army which is “freed from the means of production” and “is forced to rely on wage labor to survive) (Marx, 2004).
If our hypothesis concerned a closed economy, the factors decreasing the relative size of surplus labour population would outweigh those increasing it, mainly because the latter would meet their limits. Technological advances may not be labour saving in all cases but rather capital saving. Moreover, some scholars support that there is no proof that technological innovation causes absolute decline in the demand for wage labour (McIntyre, 2011). Also, falling birth rates in the global north would dry out the source of new young workers. Most importantly, this latent part of the surplus labor force would eventually disappear as an entire labor market of a region submits under the capitalist mode of production. In the long run, for a closed economy, capitalist accumulation would produce increased demand for labour, wherein a problematic supply of labour should lead to shrinking surplus laboring populations and upward pressures on wages (McIntyre, 2011).
However, those tendencies created within the context of a closed economy can be easily outweighed by an open capitalist economy. Even in the case of zero capital export, an open market economy can spur surplus laboring populations. Firstly by increasing the size of the population whose small size manufacturing activity cannot compete with industrial products, secondly by creating (partially in consequence of the previous point) inbound flows of migrant labor and thirdly by connecting to the capitalist circuit, through market exchange, a “wide range of producers who do not employ wage labor”. This spectrum of producers can be connected to formal economy by exchange, even though it is “not characterized by capitalist relations of production”. These relations include “slavery, sharecropping, encomienda, tenancy, indentured servitude, long-term labor contracts, and debt peonage” (McIntyre, 2011, p. 1492-93). If we count in the possibility of capital export, the ability of surplus populations creation increases dramatically. Summarily, and as has been pointed out above, the same forces enhancing the expansion of capital do favor the increase of the relative size of the surplus labour army.
It should be highlighted that, the industrial reserve army is practically non-erasable in capitalism; it is a precondition of the capitalist mode of production (Bruno, 1979). This fact is related to four (4) important dimensions highlighted below:
Firstly, the redundant labour force is used for staffing emerging or rapidly developing sectors of the economy, without this mobilization bearing negative impact in other established spheres of production. Simply put, unemployment and underemployment renders the labour force more flexible to fluctuations caused by shifting demand patterns in the market or by technological breakthroughs which change the mode of production substantially. This need for more flexible responses to shifting demand may have been an imperative of the post- 1973 crisis era and a seemingly logical justification of the expansion of flexible employment, but it was highlighted some two centuries ago by Herman Merivale (1841, 1842), professor of political economy.