How typical are atypical employment relations?

Why the erosion of standard employment relations in Europe and North America requires a new interpretation

Marcel van der Linden

is a senior fellow (and former research director) of the International Institute of Social History and professor of the history of social movements at Amsterdam University. His most recent German publication is "Workers of the World. Eine Globalgeschichte der Arbeit" (Frankfurt on the Main: Campus, 2016).

Politicians, economists and sociologists – they all assumed until recently that in the long term capitalism produces certain »typical« employment relations that harmonize best with profitability and capital accumulation. Reality, however, is considerably more complex.

Capitalism produces and reproduces many different forms of exploitation. Slavery existed not only in early colonialism; it also exists today in various regions such as Amazonia or South Asia. The putting-out system, which has families manufacturing commodities or parts of commodities at home for merchant-producers, is far from being a pre-industrial phenomenon only (as the term »proto-industry« suggests); rather, it is widespread again today and seems to be gaining in importance. And in agriculture, sharecropping – which many consider a thing of the past – has been making a steady comeback since the 1970s in many places, for instance in California.

The notion that there exists within capitalism something resembling a typical or standard employment relation is maintained not only by defenders of the »social market economy«, but also by radical critics of society. The concept of a standard employment relation assumes it is a form of wage labor defined by the following key features:

* continuity and stability of employment;
* full-time employment by a single employer in the latter's enterprise (not at home);
* a minimum wage level that allows an employee (male or female) to secure the livelihood of a small family; 
* legal rights to protection and participation;
* a system of social insurance based on the duration of the employment relation and the income earned.

Social policy for a long time assumed that the »typical employment relation« was the logical end product of capitalist development and that all other forms of employment would gradually dissolve. This view has been undermined since the 1970s at the latest, though. In highly developed countries, a trend has divided the working population into two sectors: a relatively small sector of permanent employees, whose labor processes are rendered more »flexible« by means of just-in-time production, job rotation, quality circles, etc., and an expanding precarious sector of bogus self-employed workers, part-time workers, auxiliary staff, etc. In the Global South, where the standard employment relation has always been a marginal exception rather than the rule, precarious employment relations, underemployment and long-term unemployment have been predominant.

In the Global South it was already understood in the 1960s that regular wage labor had nowhere become predominant, in spite of all the efforts the nations put into »development.« On the contrary, both in rapidly expanding cities and in rural settings, poor households increasingly found themselves forced to combine a variety of survival strategies that despite their diversity all shared one common feature: it was impossible to label them as standard employment relations. This new insight was most prominently reflected by the growing popularity of the concept of the »informal sector«, which made its debut in the early 1970s. Since then, the concept has been criticized countless times, yet given the absence of convincingly more accurate alternatives it remains in widespread use.

Moreover, feminism made it clear that traditional historical and social science theories had heavily relied on an implicit and untenable assumption: the notion that wage workers can only be studied and understood as individuals – whereas in reality they are almost always part of a family household. Thus, the work performed by wage laborers is always only a part of the total work performed within a household.

Recent research has made the mutual links connecting the various criticisms of the old paradigm of the standard employment relation more visible. Though occasionally still vague, the outlines of a new interpretation are beginning to emerge. It is hardly questioned today that an informal sector not only exists in the metropoles as well, but that in many countries it is also expanding. Similarly, the notion that households combine several survival strategies is also becoming more widely accepted.

A global analysis of labor issues focusing on the past two or three centuries teaches us that both historically and spatially, the standard employment relation is in fact rather »atypical.« In the so-called Third World, workers only rarely have employment that is full-time, permanent and linked to social welfare benefits, which is why the small number of workers with relatively protected positions are often considered part of a worker aristocracy – a characterization that is probably not entirely accurate, since these relatively privileged workers often retain close relations to their home villages and transfer a considerable part of their income there.

It is also becoming increasingly clear that the worker households in the metropoles have rarely been fully dependent on wage labor (combined, of course, with domestic work, in particular but not exclusively by women). Nor are they fully dependent on wage labor today. The wage usually has been and continues to be supplemented by the additional incomes of various family members. The incomes take the following forms, among others:

* production of consumer goods for personal use (subsistence work). This includes the production of clothes, the keeping of pigs, chickens and the like, as well as garbage collecting;
* petty commodity production and petty trade, e.g. tailoring, smallholding, collecting rags for resale, hawking, etc.;
* renting out land, work tools, living space, etc., including renting out a bed or room to a bed lodger or subtenant;
* money, goods or services received without any immediate return service, including support from friends and acquaintances in times of need or through charity and welfare;
* appropriation of other people’s property, pilferage at the workplace, theft and embezzlement;
* loans obtained by incremental payment of debts, pawning, etc.

Moreover, recent historical research suggests that the number of working-class families in Europe and North America able to survive on only one wage has always been quite small. The historical significance of the male breadwinner model therefore needs to be strongly qualified. Many family members were often wage-dependent at the same time, with individual family members even holding several jobs simultaneously – a situation we encounter today in the so-called Third World.
 In light of this, the erosion of standard employment relations in Europe and North America needs to be reinterpreted as a return to what under the world-capitalist system can seen as the »normal« condition of irregular employment relations.
These new insights have far-reaching implications. First, we now need to qualify the dichotomy of »First« and »Third-World« underclasses somewhat – although of course there continue to be momentous differences. In the cities of the »First« World, social strata are emerging whose employment relations are in some ways beginning to resemble those of the urban poor in the slums of the »Third« World, in spite of the major prosperity gap between both regions.

Second, the dividing lines between wage labor and small business are far more blurred than we have so far assumed. Both in the »Third« and in the »First World« there are extensive gray areas of (bogus) self-employment in which people work, formally, as freelancers although in reality they are dependent on one or two customers only. This type of self-employment has been widespread in peripheral capitalism for decades; recently, it has also been expanding significantly in the metropoles, e.g. in the construction sector. Generally speaking, there seems to be a historical connection in highly developed capitalism between periods of rising unemployment on the one hand and the stagnation or expansion of »small-scale« self-employment on the other.

Third, the boundary between wage laborers and »lumpenproletarians« is also hardly as clear-cut as older theories suggest. On the one hand, regular wage laborers display many forms of »lumpenproletarian« behavior, resorting for example to begging and prostitution as survival strategies in times of distress, or pilfering at the workplace, which from a business perspective is very much a form of criminal behavior. On the other hand, the situation in the Global South directs our attention to a social underclass that can be characterized neither as a reserve army of labor in the Marxian sense nor as part of the classic lumpenproletariat. In this respect, precarious employment relations also make it inevitable to draw up and define new concepts.

Fourth, the concept of »free« wage labor is more ambiguous than generally assumed. According to the classic definition, the doubly free wage laborer disposes of his own labor power as a commodity »as a free man« and »has no other commodity for sale.« In many cases, however, the situation of wage workers is more complex. Even as formally free persons they may be bound to an entrepreneur, e.g. through debt (advances that need to be repaid), accommodation (company housing, etc.) or pension claims.

Fifth and last, the strict distinction between urban and rural areas commonly drawn in Europe needs to be put into perspective. In contrast to what modernization theory would like to have us believe, often the relations between migrants in cities and their home villages do not weaken over time – they intensify. This is probably due to the absence of a system of social security, such that villages function as a social safety net during times of economic crisis. Incidentally, it has been shown that many villages (e.g. in Indonesia during the current crisis) can no longer maintain this function, as the rise of the commodity economy has exhausted their subsistence capacity.

All of this means that the category of the working class assumes a somewhat different meaning and, most importantly, becomes more varied. The standard employment relation is far less »normal« than we have so far assumed. Our task is therefore not primarily to account for the disruption of wage labor relations linked to social welfare benefits, but on the contrary, to establish why at certain points in history standard employment relations emerged at all.