Economic Insecurity and Global Casualisation: Threat or Promise?

Abstract

Casualisation has both negative and positive sides, for both workers and employers. This article considers how the positive sides could be developed while allowing casual work to continue to grow. In reviewing the advantages and disadvantages of casual labour for employers, the paper depicts casualisation (and the related process of ‘informalisation’) as usually involving seven forms of economic insecurity for the worker. The modern casualisation that is taking place as part of globalisation involves a steady restructuring of social income and labour recommodification, in which many workers are finding that an increasing share of their remuneration is coming from money wages, which are a relatively insecure part of their social income. As a result, there is a need to find new ways of providing income security that could allow workers to accept the more casual work arrangements without excessive anxiety and alienation. The article is, essentially, an argument for a re-assertion of a common sense of social solidarity, in which casual work can be a normal part of a flexible labour and work system.

Appendix: A Road to Re-casualisation

What is euphemistically called “the international community” has promoted (re-)casualisation. Spokespersons for the World Bank, IMF and OECD would not put it like that. They would call it “labour market flexibility”. But the claim is not hyperbole. Pressure is placed on governments, by employers and their lobbyists and by international agencies, to roll back protective legislation and regulations, or not to introduce them, ostensibly in the interest of employment generation and national “competitiveness”.

By this means, policymakers can rationalise making it easier to dismiss workers and less costly to do so, narrowing the difference between regular and casual, lessening the need or incentive for employers to resort to casual labour. One could even have an increase in casualisation at the same time as there was a reduced incidence of workers in casual statuses.

All countries are being monitored, and this is not an innocent sport. Consider just one way by which casualisation is being promoted. The World Bank, drawing inspiration from OECD research, has constructed a Rigidity of Employment Index, by which it ranks countries. Let us presume it did not calculate this index just for amusement, but rather intends it to be used in its lending operations, for putting pressure on governments to change their policies, and as a guide to firms contemplating investment decisions (which is why the results are presented in the Bank’s “Doing Business” website). Let us also presume that the words chosen by the Bank are not random, so that “rigidity” refers to objects that should be cut. It follows that a country with a high Rigidity Index score must be “bad”.

Then turn to how the index of badness is created. It turns out to be a castle of indicators. It is worth highlighting some of the key building blocks, since they relate to some of the main elements of casualisation. High scores on any component of the index is “bad” (rigidity), low scores are “good” (flexibility).

The Employment Rigidity Index is computed as the sum of a “difficulty of hiring index”, “a rigidity of hours index” and a “difficulty of firing index”, divided by three. Among indicators used in the hiring difficulty index is “whether term contracts can be used only for temporary tasks”. If yes, that is bad. If a country has a restriction on the duration of short-term contracts of <5 years, it fits in the bad boy column, whereas if it allows a series of short-term contracts for longer, it is good.

The component indicators of “rigidity of hours” are tendentious, giving good (low) scores for countries that favour employer freedom, bad scores for those regulating working hours and providing leave. The “difficulty of firing” index is more relevant to casualisation, and has eight components. To give a flavour of the process, if employers are obliged to “notify” a government agency that they are “terminating workers” (sic), that is a mark up for badness (or “difficulty”, which cannot mean good). If the law requires a company to obtain “approval from a third party to terminate one redundant worker”, that is regarded as doubly bad (i.e., given a weight of two in the index).

Some countries do remarkably badly in the resultant Rigidity of Employment Index. I hesitate to name and shame. But African countries are particularly “bad”. Whereas the USA is a model of goodness, scoring 0 (very, very good; cannot be better) and Canada should be filled with pride, scoring 4 (very good; room for improvement), Angola scores a shocking 64, the Central African Republic a scandalous 73, South Africa scores 43.

Before you rush out to demand that these countries should de-rigidify, look at the small print in this charter for casualisation. The indicators are calculated on the basis of a long list of “assumptions about the worker”, as well as “assumptions about the business”. In other words, the estimates are based on a selected type of worker, not all workers or even some notion of average worker. Thus, the “difficulty of firing index” refers only to those workers who are, inter alia, (1) men, (2) full-time, (3) in regular employment, (4) employed “in the same company for 20 years”, and (5) earning a “salary plus benefits equal to the country’s average wage during the entire period of his employment”.

I would give my Index of Certainty a score of 0.99 that there are few Angolans who would qualify. If right, the rigidity index is a sham. This would not matter much if it were not being used to persuade governments to reduce safeguards against casualisation. But New York Credit Rating Agencies are probably using the index in their country ratings, while consultants are advising multinationals on the cost of “doing business” in various countries.

The message is simple: Roll back those barriers to casualisation! I am inclined to be sceptical. We have been doing fieldwork in Mozambique, and most people there are in statuses that analysts would describe as “casual” by any standard imaginable in Canada or the USA. The World Bank’s index of employment rigidity for Mozambique is 54.

This would be amusing, were it not for the uses to which such measures are put.