n.b. this was written in late 2013. it was produced to inform discussion. it is somewhat UK-specific.
FLEXIBILITY is the name given to the LOW-FRICTION MOVEMENT OF CAPITAL
Capital attempts to flow as quickly as possible, marshalling with minimal effort the correct qualitative and quantitative values required for its specific mode of production. This is experienced as the increasingly unimpeded operation of its turnover.
Long contracts for the purchase of labour power limit the ability of capital to vary the quantity of labour power, as demand and technological processes change. Potentially it leaves capital liable to payments to labour beyond the completion of the defined period within the turnover for which labour inputs are needed.
Flexibility in the labour market decreases the risk of uncertainty in the production process, and therefore under- or over-production of commodities, as well as sub-optimal or wasted expenditure on labour.
Flexibility allows capital to attempt to match the period for which it contracts labour power with its required labour inputs during turnover time. This reduces the volume of capital required, and increases productivity.
The utopian ideal for capital is to have labour “on tap”, as an infinitesimally dividable, instantly available commodity that requires no inputs (or externalities) beyond simple market cost.
SUBJECTIVE 'FLEXIBILITY' is a function of relative MARKET POWER
What does it mean to have a flexible workforce? What is the nature of flexibility? Are powerful workers necessarily 'inflexible'? Zero-hour contracts certainly have more flexibility for employers, but for employees they mean reserving to a single employer their potential to labour for any other, or to plan their non-work time. Bourgeoise economists refer to this as a reduction in the 'elasticity of labour', particularly egregious in the low-wage labour market segment where elasticity is meant to be particularily high.
:. paradoxically, a zero-hour contract reduces the general stock of available labour in the market by 'reserving' it to one employer – potential labour power is wasted if it could have been valorized but was not due to contractual circumstances (exclusivity) – the labour market's velocity reduces. This reduces the collective power of capital, and employers, in society.
This is not possible except where there is a practicably inexhaustible labour supply – a continuing glut in the market.
This 'reserving' is considered worthwhile to the individual capitalist because:
it guarantees her a subset (pool) of labour at short notice.
it does not leave her with large fixed, recurring, liabilities accruing to labour.
it reduces costs involved in hiring and firing – building on savings available through agencies and temping (note that reforms to tribunals and compulsory redundancy have also affected this)
The collective capitalist would only complain about this abuse (contradiction of individual and collective interests) of a collective resource (the labour market) were the glut of available labour to end (e.g. approach full employment).
The worker tolerates it for various reasons:
They find value in the type of flexibility offered (typical of high-value labour, and those with 'casualized' lifestyles, urban?).
They expect nothing better.
They cannot win for themselves any better settlement (typical of low-value labour).
:. zero-hour contracts and 'workfare' are cut from and feed the same contradictory social cloth – employers are further advantaged via the social and political crisis of unemployment where:
a) zero-hours employers make use the glut to set not only the price of labour, but the conditions under which labour will relate itself to the employer (market liberalizations of the last 30 years have simply reflected the real composition of power in the economy).
b) workfare further increases the supply of labour, with conditions similarly 'voluntary' (in the same way that a zero-hours contract is entered 'voluntarily'), or increasingly ideologically loaded as the charitable efforts of a state apparatus weary of its recalcitrant populace.
This is the situation: where workers are unable to find a job in the labour market - even one that does not guarantee payment - they are increasingly obligated by state threats of reduced support, and active coercion, to work without payment outside of the formal labour relationship (note, this section doesn't include consideration of what is called 'labour market interventions on in-work claimants').
Workfare turns the market relation of labour-capital into a debt, work is carried out not for wages but in return for the maintenance of material existence provided by the dole.
Workfare has the effect of further decreasing the market power of labour, removing the small advantage of dole wages.
In general: the crisis of mass unemployment is mobilized via workfare to further drive down the market power accruing to labour.
Capital is attempting to access labour as flexibily and cheaply as possible.
Q. At what point does this run into a general crisis of reproduction for the precariously employed, increasingly indistinguishable – because disciplined by the same formations – from the structurally unemployed?
FROM THE HORSES' MOUTHS: UNIVERSAL CREDIT REDUCES FRICTION
“The large number of people affected by Universal Credit means that it could have a significant impact on the labour market and consequently on the macro-economy. For example, if Universal Credit significantly boosts labour supply it should put downward pressure on wage growth, which could stimulate investment, growth and equilibrium employment. ” (Universal Credit: Evaluation Framework , DWP 2012)
“The Government wants to create a welfare system that provides people with the confidence and security to play a full part in society through a flexible labour market within a competitive modern economy. Progress has been made over the past 20 years. Britain is internationally recognised as having some of the most effective labour market policies in the world, helping people, including those previously written off as ‘inactive’ in the labour market, to move off benefits and into work through conditionality and support.” (Universal Credit: welfare that works , DWP 2010, £19.75)
'We are considering replacing the current system of hardship payments with loans to the extent that is possible. We also want to consider ways of ensuring that those who persistently fail to meet the requirements imposed upon them cannot rely on these alternative sources of support for the entire duration of their sanction. This will help ensure a better balance in the system and should help incentivise people to meet their commitments, both within the current benefit system and Universal Credit. However, we remain committed to protecting vulnerable people and their dependants. Therefore, hardship payments will continue to be paid where relevant. ” (Universal Credit: welfare that works , DWP 2010, p.29)
“Mandatory Work Activity... will be for up to four weeks and aimed at helping the recipient develop the labour-market discipline associated with full-time employment such as attending on time and regularly, carrying out specific tasks and working under supervision. ” (Universal Credit: welfare that works , DWP 2010, p.29)
“Establishing a single withdrawal rate, and eliminating the hours rules currently present in Working Tax Credit, has the potential to create a much more flexible labour market. Workers will be able to work the number of hours that most suits their needs and those of their employer, without being constrained by the structure of the benefits system. Employers will find that their workforces become more flexible and open to opportunities for progression. ” (Universal Credit: welfare that works , DWP 2010, p.55)
“The proposed changes are therefore welcome. We expect them to have three main impacts on businesses: * Businesses should find it easier to fill hard-to-fill vacancies, as moving into jobs - including those that are short term and irregular – becomes more attractive for claimants. * By increasing labour market flexibility Universal Credit should reduce costs for employers their business. * Finally, they should have a larger pool of potential employees to choose from. ” (CBI Briefing Note: The Government's Welfare Reform : Universal Credit, 2012, p.2)
“The CBI is the only organisation outside government that sits on the Universal Credit Service Design Steering Group. Through this we are working with government to make the design of Universal Credit more effective ...” (CBI Briefing Note: The Government's Welfare Reform : Universal Credit, 2012, p.4)
“A number of proposals suggested improving online job search facilities for people looking for flexible, short hour jobs (and for employers to advertise such jobs). Proposals submitted included a sponsored website that provides details of claimants as a pool of local top up workers available to employers. Named individuals could be booked instantly, possibly at short notice and for short periods...” (Extending labour market interventions to in-work claimants – call for ideas: Summary of responses received , DWP 2013 p.10)
The flexibility brought about by Universal Credit – the ability for claimants to change their working hours and earnings without worrying about the impact on their benefits - was widely welcomed by respondents particularly employers. Respondents suggested that significant efforts needed to be made to ensure that these benefits were widely understood in order to encourage claimants to think about earning more. ” (Extending labour market interventions to in-work claimants – call for ideas: Summary of responses received , DWP 2013, p.12)
'“It is a more nuanced debate ... It is about [employers] having a range of options … and zero hours has got to be seen as part of a menu,” said Mr Beatson. “At certain times of the business cycle certain parts of the menu will be used more widely.”... Nearly all McDonald’s staff are on these contracts...' ('Zero-hours work kept down dole queues, says CBI', Financial Times, August 6th 2013, http://www.ft.com/cms/s/0/676a3b5a-fec4-11e2-97dc-00144feabdc0.html?siteedition=uk)
“The review conducted over the summer highlighted 4 key areas of concern:
* Exclusivity: This is where someone agrees to a contract that does not guarantee them a minimum number of hours and is stopped from working for another company. This is described as an ‘exclusivity clause’. In certain cases this can mean that people were stopped from looking for work elsewhere particularly when they needed more hours to bump up their earnings. Feedback from employers themselves suggests awareness that there can be abuses that limit flexibility.
* Transparency: There is no clear or legal definition of a ZHC and it can cover a number of working arrangements. This can lead to confusion and a lack of understanding on contract details and what it means for the individual. In some cases people were not aware of the fact that there was a possibility that they might not be offered work on a regular basis.
* Uncertainty of earnings: The amount of money a person on a ZHC can expect to earn is dependent on the number of hours worked. This means that people on a ZHC find it hard to calculate earnings and it can lead to concerns about how benefits might be affected.
* Balance of power in the employment relationship: Our review found that people perceived they would be penalised if they did not take hours offered even if the hours were offered at very short notice and did not suit. This meant it could lead to a climate of fear that a person is less likely to be offered regular work in future if they failed to accept the hours on offer.” [MEGALOL Compare with DWP's language on 'conditionality'.] (Press release: Cable announces plans to boost fairness for workers, BIS, Sept 2013)
“Full-time employees were more likely to have experienced wage cuts or freezes and increases in workload, but part-time employees were more likely to report that their contracted working hours had been reduced...” (The 2011 Workplace Employment Relations Study, First Findings, WERS p.8)
