Flexible Employment - The future of Britain's Jobs

Book Review

Flexible Employment The future of Britain ’ s Jobs By Shirley Dex and Andrew McCulloch.

Houndsmills, England: Macmillan Press Ltd, 1997. 207 pp. ISBN 0-333-68214-9 hardcover

The goal of this book is to provide an analysis of the effects of flexible employment on the British economy and workforce, and to predict the future of Britain’s jobs. The book’s ten chapters are grouped into four parts of different length. Part one deals with the employers, which offer flexible jobs. Part two, which is the longest part of the book, describes the individuals who are employed in flexible jobs. Since not only individuals but also households are affected by flexible jobs, part three takes a look at the household’s perspective on the experience of flexible jobs. Part four stresses the place of Britain in the global economy and draws together some conclusions about the questions which were raised in the book. In the first three parts, Dex and McCulloch mostly present statistical facts which contain a lot of information, but which are sometimes difficult to follow, when explanations are missing. Some readers might be disappointed by the book’s use of statistical material and the missing of a more descriptive explanation. The authors use different data sources such as the Labor Force Survey (LFS) and the British Household Panel Study, as well as statistical material from the OECD.

The authors define flexible work as “…a description of a change in the distribution of labor market jobs, away from standard full-time permanent employee contracts, and towards a growth in various types of non-standard employment forms”. Nonstandard forms of employment are self-employment, part-time work, temporary work, or working at home and other.

Chapter one reviews the employers’ use of flexible work. Dex and McCulloch draw the conclusion from different studies, that one reason for employers to create flexible jobs is their search for more flexibility towards anticipated and unanticipated changes in output, relative factor prices or production technology. Therefore employers try to recruit a “core” staff of permanent, full-time employees and a group of temporary part time employees at lower costs to fill in the gaps on a short-term basis. This enables them to deal with anticipated changes in the economic environment using different employment opportunities. Flexible jobs therefore offer the possibility to partly transfer “…the uncertainty from the employer onto the employee…”. Furthermore, the authors say that the cost reducing effect of flexible jobs clearly exceeds the costs of implementing flexible jobs, encouraging firms to increase their use of flexible work. Because the 1988 Labor Force Survey found that 55 per cent of all part-time employees in Britain were not covered by the main employment rights, it is easy to follow the book’s argument that by using flexible work, employers can especially save on non-wage costs, such as statutory sick pay, maternity leave entitlement and statutory redundancy entitlements. Higher recruitment costs through a higher turnover of staff or lower levels of moral and motivation are mentioned by the authors as costs caused by the use of flexible jobs. However, Dex and McCulloch come to the conclusion that only “relatively few” employers created non-standard jobs to reduce non-wage labor costs, but the authors fail to explain other possible reasons for the creating of non-standard jobs.

In chapter three the authors examine the labor market of flexible jobs. They present evidence that in all sectors more women than men are employed in flexible jobs, and that women are also concentrated in the disadvantageous types of flexible jobs. Further results of the examined statistical material are that flexible jobs are less likely to have any managerial or supervisor responsibilities, they have higher proportions with short tenure and they are less likely to be unionized.

Chapter four presents detailed figures about the individuals who are in flexible jobs in Britain. Over 20 per cent of men and 50 per cent of women worked in non-standard jobs, especially because the latter were more likely to be in part- time jobs when they had to take care of young children. Although many statistical outcomes are explained, some questions, which come out of the statistics, are left open. For example, the authors state that men were more likely to be in self- employed jobs than women, but they mention no reasons for that. Again, the authors’ conclusion is more a summary of these facts than an explanation.

In chapter five, Dex and McCulloch take a closer look at the individuals in flexible jobs. They examine personal characteristics like age, material status or ethnic origin, as well as look at the qualification and work history of those in flexible jobs. Self-employment constituted the majority of men’s flexible jobs, while part-time jobs constituted the majority of women’s flexible jobs, which “…is largely a reflection of their family circumstances”. Both men and women were more likely to be employed in a flexible job either at the beginning or at the end of their career. Flexible jobs, and especially temporary jobs were less likely to offer training than permanent full time jobs. The book’s examination concerning “Job Satisfaction” showed that while workers in temporary jobs had the lowest level of job satisfaction, working in a flexible job does not necessarly mean lower levels of satisfaction. Employees in permanent part-time jobs were most satisfied with their jobs; especially women in part-time jobs experienced higher amounts of satisfaction than those in full-time employment. The examination concerning general health questions showed quite a similar picture of women employed in part time jobs being slightly happier than women in permanent full-time employment The authors’ examination of the changes in flexible work in Britain over time (chapter six) offers more explanations than in other chapters. The number of flexible jobs appears to have increased in Britain through the 1980s and 1990s. Dex and McCulloch attribute some decreases in the 1990s to the recession. Part of the increase is related to women’s increased participation in the labor force. The high increase of older men in flexible jobs comes from their increased use of part-time jobs as a “transition from employment to retirement”. The book sees some evidence that part-time employment growth of women may have stabilized, but expects men’s part-time employment to further increase. However, for a sizeable group of both genders, being in a flexible job is one step of the transition from unemployment to a permanent full-time job (chapter seven).

In the third part of the book (chapter eight) Dex and McCulloch analyze the extent to which households are effected by flexible employment. They find that about a third of British households experience flexible jobs in the 1990s. If past experience is taken into account, the majority of three quarters of all British households has some experience with flexible jobs. By looking at the different types of households it is not surprising that especially the couple households with children were the most likely to have any experience with flexible work. Among others, the authors also examine the households’ members concerning their mental health and well being. The lowest stress was experienced by wives, who had a flexible job while their husbands worked full-time permanently and by husbands, who were self-employed or in full-time permanent jobs with wives in full-time permanent jobs. Dex and McCulloch come to the conclusion that the well being of husband and wife is much influenced by their joint economic activity and job status. Also interesting is that households with members in flexible jobs were not generally associated with lower household incomes.

To compare Britain with other industrialized countries, the authors use data collected by the OECD and by Price Waterhouse and the Cranfield School of Management (PWCM survey). Although these statistics partly rest on differing definitions, which makes comparison not always easy, they can provide the reader with a broader picture of the degree and characteristics of flexible employment in many industrialized countries. One should also remember that temporary jobs, part- time and self-employment can have different legal statuses and conditions in different countries, which means that these forms of flexible employment do not necessarily represent the same degree of disadvantage in each country. Among other things, Dex and McCulloch point out, that the UK, like many other industrialized countries, experienced a decline in union membership from 1980 to 1990 which brought the UK to a membership rate of 39 per cent, which was average among OECD countries. Similar to that trend, the UK also had declining rates of collective bargaining, along with some other countries. Britain does not show a clear picture concerning the different types of flexible jobs. While the country has one of the highest proportions of part-time employment, and the part- time share of total employment has been raising more rapidly than in many other industrialized countries, the most disadvantageous form of flexible employment, temporary employment, has remained stable in the UK. Furthermore, the book shows that Britain has one of the lowest proportions of temporary jobs at five per cent. The authors argue that this is due to the fact that these jobs may be less likely to be specifically linked to training than in other countries like France or Germany. The reader can find one argument against this assumption in the presented statistical material in chapter nine. The UK’s amount of involuntary temporary employment was below the average of that of the EU-members (1987, based on Eurostat Labor Force Survey Data). Concerning self-employment, the book shows that Britain experienced a large increase between 1979 and 1990, but still was not among the countries with the highest proportion of self-employment. The UK also had a higher entry from unemployment into self- employment than other European countries. The UK also had one of the highest proportions of workers working on Saturday or on Sunday. In addition, the authors point out that weekend work was more common in Britain, than in most other European countries.

Having presented and analyzed a remarkable collection of statistical material, Dex and McCulloch draw the “main conclusion” of their examination and try to predict the “future of Britains jobs” by exploring the implications of flexible employment for the British economy. The authors see the danger of Britain “sliding into being a low wage, low skill economy in which the quality of jobs is declining”. They point out that being employed in a flexible job often means to work below one’s level of skills. This represents a loss of skill to the economy, which is often not being replaced because flexible jobs usually provide only little or even no training. After presenting their arguments, Dex and McCulloch turn to the question of whether or not Britain will survive “if these are the jobs it seeks to create and provide its living”, which they answer with a clear “No”. Although the presented material supports the authors’ view in many ways, the book also shows some figures which might keep the reader from seeing the British economy as being in such a weak position. These figures are as previously mentioned: The most disadvantageous form of flexible employment, temporary jobs, has remained stable at its low level, and the amount of involuntary temporary employment was below average in the UK. Employees in permanent part time jobs were most satisfied, and flexible jobs helped many people with their transition from unemployment to permanent full-time employment and from employment to retirement. In addition, the authors fail to consider the possible alternatives of the British policy of encouraging the development of flexible jobs, which could have been discussed while comparing Britain to other industrialized countries. Non-standard forms of employment offer employers a greater flexibility and therefore probably enable them to produce at lower costs. In today’s global economy this is a clear advantage in the competition for investments and jobs. Not without good reason, today Britain has one of the highest levels of direct foreign investments and one of the lowest unemployment rates among the western European countries. Having many people employed in flexible jobs might mean a waste of potential workforce, but having many people without any job might mean an even greater waste. Another point is training. Certainly, non-standard jobs offer less training than permanent full-time jobs do, and especially temporary jobs in the UK are hardly related to training. But countries that do offer more temporary jobs linked to training have problems maintaining these jobs. For example, in Germany, which has a long tradition of temporary jobs linked to training (apprenticeships), the number of available apprenticeship positions is decreasing and many employers are not able to offer jobs to all employees, who successfully finish the apprenticeship.

Altogether, the interested reader will find this well-written and reasonably brief book worth reading, although she or he might be surprised by the authors’ final conclusion. It offers a deep insight into flexible forms of employment in Britain and shows that the issues of flexible employment are more complex, and detailed solutions are more difficult than they are sometimes discussed in public.