Transcript Work, employment relations and FDI in CEE countries

Alex de Ruyter
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Introduction
Globalisation, FDI and precariousness
CEE developments
Reflections and conclusions
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Globalisation
◦ Shifts in economic activity – manufacturing from
mature economies to NICs
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Realignment of production regimes
◦ Plant Closure
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Labour Market Adjustment
◦ Growth of low-wage low skill (service sector) jobs
prominent in mature economies
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Globalisation debate
◦ Take a “transformationalist” approach
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Typified by significant increases in FDI across
most countries
◦ Dunning’s O-L-I model of FDI
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Globalisation outcomes
◦ Patterns of “uneven development” (Hymer, 1975)
=> rising inequality between countries and regions
within countries
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Must consider globalisation in context of broader
changes in LM structure
Two key periods: post-WWII “golden age”:
◦ Typified in mature capitalist economies by welfare state,
commitment to “full employment” and predominance of
“standard employment relationship” (SER: Bosch, 2004)
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And then neo-liberal period (ca. 1976 - ):
◦ Deregulation, privatisation, marketisation, “inflation
first”, “austerity” => decline of SER and growth of “nonstandard” employment => re-commodification of labour
(Stanojevic, 2014)
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BUT to equate the growth of non-standard
employment with rising insecurity is to overlook:
◦ a) that not all forms of non-standard employment need
be “insecure” or of “poor quality”;
◦ b) erosion in the terms and conditions attached to the
SER itself over the past 30 years; and
◦ c) ambiguous nature of new work arrangements driven
by changes in organisational forms (Rubery et al., 2002)
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Hence, how does the concept of LM
precariousness fit in?
Dimension
Explanation
Labour market
Persistent excess labour supply; abandonment of the full employment
objective
Increasing employer prerogative; weakening of employment
protection; out-sourcing
Employment
Job
Break-down of occupational demarcation; broadening of job tasks;
contracting out
Work
Avoidance of OH&S; extending working hours; normalising hours for
weekend, evening and holiday work
Income
Growth in part-time and casual employment; development of
ambiguous employment arrangements; rise of workfare
Skill reproduction
Decline in public sector employment; demise of apprenticeships;
compression of the internal labour market; contracting out
Representation
Ambiguous and new forms of work; decline in manufacturing, utilities
and public sector; anti-union and anti-strike legislation
Source: De Ruyter and Burgess (2003; adapted from Standing, 1997)
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EU influence: Dominance of FDI-led growth
model post-socialist period
◦ Lisbon ‘Growth and Jobs’ agenda emphasized the
role of FDI, flexible labour and product markets and
low corporate taxes (Mabbett and Schelke, 2007).
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Pre-2008 crisis; prima facie success of FDI
model, with gradual convergence of CEE
states to EU averages in GDP/capita;
unemployment rates
◦ Czech Republic and Slovenia had higher GDP per
capita in PPS terms than Portugal in 2007
180
160
EU (27 countries)
Bulgaria
140
Czech Republic
120
Estonia
Ireland
100
Croatia
Latvia
80
Lithuania
Hungary
60
Poland
Romania
40
Slovenia
20
Slovakia
0
2001
2002
2003
Source: Eurostat
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: Eurostat
Seasonally adjusted. Source: Eurostat
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Increasing use of non-standard/flexible
employment
Decline in trade unions
◦ Impact of transition to capitalism and consequent
privatisation;
◦ De-legitimizing of unions – unions “acquiescing” to freemarket reforms;
◦ Pressures from MNCs to drive down employment terms
and conditions
 see Snajder-Lee and Trappman (2014) for a discussion.
◦
50
45
40
Czech Republic
35
Estonia
30
Ireland
Hungary
25
Poland
20
Slovenia
15
Slovakia
OECD average
10
5
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: http://stats.oecd.org/Index.aspx?QueryId=20167
25
EU (28 countries)
Bulgaria
20
Czech Republic
Estonia
Ireland
15
Croatia
Latvia
Lithuania
10
Hungary
Poland
Romania
5
Slovenia
Slovakia
0
2002
2003
2004
Source: Eurostat
2005
2006
2007
2008
2009
2010
2011
2012
2013
30
EU (28 countries)
25
Bulgaria
Czech Republic
Estonia
20
Ireland
Croatia
15
Latvia
Lithuania
10
Hungary
Poland
Romania
5
Slovenia
Slovakia
0
2002
2003
2004
Source: Eurostat
2005
2006
2007
2008
2009
2010
2011
2012
2013
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3 stages of post socialist development
1992 – 2004: transition period
◦ Shift to market economy and catch up prior to EU
membership; initially rising unemployment with
privatisation and exposure to international competition
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2004 – 2008: EU membership
◦ Embrace of Single Market and EU rulings; end to
protectionist measures; rising FDI and falling
unemployment
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2008 – present: post economic crisis
◦ Impact of Austerity measures limits ability to utilise
fiscal policy to counter recessions; higher unemployment
and stagnation
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Unfulfilled expectations of EU membership:
◦ failure to transfer “EU social model” has led to
disengagement and rise of populist right-wing
political parties (Meardi, 2012, cited in Stanojevic,
2014; Innes, 2012)
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Austerity
◦ Impact of EU Stability and Growth Pact with budget
deficits capped at 3% of GDP has had negative
impact on active labour market policies and social
protection programmes (Heyes 2014)
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Reform of Stability and Growth Pact
◦ End to Austerity; promotion of harmonised fiscal
policies within EU
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Shift away from market regulation
◦ A promotion of international labour standards and
voice and representation in the workplace
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Questioning an FDI-led growth model
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Rubery, J., Earnshaw, J., Marchington, M., Cooke, F. and Vincent, S. (2002) ‘Changing Organizational
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