Informal Economy/ Informal Work: Challenges for Industrial Relations

 Industrial relations has predominantly focussed on the formal workplace and formal institutions of representation and neglected the informal economy/work. Informal work, instead of being a transitory phenomenon, has been a predominant form of work in the Global South and is increasingly prevalent in the Global North (Chang 2013; Kalleberg 2009). As work continues to reach beyond the formal workplace and into the informal economy – into the community, household and the realm of social reproduction – institutional forms of industrial relations face a challenge. While Organising and Social Movement literatures address this challenge, conceptual and methodological issues remain underexplored in industrial relations.

 

Initially conceptualised as the ‘informal sector’ (Hart 1973), since the 1990s the term ‘informal economy’ has focussed attention on a broad and heterogeneous type of employment and enterprises that are unregulated and unprotected (Portesand Castells 1989; Hussmans 2005; Agarwala 2009). The expanded definition of the informal economy sees it as segmented into a range of informal firms and employment relationships i.e. self-employed with assets and employees, survival self-employed (own account operators and unpaid family labour), wage labour, casual wage labour, domestic labour and industrial outworkers/homeworkers. As Breman (2013) puts it ‘there is not one but a variety of regimes of informal labour, not all vicious to the same extent. These also differ in coping behaviour and resilience, some segments being more successful than others’. In sum, informality has multiple levels of exploitation as well as of forms and avenues of resistance.

 

Accompanying this recognition of the permanence of the informal economy is also one that recognises its significance to capitalist development. The relationship between the formal and informal economy is seen as a continuum of economic relations of production, distribution and employment where firms and workers move along the continuum or can operate simultaneously in both (Chen 2007; Lerche 2010; Harriss-White 2010).There is a recognition of diverse socio-economic relations that can result from the interaction of the formal and informal economy.  Agarwala(2008) captures this in her relational understanding of the informal economy where informal workers are intertwined with the formal economy, society and the state through structures, networks and political institutions. Informality is now fused within formerly formal parts of the economy, through outsourcing and supply chains.

 

My research in a new industrialising region in North India shows how manufacturing firms, domestic as well as multinational, tap into and structure the informal economy. Over a span of ten years they have reduced their permanent workforce while employing three times the number of informal workers. These are segmented into contract, casual, company casual and apprentice workers and often fulfil the jobs of a full-time production worker inside the firm. In addition, firms draw upon informal workers through outsourcing and long supply chains both in the textile and the automotive sector. As in earlier industrial sociology, neighbourhood comes into the firm and the firm reaches into the neighbourhood. This blurs the boundaries between the spheres of production and reproduction when analysing control and contest. Trade unions are unable to respond to the needs of informal workers or formulate a strategy to counter the state-capital restructuring of work.

 

For industrial relations, the challenge is how to conceptualise these interlinkages between the formal-informal work/economy and how to organise disparate, dispersed and often mobile informal workplaces and workers. This requires a rethink of definitions and conceptualisation of labour, framing options, organisational forms and strategies, and types of struggles for labour in spheres of production as well as reproduction. ‘New’ questions, with long history, have arisen. Is labour a mere production input or ‘social’ labour? Is work only in the sphere of production or is it all the work that helps in capitalist accumulation? Do we need to conceptualise labour as an actor, or only as collective actor? Can, or indeed should, the informal be ‘formalised’? Why is informal economy/work so difficult to regulate? What role do inter-firm relations play in informality? Do we need to go beyond institutional forms of industrial relations? What are the methodological challenges in researching the informal economy/work?

 

One of the many ways forward is Bernstein’s (2007) ‘classes of labour’. The approach provides an analytical framework that is flexible enough to capture the diversity of employment in formal-informal economy. Another possibility is the integrated framework of social reproduction (Luxton 2006; Ferguson and McNally 2015) that captures social relations of capitalism more comprehensively. Such approaches are sensitive to varied economic survival strategies of different groups of informal workers and the diverse means of resistance.

 

A more differentiated understanding of work and labour, and links between oppression and exploitation and production and consumption may help in framing strategies to address the challenges informal economy/work poses to industrial relations and to the labour movement.

Anita Hammer is a member of CROWE at Leicester Business School, De Montfort University, UK. Her research focuses on the Global South and examines the development trajectories of new industrial regions, changing patterns of work and employment and the role of the informal economy http://www.dmu.ac.uk/work-and-development-in-the-global-south

anita

 

Resisting Labour Reforms in France

Resisting Labour Reforms in France

 

The current industrial action will test the ‘reactionary radicalism’ of French unions and the Government’s ability to introduce reforms.

Heather Connolly

On 4th November 2015, France’s labour minister, Myriam El Khomri, launched reforms designed to rewrite the labour code. France’s labour code is more than 3,500 pages long in its latest edition, plus vast amounts of supplementary case law. This fact makes it difficult for most people to make sense of and keep track of current legislation and hence to understand what is actually being reformed. Against a background marked by a high level of unemployment of around 10 per cent, and particularly high levels of youth unemployment, the two main objectives were to revise the entire labour code and to give company-level agreements a central role.

 

In a nutshell, El Khomri proposed a labour code with a new architecture resting on three tiers and centred on collective bargaining at the branch and company level. The first tier guarantees fundamental principles such as the minimum wage and working hours (the well-known 35-hour week) from which employers would not be able to depart. The second tier comprises areas open to negotiation, at branch or company level. The third tier covers the provisions applicable where there is no branch or company level agreement between employers and unions.

 

Earlier this year, on 24th March, the Council of Ministers adopted a revised version of El Khomri’s Bill. As a result of earlier protests the government has somewhat watered down the proposals to the extent that business leaders now see the law as irrelevant because the original intention – to allow small businesses to make deals directly with workers, rather than unions – has been removed in the revised version of the law. MEDEF, representing mainly large employers, was unhappy with changes introduced in the new version of the bill, while CGPME and UPA, organisations representing small and medium-sized enterprises (SMEs), felt disadvantaged by new rules that offer greater flexibility to large companies than to SMEs through social dialogue. On the union side, the reformist unions (CFDT, CFTC, CFE-CGC, UNSA) noted improvements that brought the proposed changes more in line with their preferences. But other unions (CGT, FO, SUD) and student organisations have continued to demand the withdrawal of the proposals. Nevertheless, the government has presented the bill to parliament for debate with a view to its adoption in summer.

 

As France experiences more industrial action this month, notably during the run up to Euro 2016, it is important to reflect on what the labour reforms signify and why the new law has caused such widespread action and disruption. The new law was intended to start the same process that has long been under way in France’s neighbours, notably Germany and the UK, loosening up the labour market and reducing employee protection, but in turn creating new jobs. France is often accused of failing to adapt to the realities of globalisation and to hampering job creation and growth by having such ‘rigid’ labour protections.

 

However, job creation is held up as being the Holy Grail to achieving growth, but with little attention paid to the types of jobs that would be created as a result of loosening up the labour market and the ((un)intended) social costs that creating more precarious jobs has on society more widely. The UK is hardly a model that France would want to follow, considering the high levels of income inequality and the proliferation of precarious work in the form of zero-hours contracts, for example. Is Germany the model to follow, again with its (often underestimated) high levels of income inequality and low-paying service sector jobs? Indeed it was only in 2014 that Germany introduced a minimum wage to redress the high disparity in incomes and precariousness in parts of the labour market, particularly in the service sector. There are of course social costs attached to high levels of unemployment and particularly for young workers who find it difficult to enter the core of permanent, protected workers. The question is whether the answer is to make everyone more precarious.

 

Trade union radicalism and mobilisation has been a significant feature of the labour movement in France. While in general there has been a decline of strikes in France, there has been a persistence of resistance and protest. However, most of the current protests are about demands to open up negotiation and social dialogue rather than more radical demands. Recently, the usual suspects in transport have been at the centre of strikes and mobilisations against labour reforms, including a railways strike lasting 10 days from 1st June and workers on the underground beginning an open-ended strike on 10th June. The three main unions representing rail workers – the more radical CGT, UNSA and SUD-rail – have engaged in several bouts of strike action and encouraged open-ended strikes. The CFDT union has cancelled some more recent calls to strike after succeeding in gaining guarantees from the government. The motivation for the most recent walk-out is in part due to opposition to France’s labour reforms – however rail workers have also organised the strike to put pressure on SNCF bosses as negotiations continue over their pay, working conditions and working hours.

 

Over the last fifteen years, France has introduced radical changes into its labour law. The latest reform is thus one more component of this protracted process of reform. It takes even further the liberal rationale of greater flexibility in the labour market which, in the view of some trade union and student organisations, is not offset by the provision of increased security for workers.

 

French union activists have been described as ‘reactionary radicals’ – reactionary because union activists are attempting to prevent a change from taking place, and radical because they aspire to a type of far-reaching change that would foster a balance of power more favourable to labour, neutralise the neo-liberal project, and allow for the continuation of the sociocultural world of public sector workers.

 

However, much of the protests and strikes since the onset of the economic crisis in 2008 have been guided by a defensive rather than offensive agenda centred on the defence of employment benefits, the acquis sociaux (acquired rights), and the status quo. The most recent strikes reflect not only continuity of reactionary radicalism and defending hard-won rights, but an expression of the relationship of subordination between workers and their employers and the shift in the balance of power towards employers, which has notably taken place under a Socialist government.

 

The current strikes are therefore a test of strength for the French trade union movement and their ability to resist reforms. Similarly, the reforms are also a test for the French government. The outcomes arising from the industrial action will be watched closely by employers, big and small, and will demonstrate the government’s commitment to reform of the labour laws.

 

Heather-Connolly-100

Heather Connolly is Senior Lecturer in Leicester Business School at De Montfort University and a member of the Contemporary Research on Organisations, Work and Employment (CROWE) group and the Centre for Urban Research on Austerity (CURA).

This post was originally posted on the SPERI blog, University of Sheffield.