Abstract
One of the features of contemporary societies is growing inequality and the dualization of labour markets. What are the main driving forces of these developments? This edited collection examines the contemporary ‘age of dualization’ from an analytical and comparative perspective with a particular focus on Continental European countries. Building on a number of theoretical perspectives, including dual labour market theory, the insider–outsider theory of employment and the varieties of welfare and capitalism literature, the editors argue that processes of dualization are not inevitable but the result of policy choices. Further, they stress the complementarities of different dimensions of outsiderness and insist that labour market and social policies can no longer be regarded in isolation from each other.
The individual essays examine dualization in relation to labour market disadvantages, poverty, service sector employment, migration, social policy and political parties. Silja Häusermann and Hanna Schwander analyse insider–outsider divides alongside three dimensions: the labour market, social rights and political integration. They show that these divides are less pronounced in the Scandinavian countries where a universalist welfare state softens the impact of labour market segmentation. In turn, in the Continental European and Mediterranean countries the welfare state actually reinforces labour market inequalities, especially in relation to pensions. When comparing Germany and the UK, Mark Tomlinson and Robert Walker find a rather similar level of labour market segmentation in both countries. However, in the former labour market outsiders are less likely to experience recurrent poverty in the light of a more generous welfare regime.
How do countries adapt to the challenges of a ‘post-industrial’ service economy? Werner Eichhorst and Paul Marx identify four pathways that Continental ‘Bismarckian’ welfare states can choose to create low-wage service employment: defection from permanent and full-time employment, an increase in self-employment, growing wage dispersion and government-sponsored labour cost reductions. These pathways are not mutually exclusive and often countries pursue a combination of these strategies in order to deal with the ‘cost problem’ of low-skilled service employment. One sector of the service economy which experienced considerable growth in recent years was the social services. Daniela Kroos and Karin Gottschall examine this sector with a particular focus on France and Germany. Whereas the partial retreat of the state as an employer in the sector is observable in both countries, it is more pronounced in Germany where third-sector organizations traditionally play a more important role as service provider.
Also comparing France and Germany, Bruno Palier and Kathleen Thelen show that dualization is not confined to the labour market but also involves change in the welfare state and industrial relations. Whereas a core workforce in both countries remains in relatively well-protected, often unionized jobs, there is a growing number of labour market outsiders in atypical employment who face inferior working conditions and less encompassing social protection. Such tendencies are not confined to European countries. Ito Peng observes similar developments in Japan and South Korea where governments introduced labour market reforms in the 1990s, often with the support of business and the tacit consent of unions. As in the coordinated market economies of Europe, these reforms did not herald full-scale liberalization of the political economy but rather intensified labour market and social welfare divides along gender and intergenerational lines.
Will dualization last? In the concluding chapter the editors view the continuation of dualization processes as a likely development. Not only have insider–outsider divides become firmly entrenched in recent decades, but outsiders often lack the necessary power resources to effectively campaign for political change. However, labour market dualization is not an inevitable process as ‘governments have room for political manoeuvre’ (p. 317). To transcend insider–outsider divisions, a social investment strategy in childcare, human capital, education and lifelong learning is suggested. While this sounds like an interesting proposal, it would also have been interesting to learn more about such a strategy and how it could bring about a more inclusive society.
Having said this, there is little doubt that this book is bound to become a standard reference in the field of comparative labour market and social policy research. It conclusively demonstrates that labour market inequalities have risen in the ‘age of dualization’, especially in the previously relatively egalitarian Continental European countries. If anything, the current economic crisis has further amplified labour market divisions, in particular in Southern Europe where youth unemployment has risen dramatically. Hence the debate on how to achieve a more inclusive labour market will continue inside and outside of academia. This book has made a valuable contribution to this debate. It is hoped that it will find a wide readership among students, academics and policy makers alike with an interest in labour markets, social policy and (in-)equality.