Abstract
In their edited volume Working in the Context of Austerity, Donna Baines and Ian Cunningham elucidate the changes that have occurred under austerity regimes. The book’s 16 chapters were written by 27 contributors from the United Kingdom, the United States, Canada, Ireland and the Netherlands. The book is divided into four parts: I. Introduction, II. Trends and Themes, III. Case Studies of Austerity in Private, Public and Non-Profit Sectors, and IV. Alternatives and Resistance. The last part includes an ‘afterword’ serving as an overall conclusion to the book. While the book’s Canadian/UK editors focus largely on the so-called ‘Anglo-Saxon’ countries, it also explores working under austerity in Berlin, as well as in China. One of the highlights of the book concerns ‘trends in collective bargaining’, elaborating on recent changes in collective bargaining in the European Union and North America.
Commonly, austerity is portrayed as an array of ideological, political and economic policies aimed at reducing a country’s budget deficit. This is supposed to be achieved through harsh spending cuts and tax increases – which tend to fall on the working class rather than the rich – or a combination of the two. Austerity policy has a negative impact on the world of work. Despite the warnings of, among others, former World Bank chief economist and Nobel Memorial Prize winner Joseph Stiglitz, austerity tends to be implemented relentlessly, despite the fact that, as Stiglitz notes, ‘no large economy has ever recovered from an economic downturn through austerity’ (p. 3).
The ‘initial government responses [to the financial crisis] in 2008–09 were stimulus packages’ (p. 4), overshadowed by an implicit ‘too big to go to jail’ dogma (Grassley and Brown, 2013). Rescuing insolvent banks is one thing, but letting the bankers and other financial actors who caused the crisis get off scot-free is another. The bankers whose actions resulted in the global financial crisis (GFC) were not held to account. Instead, they were rescued and indeed rewarded (Story and Dash, 2009), while almost all the major financial institutions were kept in business. The governments responsible for this misplaced ‘justice’ then tended to introduce three policies: spending cuts in public services; downsizing, privatisation and marketisation of the public sector; and lowering the cost of public services through ‘wage caps and cuts’ (p. 4).
This had a flow-on effect from government jobs to the private sector, and generally not to the latter’s advantage. Most interestingly, ‘the proportion of employees in permanent jobs has increased’ (p. 5) in many OECD countries. This development did not alter the trend towards short-term tenure, however, as ‘job stability (the length of time individuals spend in their current job) decreased’ (p. 7). Much of what has happened since the global financial crisis can be seen as part and parcel of neoliberalism’s attack on three core themes of post-war economics (p. 8): rolling back so-called ‘Keynesian’ stimulus packages; promoting the transfer of blame, ‘shifting from the private sector that caused the crisis to the public sector, and from the public sector to the populace’; and finally, implementing austerity, whose attached ideology went through a three-stage process: anticipation, adaptation and acceptance.
To ensure that all three stages prevailed, a thoroughly ideological programme was pursued to shift blame away from capital and towards workers. Throughout this process neoliberalism and austerity became ever more dependent on the only transmission mechanism capable of overcoming all obstacles, the media (Smythe, 1977; Fuchs, 2014, 2020). It is the media that can establish toleration of the widening of ‘existing inequality’ (p. 9). For example, the media has relentlessly pushed ‘a narrative of crisis and public sector excesses’ (p. 10). Indeed, over time the ideology of austerity became even ‘more aggressive and hegemonic than in earlier phases of neoliberalism’ (p. 15).
Most importantly, in Media control: the spectacular achievements of propaganda (Chomsky, 1991) Chomsky described ‘a shift towards identifying the global financial crisis as a public sector debt crisis [while also] blaming trade unions’ (p. 16). In this context, ‘austerity [is not only] a continuation of an established neoliberal ideology’ (p. 18), but it turbocharges neoliberal ideology. The ideology of austerity had to be strong enough to disguise four essential pathologies (p. 30): since 1979 at least, real wages have stopped growing for most workers; the risk of injury and illness, unemployment and old age are increasingly borne by workers; many employers have abandoned their role in training workers; and finally, unions are viewed as toxic by corporate apparatchiks, the media and pro-business think tanks.
Camouflaging Adam Smith’s invisible hand, this shows ‘the visible hand of social actors’ (p. 32) at work. Inside the state, private companies and corporations, ‘workers are generally considered profit-limiting liabilities rather than profit-boosting assets’ (p. 34). Joining capital’s choirs are ‘right-wing organisations funded largely by the Koch brothers [and, of course] McKinsey and the Boston Consulting Group’ (p. 35).
Their advocacy ensures the acceptance of ‘middle-class employment insecurity anxiety [and] income stress [that is, fears about one’s ability to] keep up with the bills’ (p. 42). Ultimately, ‘austerity is…concerned with offloading costs…making others pay’ (p. 49). Economists call this an externality. Seen from the standpoint of managerialism (Klikauer, 2013), this means ‘selective formalisation…[in other words] a set of business practices that formalises’ the employment relationship with an emphasis on creating ‘conditions of informality’ (p. 51). This enhances the power of management while adhering to the first rule of managerialism: when things go wrong, workers are to blame; when things go right, management takes the credit.
Simultaneously, the ideology ‘disempowers workers [in other words, affects those] who are expected to carry [much of] the administrative, fiscal, and legal burdens’ (p. 51). In turn, this leads to ‘psycho-social violence’ at work (p. 51). Psycho-social violence of this kind is perpetrated by such means as ‘isolating people, manipulating reputations, withholding information, assigning tasks that do not match capabilities and assigning impossible goals and deadlines’ (p. 51). For that to work, managers do not need to be corporate psychopaths (Klikauer, 2018). Ordinary managerial nastiness (Schrijvers, 2004) is enough. Beyond the ‘structural domination [of management, the market system also] provides a primary mechanism for worker discipline’ (p. 51). Hence, neoliberalism and austerity advocate the market – the great arbiter of all things.
Almost self-evidently, ‘austerity persuades as an ideological frame [in which the] sacrificial labour [force] pulls itself up by its own bootstraps in the hope that hard work and risk taking will pay off’ (p. 52). The hard-work ideology is propagated by those who do not themselves work particularly hard, but who are willing to impose ‘punitive working conditions’ for others (p. 57; Sims, 2020). Beyond that, another effect of austerity was that the EU’s ‘Troika [limited wages to] a 9% maximum increase in unit labour costs within a period of three years’ (p. 73). Limiting wages came at a time when collective bargaining coverage was declining in the EU (p. 74).
The propagandistic achievements of neoliberalism and austerity also added to the widely concocted ‘hostility to unionism [as] collective bargaining became the focus of much of the blame for the financial problems of states and individual cities…public sector workers were also portrayed as lazy and privileged’ (p. 81). This masked the fact that the bailouts of those who had caused the global financial crisis were funded by the state. This came at the expense of other state responsibilities. This shortfall led to a further round of blame-shifting to legitimise ‘three earnings-related trends’ (p. 85): constant low nominal wage growth; widespread growth in wage inequalities; and declines or very limited rises in real wages.
In the United Kingdom, for example, ‘real wages in 2019 were 5% below their 2008 levels’ (p. 87), a trend that Brexit will only worsen. Brexit, neoliberalism and austerity will also heighten the trend towards privatisation. In the care sector, for example, privatisation has taken on seven forms (pp. 99–105): ownership: the traditional form of privatisation; cost-shifting: families pay for private care workers; stealth cuts: the shrinking of public capacity to fund care; management: non-profit management behaves like for-profit management; responsibility: shifting towards unpaid care workers and families; decision-making: decisions taken behind closed doors legitimised as ‘corporate confidentiality’; services: care for those who can pay to access needed ‘extras’.
In the fast-food industry there is a long history of aggressive anti-unionism: ‘head-offices of fast-food corporations widely pursue the carrot strategy to counter unions: they promise to improve pay and working conditions in anti-union meetings and sometimes even hold employee parties to win over staff. If the carrot does not succeed, then the stick is employed: sympathisers are harassed and intimidated. They have their hours shortened or denied, they have their shifts changed to times when they cannot work, and/or they are given unpleasant duties to fulfil’ (p. 118).
Such strategies are often paired with two ideologies: ‘efficiency gains’ (p. 152) and doing ‘more with less’ (p. 152). Needless to say, these two ideologies are never applied to CEOs (Clifford, 2017). For workers, it all too often means ‘austerity-related downsizing’ (p. 154), ‘restructuring’, which can lead to ‘7% of job losses’ (p. 154), and ‘an increase in managerial scrutiny’ (p. 161), also known as aggressive micro-management (Nogushi, 2017). Micro-managerial control is exercised ‘through bureaucratic procedures and intensified’ (p. 162) work arrangements, as well as the infamous KPIs or ‘key performance indicators’. As one worker said, ‘we’re a slave to the KPIs’ (p. 162).
It also means ‘getting e-mails about missed paperwork and…not ticking a box’ (p. 164; Sims, 2020). Meanwhile, a Scottish fire fighter said we ‘do not have enough bodies…to do the job’, leading to a question no fire fighter should ever ask, ‘will I take the risk?’ (p. 165). In other words, austerity creates a ‘strong incentive to reduce costs as far as possible’ (p. 173), even when this means that people will die.
In many countries, austerity has shown that it ‘disproportionally impacts on the most disadvantaged and vulnerable’ (p. 176). When the COVID-19 pandemic hit in 2020, it was entering countries with already debilitated ‘human-service programmes’ (p. 197). Such programmes still accounted for 5.1 per cent of GDP in the 1980s, when neoliberalism took off; by 2019, however, their share was ‘less than 3%’ (p. 197). It is hard to save lives when human-service programmes have been reduced by 41 per cent.
Undeterred, austerity advocates promote ‘lean and mean management, increased productivity [and an] intensification of organisational control’ (p. 198). This leads to what Siegrist calls ‘effort-reward imbalance’ (p. 208; Siegrist and Morten, 2016), which is a ‘mismatch between high workload (high demand) and low control over long-term rewards’ (p. 208). This becomes even more severe as austerity’s ‘on-going race to the bottom on pay’ continues (p. 243). This race is ideologically-framed as the ‘freeing up of labour markets’ (p. 261). In reality, this means ‘minimum commitment from the employer demanding maximum flexibility from employees. You can see that this is a one-way system [advantaging] the employer’ (p. 270).
Set against all this is ‘union activism framed as a moral project’ (p. 293). Linking unions to morality is ‘appealing to workers and [it makes it] more difficult to attack or discredit the union’ (p. 293). Yet unions are locked into a two-against-one battle, with trade unions on the one side, and capital and corporate media on the other side. As a consequence of capital-media’s combined power, trade unions have been on the losing side for decades. Hence, ‘trade union membership in OECD countries has dropped by 16%’ (p. 303).
Austerity will further this decline. In the ‘period since 2010, when Austerity mania took over government policies fuelled by Media calls to balance the books’ (p. 321), the capital-media alliance has been a winning ticket. What is to be done? Perhaps the much acclaimed ‘universal basic income’ (p. 328) will offer relief. Yet, the universal basic income remains a system-stabilising instrument that, if introduced, will only sustain capitalism. In the end, Frederic Jameson’s dictum (2003) remains valid: ‘It has become easier to imagine the end of the world than the end of capitalism.’