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Institut Arbeit und Technik

Wissenschaftszentrum Nordrhein-Westfalen. Wuppertal Institut für Klima, Umwelt, Energie. Kulturwissenschaftliches Institut. Institut Arbeit und Technik. Gerhard Bosch The standard Employment Relationship and Life Long Learning Melbourne, 19 July 2004 Prof. Dr. Gerhard Bosch

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Institut Arbeit und Technik

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  1. Wissenschaftszentrum Nordrhein-Westfalen Wuppertal Institut für Klima, Umwelt, Energie Kulturwissenschaftliches Institut Institut Arbeit und Technik Gerhard Bosch The standard Employment Relationship and Life Long Learning Melbourne, 19 July 2004 Prof. Dr. Gerhard Bosch Institut Arbeit und Technik, Munscheidstr. 14, D - 45886 Gelsenkirchen Tel: +49 209/1707147, Fax: +49 209/1707124, email: bosch@iatge.de Institut Arbeit und Technik Gerhard Bosch

  2. Structure of the Presentation 1 2 3 4 The Future of the Standard Employment Relationship The Human Capital Paradox Barriers to lifelong learning Conclusion Gerhard Bosch

  3. 1.1 The debate on the traditional standard employment relationship (SER) Predominant notions (Castells, Beck, Carnoy etc) • Employment relationship of full-time permanent core workers is breaking up in favour of a diversity of non-standard atypical forms of work • SER is replaced by “Human Capital Portfolios” (Carnoy et al. 1997) • Reasons for the erosion of the SER: new technologies, globalisation, deregulation, individualization Assumption: • SER has declined in importance • SER will decline further in importance Gerhard Bosch

  4. 1.2 The Future of the Standard Employment Relationship Question: Is the old SER eroding and are there opportunities for shaping a new SER? Gerhard Bosch

  5. 1.3 Definition of SER SER is the result of a partly de-commodification of work (Briefs,Polyani, Esping-Andersen, Offe) • Workers as commodities can be easily destroyed by even minor contingencies like illness • Social protection creates buffers between the market and employment relationship • SER (1) guarantees workers income when they do not work (holidays, illness, accidents, economic crisis), (2) establishes long term relationships, (3) regulates working conditions • De-commodification by law or collective agreements • We have to differentiate between the form (“Permanent full-time”) and the substance of the SER (De-commodification). • The form can change without erosion of the substance • If there is no employment protection and welfare state it makes no sense to speak of SER Conclusion: Gerhard Bosch

  6. 1.4 Functions of SER • For the employee: welfare and security • For the companies: workers cooperation – returns on investment in human capital • For the society: reduction in inequality, formation of human capital General functions Specific functions of full-time work: • For the employee: family wage • For the companies: standard working hours on which work organization was based Conclusion: Specific functions may change – depending on family structure and work organization Gerhard Bosch

  7. 1.6 No erosion of permanent employment relationship Average employment tenure change 2000 1992 12 10 8 +6,4% +1,9% +1,6% +2,1% 6 4 -1,9% -1,5% 2 0 Germany Japan* United Kingdom United States* EU (14)without Austria Average * Data refer to 1998 instead of 2000 Source: Auer,P., Cazes, S. : Employment Stability in an Age of Flexibility, ILO, 2002 Gerhard Bosch

  8. 1.7 Fastest growing new form of work is part-time • Polarization between part-time and full-time and inner erosion of the SER in UK • Convergence between part-time and full-time (DK) DifferentDevelopments Gerhard Bosch

  9. 1.8 Distribution of normal weekly working hoursfor dependent employees, United Kingdom (1989, 1999) Men Women % % 30 30 25 25 20 20 15 15 10 10 5 5 0 0 42 46 39 40 41 43 44 45 47 48 37 38 36 47 44 45 46 48 36 37 38 39 40 41 42 43 1-9 1-9 49+ 49+ 10-14 20-24 25-29 20-24 25-29 15-19 30-35 10-14 15-19 30-35 hours hours Employees (%)1989 Employees (%)1999 Source: European labour force survey, Calculations: S. Schief, Institut Arbeit und Technik Gerhard Bosch

  10. 1.9 Other findings • Assumption that new forms of work are flexible and full time work is inflexible is not correct • Major changes take place within the old SER (new forms of control by marketising, longer and unpredictable working hours, work intensification) • Inner erosion of SER is more important than quantitative decline • New forms of work are in some countries de-commodified – belong to SER Gerhard Bosch

  11. 1.10 Causes of Change 1 Flexibilisation of product markets • Work organization is not any longer based on standard working hours • Growing interest of companies in long term relationships with skilled workers 2 Rising employment rate of women • Probably no need for family wages any longer • Employment forms depend on childcare provisions, tax systems, regulation of part-time, wage differences between men and women Gerhard Bosch

  12. 1.10 Causes of Change 3 Combination between education/training and work • Rising demand for part-time jobs from pupils and students • Also of adults in periods of further training 4 Rising educational attainment • Increasing demand for full-time jobs 5 Regulation and deregulation • Deregulation: re-commodification • Regulatory gap between different forms of work: might pull standards down Gerhard Bosch

  13. 1.11 Approaches to a new flexible SER (I) CONCLUSIONS (1) Deterministic theories on the erosion of the SER are not convincing. Some drivers of change lead to de-commodication, others to a new type of SER The substance of the SER (de-commodification) may be preserved, but the form (full-time work, family wage) might change The old SER with standard working hours and traditional household structures is not sustainable because of changes in society and economy Gerhard Bosch

  14. 1.12 Approaches to a new flexible SER (II) New form of SER: Flexible lifelong working hours • Main elements: • De-commodification by protection and strengthening employability • Employees driven flexibility(change from full to part-timeand vice versa, sabbaticals for childcare and training) • Integration of women into the labour market(development of public infrastructure of child-care, replacement of derived by individual entitlements in the welfare state) • Flexible work organisation: based on a high functional and numerical flexibility of employees in the SER • LLL: Guaranteeing Employability Gerhard Bosch

  15. 4 Approaches to a new flexible SER (III) Functions of the new SER: For the EMPLOYEES: • Welfare • Security • Employability • Reconciliation of work and family life (for men and women) For the COMPANIES: • Workers co-operation • Returns on investment in human capital • Flexible work organization (instead of hire and fire) For the SOCIETY: • Reduction in inequality • Formation and Use of human capital • Use of human capital of men and women Gerhard Bosch

  16. 1.13 Approaches to a new flexible SER (VI) Important questions not answered in my paper 1. Are there different types of SER in countries with different balances between security and flexibility 2. Meaning of the notion “European Social Model” 3. Limits to de-commodification in a globalized economy 4. Costs decommodification 5. Forms of de-commodification (law, collective agreements, centralized – decentralized) Gerhard Bosch

  17. 2.1 1st Trend: Investments in intangibles are becoming more important than investments in tangibles Old technologies require more investments in tangibles (railroadification). The new more knowledge-based technologies require more investment in intangibles. The relation between the stock of investments in tangibles and intangibles changed from 2 to 1 in the 20's to 1 to 1 in the 90's. Fig. 1 Figure 1: US Capital Stocks Billions of Dollars 6075 1929 (structures and equipment, inventories, material resources) tangible 3251 non-tangible (education and training, health and safety mobility, R&D) 8120 1948 5940 17490 1973 17349 28525 1990 32819 Source: Abramovitz, M., David, P. 1996: Employment and Growth in the Knowledge-based Economy. OECD Gerhard Bosch

  18. 86,4 78,2 76,1 65 63,5 43,1 Men women middlel low high Source: EU Labour Force survey 2002 2.2 2nd trend Education is getting more and more the entry ticket into the labour market Employment rate by skill level in Germany ( 2002) Gerhard Bosch

  19. 2.3 The Human-Capital-Paradox • Higher individual returns in countries with deregulated labour markets (returns on additional year of schooling in Scandinavia 4% and in UK 12%) • Neoclassical explanation: more effective pay scales which reflect productivity differences more closely in deregulated markets • Alternative explanations: underinvestment in training in deregulated economies, more polarised skill structures and skill shortages • Human-capital-paradox: in spite of high monetary incentives for investments due to high income inequality low investment of low skilled Fig. 4 Explanation of the paradox: • high investment risk because of high dispersion of returns • long working hours of low skilled • low incomes and saving rates • tayloristic work organization • lack of formal pathways for low skilled • high social distance Gerhard Bosch

  20. 2.4: 3rd Trend: Income structure corresponds to skill structure Educational levels in West Germany and the USA, 1989 45 High school 16 30 College, Associate Degree Vocational training 69 17 Bachelor's degree 7 USA 8 Master or higher Germany 8 Source: Freeman, R.B., Schettkat, R. (1998): Low Wages Services: interpreting the US-German difference. Paper to the LOWER Conference Groningen. The Netherlands. Nov. 19-21 Gerhard Bosch

  21. Market failure Lack of time and money Lack of pathways for individuals and companies Traditional work organisation Low involvement of social partners 3. 1 Barriers to LLL Gerhard Bosch

  22. 3. Removing barriers lifelong learning 3.2 Market failure : Internalise training-incentives in markets Incentives could be: A. In the product market: Prevailing wage laws Innovation policy Minimum training requirements for participation in bidding Licensing (such as for doctors, pilots or electricians) Quality standards for products and services (as in the German construction industry) B. In the labour market: Safety or liability regulations Employment protection which establishes long term relations between employer and employee create incentives for training (job tenure is increasing in most countries) Avoiding free rider problem by introducing a levy (as in the Danish apprenticeship system) Health and safety regulations Ex. Gas Gerhard Bosch

  23. Apprenticeship Training Rates and Prevailing Wage Laws by State Legal Policy * * Apprentices as a percent of journeymen. 4,3% 3,8% 2,8% 2,1% Repeal States States States that Repeal States before repeal retaining law never had law after repeal Source: P. Philips: The US: A tale of two cities. In: G. Bosch / P. Philips: Building chaos (Eds.): an international comparison of deregulation in the construction industry. London: Routledge, 2003 Gerhard Bosch

  24. 3. Removing barriers lifelong learning 3.3 Lack of Time and Money: SOLUTIONS • Entitlements for sabbaticals as in Sweden • Grants for further education as in Sweden • Saving accounts for life-long learning with subsidies of the state, own contributions and contributions of companies (Problems: taxation, property rights, bankruptcy, use: training vs. early retirement) Gerhard Bosch

  25. 3. Removing barriers lifelong learning 3.4 Pathways for individuals and companies Major problem: Intransparency of training market • makes the fit between training and work organisation for companies difficult (high transaction costs) • High search costs • No economies of scale in developing curricula • Generally or broadly recognised certificates • Certification and quality assurance of providers Possible solutions Conclusion:Both solutions have to be linked. Gerhard Bosch

  26. Training Pathways in the German IT-Industry Strategic Professionals Master of Engineering Certified IT Business Engineer Certified IT Technical Engineer Operational Professionals Certified IT Marketing Manager Certified IT Systems Manager Certified IT Business Manager Certified IT Business Consultant Bachelor of Engineering Specialists 29 Specialist profiles for 6 IT sections: Software Developer, Solutions Developer, Administrator, Co-ordinator, Technician, Advisor Vocational Training IT System Electrician IT System integration Specialist IT System Support Officer IT System Officer Source: http://kib-net.de, 2003 Gerhard Bosch

  27. 3. Removing barriers lifelong learning 3.5 Work Organisation (1): Exclusion of the low skilled from learning Tayloristic model of firms • Complex organisation and simple jobs. • complexity of the organisation is grounded in the radical split between "thinking" and "doing" • The organisational memory is based on formal procedures, strong hierarchies and a professional elite at the top of the firm. • The low skilled are excluded from formal and informal learning Model of flexible firm • Flexibility by the reintegration of tasks and teamwork • reduction in organisational complexity: coordination and communication at lower levels of the organisation • This organisation should be on continuous learning (or on rotation) Gerhard Bosch

  28. 3. Removing barriers lifelong learning 3.5 Work Organisation (2): Crucial role of work organisation • Productivity increases only if knowledge is actually used • Motivation to learn often comes from work experience • Important for low skilled: Changes in work organization (job enrichment/enlargement, rotation) make it possible to learn step by step • Research of the European Foundation shows that traditional forms of work organization still dominate in EU • Some countries are far ahead in introducing post-tayloristic forms of work organization (S, DK, FIN, NL) • Even in modernized companies the peripheral workers are often excluded from learning PROBLEMS: Gerhard Bosch

  29. 3. Removing barriers lifelong learning 3.5 Work Organisation (3): CONCLUSIONS • The state and the social partners should promote decentralized forms of work organization • Promotion of training for peripheral workers • Good example: France increased the training levy for temporary and agency workers from 1,5 to 2% of the gross wage bill Employees who have received training over the past 12 months (by contract) 35 34 31 23 All employees Indefinite contracts Fixed-term contracts Temporary agency contracts Source: European Foundation: Third European survey on working conditions 2000 Gerhard Bosch

  30. 3. Removing barriers lifelong learning 3.6 Role of social partners Social partners can promote training by agreements on • standardized curricula and certificates (pathways) • saving accounts for training • on special programs to ”promote training for less skilled” • work organization • pay scales with incentives for learning Advantage compared to programs run by the state or the employers: • better links between theory and practice • compromise between short term business needs and promotion of employability • easier implementation on industry level PROBLEM: Unions are marginalised in some countries. Gerhard Bosch

  31. 4. CONCLUSIONS • Barriers to lifelong learning are found not only in the education and training system but also in other sub-systems of the society (work-organization, labour and product markets, industrial relations, innovation policy). • Removing barriers to learning is a crosscutting task which requires cooperation of actors from different subsystems and cannot be left only to education and training specialists. • The major challenge is to develop consistent policies in these different fields. • Expansion of lifelong learning may increase inequality and segmentation of labor markets. Gerhard Bosch

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