The flexibility fraud

Flexibility is one of the employers' favourite buzz-words. The house journal of the Department of Employment, Employment Gazette, is full of articles about the rejuvenating effect which flexible working can have on industry. Flexibility is put forward as the solution to corporate ills - and it's easy to see why.

Flexibility agreements caught on in the 1980s. Although different in name, their effect has been the same as old-fashioned productivity deals. Both 'rejuvenate' industry through imposing redundancies, harsher working conditions and lower real pay levels on the workforce. The employer benefits from either productivity or flexibility deals, because he gets a 'leaner and fitter' workforce, and a smaller wage bill relative to output.

However, there is one big difference between the two. Productivity deals were usually seen for what they were - an attack on working conditions and wages, pushed through for the benefit of the employers. Flexibility deals, on the other hand, are promoted as something which helps both the employer and the employee.

Whenever flexibility is mentioned, it tends to be coupled with 'and choice' or 'and control'. Working flexibly is supposed to give you more choice about how to divide your time between work and other things during the day. You are meant to have more control over your life, and to be freed from the conventional nine-to-five straitjacket. Instead of being forced to fit in with management's schedule, flexible working is supposed to give you more scope to decide for yourself when and how you want to work.

If this description of the world of work today doesn't quite correspond with your experience, then read on. Reality for most of us has been very different. Diminishing job security and lower real pay levels are the true characteristics of the 'flexible' nineties.

There are more and more reports of workers having to make a choice between accepting either redundancy or wage cuts. The Citizens Advice Bureau report, Job Insecurity, published in March 1993, noted that, when faced with dismissal, workers were willing to accept the previously unacceptable. Some were taking wage cuts of up to 35 per cent and were working 70 hours a week for £140. Many more are accepting pay cuts of up to 10 per cent.

Choice and control don't come into it. From start to finish the discussion of flexibility has been dominated by double-speak. A serious case of fraud has been perpetrated, at our expense.

The 'flexible firm' was first conceptualised by industrial relations academics during the early 1980s, and was closely linked with the Institute of Manpower Studies. It was presented as an attempt to deal with problems of low output and poor productivity by reorganising the workforce. The idea was to employ people along lines which would allow the company to adapt to the expansion and contraction of the market most effectively - in practice, to hire and fire at will.

In theory, the 'flexible firm' model consists of a core workforce surrounded by a periphery. The core is made up of skilled full-time workers in secure employment. The periphery comprises more flexible, lower-skilled workers; part-timers, homeworkers, subcontractors. The idea is that the core workforce remains relatively stable, while the periphery expands or contracts depending upon the state of the market.

The model firm generated much enthusiasm and was seen as a breakthrough in employment practices. Yet strangely enough it was never implemented. The Income Data Services (IDS) survey reported in 1986 that with a handful of exceptions the process of achieving full-scale flexibility had hardly begun. By 1988, the IDS had to concede that the much-vaunted 'flexible firm' model had turned out to be 'a tool with which to analyse a wide variety of changes in employment practice rather than a description of a real firm'.

Even in theory, the model is bad enough. It sets out the principle that the 'periphery' workforce has to take whatever it is given. These workers are to be employed only on the understanding that their jobs will disappear with the slightest shift in the market. The real flaw with the model, however, is the idea of a 'core' workforce. This element of the flexible firm never got off the drawing-board. In reality, flexibility agreements have not created a core workforce. Most agreements contain some pledge on job security, but the fragility of the promise is increasingly transparent.

The theory of the core workforce has not been put into practice because stagnant British capitalism cannot measure up to the model of industrial regeneration. In fact, the process of introducing flexibility has been a brutally straightforward cost-cutting exercise, involving redundancies and harsher working practices.

As early as 1982 Sir Alan Cadbury indicated what the employers were really after from flexible working: 'a blurring of traditional distinctions between full and part-time work, being in and out of employment, between work, leisure and education, between the formal and informal economies'. In this sense the 'flexible firm' has been a success story. Today the reality of employment for many people is what Cadbury dreamed of - no stable job, take what you're given. As the Guardian has pointed out, the concept of a job for life 'is being abandoned all over the world'.

What exists today is an entirely flexible workforce, with no core but a lot of periphery. The 'flexible firm' model may not have been implemented in its own terms, but there have certainly been far-reaching changes. Today most of the British workforce works flexibly in one way or another; last year the Employment Gazette put the figure as high as 75 per cent of all employees. The reasons why have nothing to do with empowering the workforce, but everything to do with giving more control to management.

Exploiting insecurity

Even before the latest recession began, the Employment Gazette reported that the problems facing British business had 'increased the demand for flexible working practices'. It noted approvingly that the introduction of workplace flexibility 'has been facilitated by the improved industrial relations climate of the 1980s' (August 1989). In other words, the defeat of the labour movement in the eighties improved the employers' prospects of getting their workforces to work harder for less money.

Management have sought to take full advantage of that opportunity during the economic slump, exploiting the insecurity of their employees in order to force through punitive changes in working practices, in the name of flexible working.

The employers use a lot of jargon to sanitise the process of introducing low-pay, low-security jobs. They say, for example, that they have increased numerical flexibility. The Department of Employment calls this 'adjustment in the amount of labour used'. Nine out of every 10 changes in manning since 1980, it says, have been made in order to increase 'numerical flexibility' - reducing the number of people employed or reducing the hours they work, in order to save on the wage bill.

What this means is that the number of full-time jobs has been slashed and the number of part-time jobs increased. The changes imposed on the workforce at the Burton Group are typical.

Earlier this year Burton sacked 1200 full-time workers and created 3000 part-time jobs. The staff are scheduled to work an entirely flexible week of up to 39 hours. In practice the hours worked by much of the workforce are reduced - so wages are cut. Meal and tea breaks are now unpaid.

Part-time employment is by far the most prevalent form of flexible working. More and more people, especially women, now work part-time, for less than 16 hours a week. It is easy to see why the employers like to use part-time labour. Part-time pay rates are generally lower, and part-timers have far fewer rights at work. They are much easier and cheaper to hire and fire. In Britain today a third of all workers have no protection at all. Homeworking, jobshares and subcontracting are also on the increase, for similar reasons.

The employers also talk about increasing functional flexibility, which also allows for a reduction in the numbers employed. Functional flexibility usually involves cutting the workforce and getting the remaining workers to do other people's jobs as well as their own. Employers can increase an employee's workload for the same amount of money, or end job demarcation and compel a worker to do tasks they were not employed to do.

No basic pay

In many companies, functional flexibility has been introduced via the mechanism of skill-based pay. Rates of pay are determined according to the skills the employee acquires. The more skilled staff are paid higher wages, but carry out more than one job. The main advantage of skill-based pay identified by employers is the ability to operate with a smaller workforce, so that the overall wage bill falls.

Then there is the concept of earnings flexibility, which results from the increase in numerical flexibility. This means that the employer can cut workers' wages. For example, something called zero-hour contracts are the new trend in the retail business. Allied Home Furnishings employ 16 per cent of their workforce on this basis. The employer is under no obligation to pay out even one penny in wages. Zero-hour workers work only if the shop hits a busy period; during other times they wait for the call and earn nothing. The Allied bosses have no basic wage bill to pay. With this kind of flexibility in vogue, it is little wonder that the Independent has called the current situation 'the realisation of the Thatcherite dream - that wages should be flexible both up and down' (14 April 1993).

Other flexible mechanisms are also used to keep wages down. Profit-related pay (PRP) deals are on the increase. According to the IDS, the number of employees in Britain in PRP schemes leapt from 370 000 in September 1991 to three quarters of a million by the end of last year.

Under these schemes around 20 per cent of employees' pay is linked to company profits; that is, basic pay is cut by 20 per cent and replaced by the promise of profit-related bonuses. This is used as an alternative to pay rises, but in the middle of a slump it is a bum deal. As profits have plunged for most companies, so PRP pay-outs to workers have fallen with them. Last year, for example, there was no pay-out at all at Barclays, General Accident and Midland Bank. In effect, PRP has meant a sizeable pay cut.

More broadly, in the era of flexible working, pay cuts and wage freezes are now commonplace. There is a significant rise in the number of pay deals worth less than two per cent. The public sector pay rise of just 1.5 per cent is the most significant, since it covers 20 per cent of all workers in the country. There has been a general fall in the level of pay deals this year. In the first half of 1993, three-quarters of all pay settlements were between two and 4.9 per cent.

100 per cent attitude

Being flexible - that is, willing to bend over backwards - is now widely seen as a prerequisite for being employed at all. Many companies at the forefront of bringing in flexible working undertake strenuous testing of job applicants, in order to establish that they have constructive attitudes as much as skills aptitude. For instance, Sony management has been quoted as saying that 'if it's a choice, we'll go for 90 per cent skill and 100 per cent attitude'.

If you are prepared to do whatever they tell you and earn whatever they give you, you might just get the job. Then you can enjoy the benefits of functional flexibility and earnings flexibility, at least until the next round of numerical flexibility catches up with you.

The best of both worlds for women?

The 'feminisation' of the workforce is one of the most commented-upon consequences of flexible working. Over 70 per cent of women of working age now have a job, making up nearly half the total workforce. The fact that more women work is often used to suggest that the dark days of being chained to the kitchen sink are over. Equality has finally arrived.

Not only are more women working, we're told, but they are working on women's terms. In the past women were forced to make a choice between a career or a family. Now things are supposed to be different. According to a Department of Employment (DOE) pamphlet, The Best of Both Worlds, flexible employment practices today should enable women to work and have a family.

The DOE argues that employers should extend 'flexible working schemes' to allow women to return to work. They also need to
establish a 'family-friendly' environment in the workplace, to give women the confidence to come back to work. In this way, the employers could allow women to establish the right balance in their lives between work and home.

In this scenario, the 'feminisation' of the labour force becomes a policy pursued by the employers in the interests of women. In reality, it is nothing of the kind. The employers' only interest is keeping their profits up by using women as cheap labour.

It is easy to see why employers are keen to take on women workers. Women's average pay is still only 71 per cent of men's. One reason for this wage difference is the tendency for women to work part-time. According to the DOE, over 40 per cent of women work part-time and around 10 per cent of them work for 15 hours or less a week. The wage rate for employment of this kind is far lower than for full-time work.

In addition part-timers are more 'flexible'. They can be taken on and laid off more easily.
Employees who work less than 15 hours a week have no rights at all. In particular they have no right to maternity leave, which means the employers lose nothing by employing women in this way.
The DOE suggests that women choose to work part-time, which implies that they could do otherwise if they wanted to. This suggestion is highly suspect for two reasons.

First, it presumes that full-time jobs are there for the taking if women want them. The author of The Best of Both Worlds should take a trip to his local job centre and marvel at the vast array of full-time jobs available.

In fact, the rise in female part-time employment has been mirrored by the shedding of full-time male jobs. Male unemployment is at its highest since the 1930s. The ratio of male to female unemployment is even more telling. Of the 3m officially unemployed in January this year, 2.3m were men and 0.69m women -
a ratio of 3:1. This has changed significantly, even in the past few years; in 1986, the ratio was 2:1. The rationale is obvious - in a recession women are a bargain.

Second, women cannot work full-time because of domestic responsibilities - as the employers well know. The key influence on women's participation in the labour market is the need to care for their children (and increasingly, for elderly relatives). Whether or not a woman has a job varies most according to the age of the youngest child. Far fewer women with pre-school age children go to work. So you could say that women with children 'choose' to work part-time or not to work at all. Or you could say that without access to decent and affordable childcare they have no option.

Other domestic responsibilities also force women to work part-time. As women part-timers recently explained in the Employment Gazette, the responsibility for domestic work means they couldn't work full-time even if they wanted to.

'I chose part-time. I have got a house to run and the meals to get ready for them all at night-time - and mine like their dinner on the table when they come home...my sons are 18 and 24 and there is also my husband...they all get home between five and six.

'I did full-time work for three weeks. I felt guilty for leaving them (the children) and then guilty for coming home tired. I couldn't cope with it.' (May 1993) So much for women's liberation!

The DOE has turned reality on its head. Women work part-time because they are unequal to men, not because they are liberated. The prevalence of female part-time labour is a sign of the entrenchment of women's inequality, not of new-found freedoms. The fact that women's primary role in society is still considered to be as mothers and carers gives them responsibilities which tie them to the home, and deny them equality in the labour market.

It is not surprising that the government and employers get away with peddling tales of women's equality, since the opposition seems to agree with them. Harriet Harman, a member of Labour's shadow cabinet, is on their side for a start.

In her new book The Century Gap, Harman claims that there has been a revolution in women's lives. Women, she says, have arrived in the twenty-first century ahead of their time. Men, however, are still stuck in the twentieth century. The main motor for Harriet's revolution is the prevalence of part-time work. 'Employees' enthusiasm about the flexible working practices that have been introduced show that women - and a growing number of men - expect and appreciate an increasing degree of control over when they work.'

For Harman, the change to part-time work has come about because workers demanded a cut in hours. So flexibility turns out to be about choice and control in your life. The author's main desire is to encourage men to work part-time, too. They should 'liberate' themselves from work and spend more time with the children.

It seems as if Harriet Harman will get at least part of her wish. We can be certain that more men will lose full-time jobs and be left with more time to do the washing-up, while the family tries to survive on a woman's part-time pay. Perhaps she could tell those families experiencing the joys of the flexible revolution how they are supposed to pay their mortgages.

Reproduced from Living Marxism issue 59, September 1993

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