China’s traditional industrial relations system went through crisis in the 1990s and early 2000s, with the dismantling of the lifelong employment regime of the state-owned enterprises. Informality and inequality increased. The Chinese state responded to the crisis by expanding formal institutions of industrial relations and adopting macro policies designed to arrest informalization and widening income gaps. There are signs that the new industrial relations institutions are delivering marginal gains for workers. There are also signs of ‘hybrid’ representation of workers at workplaces in Southern China. However, it has been difficult to connect institutions and voice. The national system of industrial relations continues to be premised on a representational monopoly of one union. This has limited the potentially positive effect of new labour market and industrial relations institutions on labour market outcomes.
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Susan Hayter and Nicolas Pons-Vignon
Janine Berg and Eduardo Schneider
Industrial relations is as relevant in emerging economies as it is in developed economies. The chapter examines the institutionalization of employment relations in five emerging economies: Brazil, China, India, South Africa and Turkey. The analysis reveals patterns of continuity and discontinuity. Many features of industrial relations remain path-dependent despite significant changes in the economic and political context in each of these countries. Democratic transition and the incorporation of organized labour and employers expanded the influence of these actors on economic and social policy. However, the liberalization of product and service markets placed pressure on industrial relations institutions. The degree to which these institutions have been able to contribute to inclusive development depended on a balance of associational and institutional power. This determined their capacity to influence labour and social policy at a macro level and to regulate flexibility at the workplace. High degrees of unemployment and informal employment pose internal constraints on industrial relations institutions and limit their potential to contribute to inclusive outcomes. This is compounded by a deepening representational gap and the increasing heterogeneity among members of employers’ and workers’ organizations. Without a concerted effort to expand labour protection through institutions for labour relations to all those who work, industrial relations will continue to be eroded and constrained in its ability to contribute to inclusive development.
The Quest for Inclusive Development
Edited by Susan Hayter and Chang-Hee Lee
Uma Rani and Ratna Sen
India has experienced an impressive annual growth rate of nearly 7 per cent since the mid-1990s. Yet this has not led to improvements in the quality of employment and the proportion of low-paid workers has increased over the decade to 2012 along with increasing inequality. The period has also seen an increase in informalization of industrial labour in India associated with greater use of subcontracting and contractual and temporary workers. This chapter assesses the role of industrial relations institutions in improving productivity, wages and incomes for workers. At the same time, it shows that collective bargaining has remained limited in scope and restricted to the formal sector. While there have been some attempts to reach out to workers in the informal sector, these have focused on securing basic welfare rights. The chapter examines emerging labour relations institutions that are delivering improvements to informal workers. It argues that to be more inclusive, the organizational basis for collective labour relations needs to be strengthened, drawing on new forms of voice in the informal sector.
Daniel Seikel and Dorothee Spannagel
At present, in-work poverty is on the rise in many European countries. At the same time, there is a widely held political belief that employment is the best route out of poverty. Current social and labour market policies throughout Europe are characterised by a strong activation turn. National and European Union (EU)-level policy-makers focus predominantly on the promotion of active labour market policies. However, this approach does not pay attention to the circumstances of the employment the individuals have to take up. This observation serves as starting point for the chapter. It examines how active labour market policies are linked to in-work poverty. The authors analyse labour market policies in 18 European countries using the 2013 EU Statistics on Income and Living Conditions (EU-SILC) data and the 2012 wave of the Organisation for Economic Co-operation and Development (OECD) Active Labour Market Policies Database. Their findings show that active labour market polices with a stronger focus on demanding than on enabling strategies lead to higher in-work poverty rates.
Both part-time and temporary employment have been shown to be associated with high poverty rates across Europe. Yet, theoretical arguments as to why this is the case remain scarce. Given the multifaceted nature of in-work poverty, the main aim of this chapter is to unravel the different mechanisms that either cause or potentially limit the poverty risk of both groups of atypical workers. The results indicate that both groups are unable to secure a decent income to maintain themselves; not to mention their inability to sustain a family. However, their poverty risk remains remarkably limited when all income sources are taken into account. The authors find that temporary and part-time workers tend to be protected against poverty differently. Government transfers are particularly important for temporary workers, as they partially compensate periods out of work. Part-timers are more likely to rely on the earnings of other household members to avoid poverty, but with important differences across countries.
Asaf Levanon and Evgeny Saburov
While the share of workers among the poor varies across countries, working poverty is not uncommon. This is especially true in Israel, where the incidence of poverty among workers has risen dramatically in recent years. Currently, about 12 percent of working families live below the poverty line in Israel. The rise in the share of the poor among workers became especially pronounced in Israel since 2003, when the Israeli government reduced the generosity of several welfare programs and installed stricter eligibility conditions. As a result, families with at least one working parent currently account for about 50 percent of the families living in poverty in Israel. The composition of the working poor population in Israel reflects the general contours of inequality in the country. Working poverty is closely connected with household structure and ethno-national distinctions. By contrast, distinctions by age, which play a major role in other institutional contexts, play a smaller role in shaping poverty prospects in the Israeli context. The chapter builds on a typology of three major antecedents of poverty among workers – ethnicity, household structure and age – and documents their changing association with the likelihood of poverty during a 21-year span in which major demographic and institutional changes have occurred in the Israeli society and labor market. The chapter utilizes data from the Israeli Income Survey, from 1991 to 2011. Results document a pronounced increase since 2000 in the risk of poverty among the Arab population, single-headed households and households with more than two children. The chapter discusses these trends in light of changes in the institutional context in Israel, most notably the changes in welfare policy.