Casual and Externalized Labour


Financialization may be understood in the broadest terms as: “the increased dominance of the finance industry in the sum total of the economic activity, of financial controllers in the management of corporations, of financial assets among total assets, of marketized securities and particularly equities among financial assets, of the stock market as a market for corporate control in determinant of business cycles.” R. Dore, Stock Market Capitalism: Japan & Germany vs. the Anglo-Saxon, Oxford: Oxford University Press, 2000 One of the lessons learned from studies of ‘globalization’ and the myth of the ‘Global Corporation’ is that we must not confuse political objectives with real outcomes. Many companies like Ramatex, Namibia Breweries and Woermann Brock may aspire to become global companies, but none have yet achieved this – it remains a goal and in the course of attempting to achieve that goal various strategies may be conceived and implemented. What is conceived, of course, may not be implemented. Too often a company’s research relies on the stated intentions and plans for companies, as the power of the companies is so monolithic that what they wish to materialize, and whatever they aspire to, is achieved. Ironically, this view is reinforced by an anti-corporate populism that assumes companies to be all-powerful, thereby exaggerating their ability to achieve their goals. The reality is of course far more complex. The fact is that the corporate strategies of these companies are often flawed, involving contradictory measures and objectives that reflect internal conflicts within the company. This not only concerns the impact of the trade union struggle against restructuring plans, but also conflicts within management. There is also significant mismanagement, based on poorly conceived goals and strategies, and plans built on inaccurate information, misunderstanding and miscommunication. One may ask: “Who negotiated a deal with Ramatex to invest in Namibia?” Holding the largest market share, the largest earning and dominating supermarket shelves and consumer consciousness obviously suggest successful strategies. But these are the results of trial and error, massive and costly mistakes and aggressive measures to correct these mistakes. All strategies are rife with contradictions and face resistance even within management. Moreover, strategies are implemented in complex and changing environments – made more complex and fragile by the influence of financial markets, they may produce contradictory outcomes or unintended consequences. This is especially so with global strategies applied to international production systems – where implementation locally is mediated by various political, social, economic and cultural factors – including various government action or inaction and most importantly, re-negotiation of structuring strategies in response to trade unions’ opposition. Many of this have the effect of integrating companies into globalised corporate and production systems. The point is that corporate announcements and business plans should not simply be translated into an uncritical description of “what is happening?” A critical reading of corporate news, announcements and presentations to investors potentially gives us important insights into what these companies are planning, what their goals are – what is driving them. Financialization has directly shaped the corporate structuring strategies of the companies. Throughout, every step of this restructuring has sought to appease financial markets by meeting projected estimates of market analysts and fund managers and generating as much corporate cash flow as possible that can be channeled into maximizing shareholders’ value. This shareholders’ value is “measured according to increasing returns on capital employment and ring share prices, and is adopted as an index of management success. This entails the financialization of the management goals and the logic of public market valuation of management performance.” As the result, earnings and growth projections are determined by financial market expectations. The pressure to restructure to “focus on the core” is pervasive throughout the beer and the retail industry. Throughout its restructuring drive Namibia Breweries has been under pressure to “shrink to grow”. A growing differentiation within the world of work is producing three major zones: 1. There is the core, formal-sector workers in more or less stable employment relations; they have wages, benefits and access to democratic worker and trade union rights. 2. There is the zone of casualised and externalized work, where non-core workers are compelled into less stable employment relations; sometimes they have temporary or part-time contracts with the core enterprise and at other times precarious contracts, intermediaries such labour brokers and sub-contractors. 3. The periphery where people make a living through informal-sector activities ranging from those that permit a degree of petty accumulation through subsistence activities to full employment. A developing country requires an understanding of this differentiation of the worlds of work, as well as the connections between making and earning a living. The trend has been towards an erosion of core workforce and corresponding expansion of none-core and peripheral work. The first zone: core enterprise. In the core workplace of apartheid, the apartheid regime consisted of a racially oppressive order derived from South Africa’s settlers’ colonial history. Like other spheres of the society, the workplace was a site of racial and still a site of racial domination buttressed by racial segregation and by racist discourses and practices in which the distribution, skills, incomes and power …. (See publication by LaRRI: “Namibia Affirmative Action in Employment: An Assessment: February 2005.” There is no shift to new forms of work, the workload is high and/or increasing and in half the cases new technologies have been with an emphasis on surveillance and production control, and the majority cases a concerted strategy of ca-sualisation and/or externa-lization has been pursued. Quality is an important focus of managerial strategies in half the cases, but seems to be less important in others. The second zone: trends towards casualised and externalized labour. There is growing trend by employers towards recon-figuring contracts of employment, with the aim of reducing costs and exposure to the risks that accompany employment. I will distinguish between casua-lisation and externalization. In casualisation, the employment relations between core employer and the employee is retained, but is rendered insecure and unstable through temporary and part-time terms. Externalization, through which the employment relationship is developed to a third party or nominal employer, renders employment even less secure and reduces the claims of employees on the core employer (labour brokers). Non-core workers may work in the formal-sector workplace alongside core workers, or may be displaced into specific non-core workplaces. Casualisation ranges from strategies to increase the daily and seasonal flexibility of labour in response to changing production requirements in fishing and farming industries, to the use of part-time workers at Shoprite to enable the employer to meet demands at peak shopping times. Externalization shows even wider range in the fishing sector where two-thirds of the workers are employed through labour brokers but where the nominal nature of the third-party employer is demonstrated by the high level of integration of the labour brokers’ companies into production site operations. The mining industry is being marked by widespread contracting out production to independent contractors. Ongopolo and RÃÆ’Æ‘Æ‘ÃÆ”šÃ‚¶ssing mines have outsourced “non-core” operations such as maintenance. The Namibian trade unions have not responded to these trends. The NUNW has adopted resolutions to organize casuals or temporary staff, but its affiliates have failed to recruit them. The peripheral zone: The peripheral zone consists of those who have been excluded from the formal economy and engage in informal income-generating activities on its margin. Those who work in this zone are not employed in the same sense as those in the core and none-core, as indicated above. I conceptualize the difference as the distinction between earning a living and making a living. Conventionally, informal work is defined as a situation where contracts are either non-existent or unstable and where workers do not receive the non-wage benefits associated with formal sector employment. In the informal workplaces the emphasis is on those who are making a living, that is, the self-employed, as well as unpaid activities such as childcare and subsistence farming. While some of those are operating in the urban economy, such as street vendors and/or hawkers, they are able to secure relatively stable niches in markets created by formal economic activity, such as tourism. Even this success is precarious because of the difficulty of traveling to towns and cities. Thus, as with the none-core, there are variable patterns of inclusion and exclusion in the peripheral zone. The street vendors/hawkers experience a degree of economic inclusion, while being excluded from virtually all other rights that attend economic activity. In contrast, those who live in the poverty-blighted rural areas experience an extreme degree of economic exclusion? For many living there, virtually the only access to economic resources is through social grants like old-age pensions. The erosion of core jobs, the growth of insecure and low-wages none-core jobs and the expansion of the peripheral zone have generated a widespread increase in poverty. Has organized labour responded to the emergence of these new forms of informal work? Have labour movements started to organize workers in none-core zones? There is a strong argument to be made that the organizational terrain of the periphery is so different to the organizational terrain of the trade unions that an altogether different form of organization is needed. Cuana Angula