Introduction to Sociology: Markets

 

We shall examine the nature of labour markets, highlighting two different approaches.

 

Basic Ideas

There is a way of thinking about markets, and this is often called a ‘market discourse’. This discourse has two particular features:

i) a celebration of values connected with market consumers, such as choice and privacy; and

ii) market actors as enterprising individuals, who show creativity, innovation and dare to make decisions.

 

The Liberal / Free Market Approach

- Frederick von Hayek and Milton Friedman are key thinkers.

a) This approach suggests several general features of markets:

i) consumer (producer?) sovereignty: the power of consumers, stresses the value of choice; equally workers have some discretion over the nature of their job;

ii) equality of individuals: no discrimination on the basis of social position and status, only money (i.e., price, costs and productivity) matters;

iii) freedom of action: economic agents are free to act according to their self-interest, not coerced; and

iv) public welfare: economic transactions lead to greater welfare for all, as self-interest result in public good (e.g., bees and honey).

b) In the case of labour markets, liberals argue that market exchanges are an improvement on feudal form of labour, which serfs were obliged and tied to their lords.

In labour markets, workers sell their labour time to employers in return for wages. In theory, employers are indifferent to the identity of their workers (in terms of gender, ethnicity, sexuality and age), only the ability to exploit their skills, talents and efforts matter.

e.g., employers shift traditional craft-based work to low-wage countries, and so change the face of the industrial workforce.

It is suggested that this leads to a meritocratic society:

- fair and equal chances ; there is no discrimination; and

- equal opportunity; benefits to both employees and employers.

 

The Institutional / Dual Labour Market Approach

- Richard Edwards and Harry Baverman are key thinkers.

a) This approach dismisses the claims of liberals as false ideology, and suggests that there is market segregation and discrimination between workers. This approach makes certain claims:

i) market outcomes are not based in human needs, but ability to pay and possess financial resources;

ii) markets generate social divisions, as economic actors enter the market game with different resources;

iii) there is little choice and freedom to act is limited since individuals may have poor alternatives and fall-back position; e.g., no job means destitution!

iv) markets produces conflict, not harmony, since different social groups (such as business and professional groups) have varying interests, needs and wants;

v) markets are socially constructed through power relations, such as social class (class conflict and struggle), gender (sex discrimination), ethnicity (racism) and industrial interests (e.g., miners versus gas and oil workers)

b) The labour market consists of two parts:

i) primary sector workers (two thirds of workers?): this consists of managers, professionals, and carft-skilled workers, who have a degree of discretion and good pay. They have permanent and full-time work and can perform different tasks and skills to adapt to changing demand of their organisation and market needs.

ii) secondary sector workers (one third of workers?): this consists of low clerical staff, sub-contracted workers, who have general and non-specific skills. They have little autonomy and control of how work is organised. Often they are on low pay and part-time, sometimes seasonal and casual work. They cane be hired and fired according to firm’s economic activity, such workers require little training and work is insecure and precarious. Though, part-time jobs can be advantageous to certain group of employees.

Primary sector workers can be transformed into secondary sector workers through technological changes, which de-skill their jobs; e.g., printing and craft-based work. Also they can be sub-contracted and casualised in order to save costs; e.g., teaching and nursing.

In this approach, workers enter the labour market not on equal terms, and the market segregates them resulting in structural inequalities.

For example, the feminisation of the labour force has resulted in the expansion of service-based sectors and part-time work. However, this has resulted in sex-typing of certain forms of jobs and occupations (such as nursing and clerical work), discrimination, low pay and poor working conditions.

In the past, employers and trade unions discriminated against women. Some practices still persist:

i) marriage bar (this was outlawed in 1940s);

ii) assumptions about family obligations;

iii) a lack of crèche facilities and flexible work;

iv) patriarchal attitudes and strategies – male breadwinner and female house maker; and

v) jobs are labelled and deemed as women’s work, and are then seen as unskilled or semi-skilled so justifying low pay.

This results in horizontal segregation (gender variations across sectors, such as agriculture, engineering and retailing), and vertical segregation (differences within occupations, such as grades in banking and teaching).