Deteriorating quality of work undermines Europe's innovation systems and the welfare of Europe's workers!

Bengt-Åke Lundvall  
Aalborg University

One of a series in which practitioners and researchers from across Europe contribute personal perspectives and experiences of workplace innovation.

Bengt-Ake's stimulating essay is based on his presentation to EUWIN's Copenhagen Workshop. He argues for "a political mobilisation against those who insist that there is a choice between high quality jobs and a high volume of jobs on the basis of new alliances between employees, progressive employers and progressive trade unionists." 

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Introduction

EUWIN brings together work organisation experts and practitioners from different parts of Europe in a movement based on the sharing of research efforts and practical experiments aiming at demonstrating that workers and their organisations have an active and important role to play in initiating and driving innovation. In this article I will argue that this project is especially important since one reason for the current weak economic performance of Europe is the deterioration of the quality of work in Europe as a result of the economic crisis.

The Lisbon Strategy was about creating better jobs!

The Lisbon Strategy from 2000 was exceptional since it included ‘the quality of work’ as part of its new strategic goal: ‘better jobs and greater social cohesion.’  But this focus upon the quality of work proved to be short lived - the mid-term review of the Lisbon strategy in 2005 argued that the strategy was ‘too complex’ with too many targets and the goal was again narrowed down to ‘more jobs’.  This change in priorities is reflected in the new strategy EU2020 where the goal is formulated in vague terms as ‘more jobs and better lives’.

Even before the shift in priorities in 2005 the reference to the quality of jobs was never made operational – a formal reason given was that labour ministers could not agree on what indicators to use to measure the quality of work (Raveaud, 2007). One option was to define good jobs as ‘standard jobs’ and bad jobs as part time or ‘fixed term’ jobs. This proposal was vetoed by the UK and Netherlands on the grounds that non-standard jobs should be seen as stepping stones to standard jobs. The resistance was based upon an assumption that there is a trade-off between better and more jobs.

A proposal for measuring the quality of jobs

In a series of papers we have used data from the European Survey on Working and Living Conditions to categorise jobs (Lorenz and Lundvall, 2010). We make a distinction between jobs according to how far jobs offer learning opportunities for the employee and how far management leaves discretion for the worker to self-determine the work.

We propose that the international comparisons of the frequency of jobs offering employees access to organisational learning presented in table 1 may be regarded as an adequate indicator of quality of jobs. They are ‘better’ jobs in two different dimensions. First, we have shown that these jobs contribute to an innovative economy (see Arundel et al 2007) and, second, we have shown that those who operate in these jobs are significantly more satisfied with their work situation than the others (Lorenz, Lundvall and Valeyre 2005).

The data in table 1 do not indicate any trade-off between quality and volume of employment - rather they indicate the opposite: that high quality jobs go hand in hand with high employment rates. Among the EU-15 only the Netherlands, Denmark, Sweden, Austria and Germany have reached the target rate of employment (70%) and these are also the economies where the share of jobs offering workers discretionary learning is highest (see table 1):

Table 1: National Differences in Forms of Work Organisation (2000)


Percent of employees by country in each organisational class

Discretionary
Learning
Lean
production
Taylorist
organisation
Traditional
organisation
Austria  47.5 21.5  13.1  18.0 
Belgium 38.9 25.1  13.9  22.1 
Denmark 60.0 21.9  6.8  11.3 
Finland 47.8 27.6  12.5  12.1 
France 38.0 33.3  11.1  17.7 
Germany  44.3 19.6  14.3  21.9 
Greece  18.7 25.6  28.0  27.7 
Italy  30.0 23.6  20.9  25.4 
Ireland  24.0 37.8  20.7  17.6 
Luxembourg  42.8 25.4  11.9  20.0 
Netherlands  64.0 17.2  5.3  13.5 
Portugal  26.1 28.1  23.0  22.8 
Spain  20.1 38.8  18.5  22.5 
Sweden 52.6 18.5  7.1  21.7 
United Kingdom  34.8 40.6  10.9  13.7 
EU-15  39.1 28.2  13.6  19.1 
Source: Third Working Condition Survey 2000.  European Foundation for the Improvement of Living and Working Conditions

To some degree the share of discretionary learning jobs will reflect structural differences and different income levels but this is far from the full explanation of the international differences. In Lorenz and Valeyre (2005) logit regression analysis is used in order to control for differences in sector, occupation and establishment size. The results show statistically significant ‘national effect’ also when controlling for the structural variables, thus pointing to considerable latitude in how work is organised for the same occupation or within the same industrial sector.

What happened with the quality of working life 2000-2010?

Below we update the original analysis of forms of work organization and show how the frequencies of the different forms have evolved over the 2000s. Table 2 shows the trend in the four forms of work organization for the EU-15 between 2000 and 2010. The results show an increase in the Direct Learning (DL) forms of slightly less than 2 percent during the first half of the Lisbon period counterbalanced by a fall in the traditional forms. By 2010, following the 2008 financial crisis and the considerable decline in output and employment which accompanied it, the results show that a sharp fall in the frequency of the DL forms had occurred. This decline was compensated by an increase in the more bureaucratic lean forms and to a lesser extent by an increase in the traditional and taylorist forms of work organization.

Table 2: Frequencies of Forms of Work Organization by Three Survey Waves: EU-15

Wave Discretionary
Learning
Lean
Production
Taylorism Traditional Total
2000 35.1 28.2 17.4 19.3 100.0
2005 36.8 28.6 17.8 16.8 100.0
2010 31.8 31.3 18.6 18.3 100.0
Pooled 
Sample
34.1 29.6 18.0 18.3 100.0


Source: Third, Fourth and Fifth Working Conditions surveys, European 

Again the data support the idea of a positive relation between the quantity and quality of jobs rather than a trade-off. The share of the DL forms increased during period up to 2005 characterised by an increase in the average employment rate for the EU-15, while it declined during the latter part of the period when employment was falling.

In table 3 we present data separately for the individual EU15 countries for 2000 and 2010. Here we only bring data for ‘workers’ defined as clerks, service and sales workers as well as craft, plant and machine operators and unskilled occupations (ISCO major groups 4 through 9). This is a good indicator of the breadth and depth of participatory learning in the economy and of the quality of work for non-management employees.

Table 3 shows a fall in the quality of work and a lower rate of participatory learning in all EU-15 countries with the exception of Ireland, Portugal and Spain. The fall is dramatic in some of the countries that have been leaders in terms of quality of work (especially Denmark and Finland). In all the major economies with the exception of Spain (Germany, France, UK and Italy) there was a significant fall. An already weak position was further weakened in Greece.

Table 3: Share of all workers engaged in discretionary learning jobs 2000 and 2010 in Europe


2000     2010    
Austria 39.5 32.3
Belgium 34.2 31.9
Denmark 55.5 43.3
Finland 39.6 29.7
France 26.0 20.2
Germany 34.8 29.5
Greece 16.6 13.7
Italy 32.2 27.6
Ireland 16.6 13.7
Luxembourg 29.2 26.5
Netherlands 49.3 44.1
Portugal 18.4 27.9
Spain 15.3 20.5
 Sweden  41.1  36.4
 United Kingdom  19.9  16.8

Final reflection

The deterioration of the quality of work has implications both for Europe’s growth prospects and for the welfare of workers. In a learning economy a reduction in participatory learning undermines the long term competitiveness of Europe as well as workers’ welfare (Lundvall and Johnson 1994). I therefore hope that EUWIN will bring the quality of work back on to the European agenda as a goal to be taken seriously. As I see it, we are in the ‘downswing’ of a political business cycle (Kalecki 1945). To change the agenda will require a political mobilisation against those who insist that there is a choice between high quality jobs and a high volume of jobs on the basis of new alliances between employees, progressive employers and progressive trade unionists.

Literature

Arundel, A., Lorenz, E, Lundvall, B.-Å. and Valeyre, A. (2007) ‘How Europe’s economies learn: a comparison of work organization and innovation mode for the EU-15’, Industrial and Corporate Change, vol 16, no 6, pp 680-93.

Kalecki, M. (1945), ‘Political aspects of full employment’, The Political Quarterly, Volume 14, Issue 4, pp. 322–330.

Lorenz, E. and Lundvall, B.-Å. (eds.) (2006), How Europe’s Economies Learn: Coordinating Competing Models, Oxford: Oxford University Press.

Lorenz, E., Lundvall, B.-Å. and Valeyre, A. (2005), ‘The Diffusion of New Forms of Work Organisation and Worker Outcomes: Lessons from the European Case’ paper presented at the 2005 Globelics Conference, Beijing, China.

Lorenz, E and Valeyre, A. (2005), ‘Organisational Innovation, Human Resource Management and Labour Market Structure’, The Journal of Industrial Relations, Vol 47, No. 4, pp. 424-42

Lundvall, B.-Å. and Lorenz, E. (2012),”From the Lisbon Strategy to EUROPE 2020”, in Morel, N., Palier, B., and Palme, J. (eds.), Towards a social investment welfare state?: Ideas, policies and challenges, Bristol, Policy Press,  Bristol, ISBN 9871-1-87472-924-7,  pp. 333-351.

Lundvall, B.-Å and Johnson, B. (1994), ‘The learning economy’,  Journal of Industry Studies, Vol. 1, No. 2, December 1994, pp. 23-42.

Raveaud, G. (2007), ‘The European Employment Strategy: Towards More and Better Jobs?’ JCMS: Journal of Common Market Studies 45(2): 411-434.

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