894 Reading notes: Castells 2

The Transformation of Work and Employment: Networkers, Jobless, and Flex-Timers

In The Rise of the Network Society, Castells examines various aspects of network society, including in chapter 4, consideration of how the information society has changed the world of work.  One reason for making work a key topic is the claim that “the process of work is at the core of social structure” (p. 216). 

            Castells argues that a valuable way to trace the ways that information networks have transformed work is to look at statistics related to employment and occupational structures for a number of advanced societies.  For that reason, the first main section of the chapter is “the historical evolution of employment and occupational structure in advanced capitalist countries: the G-7, 1920-2005.”  To support the discussion, the chapter also includes a lengthy appendix where the data are captured in charts. In fact, before Castells wades into the data, he makes another rhetorical move, namely, to challenge the commonly held beliefs about how so-called information societies have changed the world of work.  He notes the predictions of “classical theory of post-industrialism,” (p. 218) to wit, that knowledge provides the key source of productivity permeating economy, that the economy will decrease the creation of the products of manufacturing and shift to service jobs, and that “occupations with a high information and knowledge content in their activity” will be increasingly valued (p. 219).  He argues that all three of these premises need to be qualified.  In reference to the first point, he notes that knowledge was also important in driving the manufacturing economy. Related to the second, although shifts have been conspicuous in advanced economies, plenty of manufacturing continues globally and also remains important even in  advanced economies. Finally, the shift not only fosters the development of highly-skilled knowledge jobs but even more the proliferation of low-skilled jobs.  It is the middle that is disappearing.  Later in the chapter he takes a more detailed look at the second and third of these modifications to the usual narrative, but at this point, he moves back to a discussion of the data from the G-7 countries. 

            His basic road map is to look at the evolution of each economy, to compare the relative importance of the types of service within that country, and to conclude by looking at the trends of employment as correlated with “post-industrial societies” by other researchers.  Along the way, I noted a few points that particularly caught my eye, for example, the fact that fast food employment is not as pervasive as sometimes assumed (only 4.9 percent of total employment in USA, for example) (p. 230).  A more striking feature was that Castells points to a fair amount of variation between different countries.  In broad terms, the UK and USA are similar, Japan and Germany are similar, and France and Italy lie somewhere between the two models.  In other words, the consequences of cultural, social and political practices in these countries have played out in different ways.  The usual explanatory models fit the American case more closely because the commonly discussed model, namely, that manufacturing jobs have moved off-shore and service jobs have increased, was a “theorization of the evolution of the US employment structure” (p. 233).  To capture one difference, Japan has maintained greater stability in terms of manufacturing jobs than the US.  Another difference involves levels of self-employment. Self-employment has fallen in the USA and slightly in Germany and Japan while France and Italy retain stable levels of self-employment. Self-employment has increased in Canada and UK. Again, the USA does not serve as a model for what must automatically happen in information economies.   

            The information society has made the labor force less stable and more flexible in many ways globally, however. Whatever the model—whether an advanced society looks more like Japan or more like the US—the overall principle is similar, argues Castells. “As technological and organizational innovations have allowed men and women to put out more and better product with less effort and resources, work and workers have shifted from direct production to indirect production, from cultivation, extraction, and fabrication to consumption services and management work, and from a narrow range of economic activities to an increasingly diverse occupational universe” (p. 243).

            Globally, labor has also become a more interdependent dynamic system.  In other words, for the US to move away from manufacturing, for example, means that someone else has to be doing it.  Each model has an “employment structure… [that] reflect[s] their different forms of articulation to the global economy and not just their degree of advancement in the informational scale” (p. 246).  Castells argues that this articulation of the global market means that there should be new approaches to analysis in order to capture “the sharing of technology, the interdependence of the economy, and the variations of history in the determination of an employment structure spread across national boundaries” (p. 247).  All regions and most countries are seeing an “intensification of labor mobility” and advanced economies are seeing pervasive immigration (p. 249-250).  However, human capital does not flow as freely as financial capital. International migrations are indeed increasing, but constraints apply.  Interestingly, Castells notes that “there is indeed a global market for a tiny fraction of the labor force, concerning the highest-skilled professionals in innovative R & D, cutting edge engineering, financial management, advanced business services, and entertainment, who shift and commute between nodes of the global networks that control the planet” (p. 250-251). 
            My brother Mike has been able to take advantage of the global market for these types of workers.  His experiences, in fact, illustrates several of Castells points in the chapter.  After a number of years working for Intel in programming and database management, Mike leveraged his Intel experience into job offers in Kuwait, Hong Kong, and Manila.  He chose Manila, working in IT for Deustche Bank.  This also illustrates the role of multinationals as an example of growing interdependence of labor across global networks, one of three ways that Castells mentions that global labor is moving across and affecting workers across national boundaries.  The other two manifestations Castells mentions are international trade and its impacts across countries “both in the North and in the South” (think outsourcing, for example), and global competition and flexible management with its impact in countries (p. 251).  While my brother Mike worked in Manila, he decided to try to start a business in the Philippines developing Smart Phone apps, taking advantage of the same low labor costs that are attracting outsourcing to the Philippines. For various reasons, this venture did not succeed, so Mike moved on to a contract job for Intel in Malaysia.  Since then, he has worked in Berkeley, California, and from the beach in Puerto Rico, both as a private contractor whose skills are in demand and who can work from anywhere he has a good internet connection. 

Satellite internet connection makes office on beach a possibility

Mike working, Rincón, Puerto Rico, December 2015 

A key theme for Castells, however, is that the flexibility of markets offered by information networks actually has a powerful effect on the internal labor market within advanced economies.  Castells notes that “while America is an extreme case of income inequality and declining real wages among the industrialized nations, its evolution is significant because it does represent the flexible labor market model at which most European nations, and certainly European firms, are aiming” (p. 299).  In other words, it is precisely the fluidity within the global labor market that has created an hourglass-shaped polarization in the United States.  In fact, the process is not always a matter of simply adding low-paid, service jobs at the bottom of the pay scale.  It turns out that the “managerial/professional labor force” is growing faster than the class of “semi-skilled service workers” in the US.  However, skill level is obscured by the fact that these jobs may be clerical and sales jobs that are also not highly skilled and not necessarily well-paid. “Thus, while there are certainly signs of social and economic polarization in advanced societies, they do not take the form of divergent paths in the occupational structure, but of different positions of similar occupations across sectors and between firms” (p. 235).  Technology has sometimes not decreased jobs but replaced higher priced workers for lower priced ones, effects with clear gender and race correlations: “while machines mainly replaced ethnic minority, less-educated women at the bottom of the scale, educated, mainly white men began replacing white men in the lower professional positions, yet for lower pay and reduced career prospect than those which men used to have” (p. 266).  Such trends were sometimes obscured when job titles were tweaked to sound more impressive while pay and benefits were unimpressive. 

Meanwhile, the countries that attracted manufacturing jobs also have seen the effects of the information society lead to dramatic internal changes.  An example that Castells gives for the second of these is factories in China’s Guangdong province that were populated by rural migration in the mid ‘80s and the 1990s.  I saw this in a striking way in the late 1990s riding a train across Guangdong.  This southern province has traditionally been of great agricultural significance for a country as populated as China is, so it was amazing to me to see a great deal of fallow land and overgrown rice paddies from the train window.  This was striking because in Sichuan, the province where I was living at the time, every bit of land was cultivated.  I remember seeing cornfields that were not more than three or four rows wide tucked into hillsides in Sichuan.  As Castells says, “In sum, the more the process of economic globalization deepens, the more interpenetration of networks of production and management expands across borders” and thus, the greater its effects on internal labor dynamics within each country (p. 254).

Yokahama, March 2013

Beyond the trends in terms of what jobs are created and where, Castells also looks at how an increasingly networked society has also impacted working time, job stability, and “the social contract between employer and employee” (p. 282).  Flexible job arrangements are increasing globally.  For example, Japan has been known for lifelong job security attached to employment in major companies.  However, Japan has a “dual labor market logic” in which “it has combined the benefits of the commitment of a core labor force with the flexibility of the peripheral labor market,” namely, foreign workers, day laborers, and part-time female workers.  In fact, women part-timers are extremely important in Japan, where the typical pattern is that women work before marriage and then later return to the workforce part-time after raising children.  Castells also believes that the lifelong employment will decrease in Japan because of same trends affecting countries like the US, namely, shortened work life within companies, age discrimination for younger, cheaper workers making upper mobility trajectory much shorter, and as a result, decreasing job stability. An increasingly interdependent global system also means that trends in one country can affect practices in other countries.  As a matter of fact, says Castells, “the indirect effects of such tendencies on the conditions of labor in all countries are far more important than the measurable impact of international trade or cross-border direct employment” (p. 255).  He goes on to point out that “this model is not the inevitable consequence of the informational paradigm but the result of an economic and political choice made by governments and companies selecting the ‘the low road’ in the process of transition to the new, informational economy, mainly using productivity increases for short-term profitability” (p. 255).  In an increasingly interdependent, rapidly-changing world, the lure of short-term certainty is likely to be attractive almost everywhere than long-term possibility.

References

Castells, M. (2000). The rise of the network society. Malden, Mass: Blackwell Publishers.