BRADY-DeclineEmploymentProtection-2019

Overview of Employment Protection and Precarious Work

  • Author: Anne Marie Brady

  • Context: Explores changes in employment protection laws and the rise of precarious work since 1989.

  • Publication: German Marshall Fund of the United States, 2019.

Labor Market Changes Post-1989

  • Historical Shift: Significant changes in the employment landscape in the U.S. and Europe post-Second World War, particularly evident by 1989.

  • Unemployment Rates: 1960-1973: Low unemployment in Western Europe (2%); Increased rates (6.4% U.S., up to 10.7% in parts of Europe) post-1990.

  • Policy Response: Increasing unemployment led to calls for deregulation of labor laws and reductions in social protections.

Wage Trends in Europe

  • Wage Convergence: The EU was expected to narrow wage gaps between Eastern and Western Europe; initial success between 1995 and 2008.

  • Challenges: Wage growth slowed after 2010; rise in in-work poverty noted during this period.

  • Minimum Wages: Varied significantly across the EU, with notable drops in wage levels in several Eastern European countries compared to Germany.

Wage Inequality in Major Economies

  • Germany vs. France: Post-crisis wage growth diverged; real wages for lower earners in France increased while Germany saw stagnation.

  • UK Trends: Rising inequality since the 1980s; real wages for median workers fell significantly between 2008 and 2014, though some recovery noted post-recession.

Employment Quality and Precarious Work

  • Nonstandard Work: Increase in contingent and alternative work arrangements, correlating with lower wages and job security.

  • Precarity Definitions: Nonstandard employment is defined as unstable, insecure, lacking social protections.

  • Demographic Variations: Higher prevalence of precarious work among women and low-skilled workers.

Driving Factors of Change

  • Megatrends Influencing Labor Markets: Globalization, demographic shifts, technological changes (automation), and decarbonization.

  • Institutional Changes: Reduction in union power, increased labor market flexibility.

  • Consequences of Flexibility: Rise in precarious jobs, with diminishing quality of work and income predictability.

Future Implications

  • Concerns Over Inequality: Although some states are seeing wage growth, overall trends suggest increasing income inequality in the U.S. and Europe.

  • Impacts of Continued Precarity: Long-term implications for skills development, economic stability, and social equality.