assignemn 2

MARISCA VAN WYK STUDENT NUMBER:50314173 SOC3702 ASSIGNMENT 2 UNIQUE NUMBER: 760466

0

TABLE OF CONTEXT DISCRIPTION

PAGE NUMBER

1. THE QUESTION

P2

2. INTROUDUCTION

P2

3. KEY CONCEPTS

P2-3

4. INFLUENCE OF FLEXIBLE LABOUR MARKETS ON THE ORGANISATION

P3

5. INFLUENCE OF FLEXIBLE LABOUR MARKETS ON THE WORKER

P3-4

6. CONCLUSION

P4-5

7. BIBLIOGRAPHY

P5

1

1. THE QUESTION

THE IMPACT OF LABOUR FLEXIBILITY ON THE LIVES OF WORKERS AND THEIR ORGANISATIONS 2. INTRODUCTION Labour market flexibility “refers to the extent to which an enterprise can alter various aspects of its work and workforce to meet the demands of the business, for example the size of the workforce, the content of jobs, and working time” (Barker, 2007:127) This involved the ease of labour market institutions in allowing labour markets to reach a nonstop evenness determined by the intersection of the demand and supply curve. Labour market flexibility or a-typical employment is a more flexible type of employment whereby workers in many cases are not part of the company and do not have a long-term relationship/ permanent contract with an employer/organisation. Labour market flexibility refers to the informal sector, because of global competition, occupied by semi-skilled and unskilled workers flexible/unsecure employments, such as temporary workers, casual workers, part-time workers and some type of contracting employment.

3. KEY CONCEPTS

There are three main forms of labour market flexibility according to only study guide for soc3049 (2008): Employment or numerical flexibility refers to the ability of employers to lay off employees. Employment flexibility means that employers have the ability to retrench workers instantaneously with ease and no significant legal implications on the organisation. The organisation also has no legal responsibility toward the employers being retrenched, leaving them without severance packages and no prospects of compensation for the period of being unemployed while seeking other employment. When employers want more workers, they will make use of low cost workers (casuals or temporary workers), and when they are no longer needed the workers will be easily laid off. The process of globalisation has been characterised by increased use of casual and temporary employment. Wage flexibility means that employers are not forced to pay a certain amount for a certain number of hours worked and are able to build in more performance pay, not standard payment. Work process flexibility refers to the way in which production and grading are organised, and it allows employers to shift workers between sets of tasks, and alter work times and work practices. Labour market flexibility is a organisations ability to make changes to their employment in terms of the number of employees they hire and the number of hours worked by the employees. Labour market flexibility also includes areas such as wages and unions. A flexible labour market is one where organisations/businesses are under fewer regulations regarding the labour force and can therefore set wages, fire employees at will and change 2

their work hours. A labour market with low flexibility is bound by rules and regulations such as minimum wages restrictions and requirements from trade unions.

4. INFLUENCE OF FLEXIBLE LABOUR MARKETS ON THE ORGANISATION

Flexible labour markets imply that wages and conditions are determined by market forces and not governments or trades unions. In the case of functional or work-process flexibility the organisation gains, by not having to employ two or three workers, but having one employee multitask and do the work of these three people, but only receiving compensation for the position he/she is employed in. Wage flexibility for the organisation means that they can enforce performance incentives, giving workers minimum wages, and forcing them to perform for incentives. This causes the work force to give maximum effort and top performance and is very positive for the organisation, a so called initiative no work no pays, “at a sectoral level, wage flexibility implies different wage rates form of payment for different sectors, depending on the level of productivity and general performances of the sector relative to other sectors” only study guide soc3049 (2008:129). The employment flexibility gives the organisation the power to change the number of workers in its employment. They get to lay off workers without a problem. When cash flow or a prospect of low income is in the organisations forecast, they can let people go, and safe on wages to keep their running income at an acceptable level. Flexible labour markets have the following main features which are in favour of the organisation: •

Easier to hire and fire workers according to the needs of the organisation

•

Limited if any regulations for minimum wages and working conditions. 5. INFLUENCE OF FLEXIBLE LABOUR MARKETS ON THE WORKER

These features have direct implications on the work force, and these are not so positive as the forces for the organisation, Impact of labour market flexibility on workers is disadvantaging, by reducing wages and training of skills of the part time employed wagers: Part time and temporary staff may not get sufficient training from firms because they only have short term contracts. Therefore, many low skilled workers will remain under-skilled because they never gain job steadiness and the training this encourages. Flexible workers are not included in formal employment, and labour laws do not cover them. The danger here is that labour market flexibility has removed the conditions of employment, with increasing numbers of workers falling under the working poor 3

•

•

•

•

Flexible labour markets create greater job insecurity and stress. Job security is often as important to workers as the level of wages. This insecurity could lead to lower morale and lower productivity for the firm in the long-run. Kenny (2001:8) points out that household that is supported by casual wage is more likely to lack basic amenities such as electricity and running water. She argues that 19.6% of households with no full-time employees stay in an informal settlement (Kenny, 2001:8). Rising inequality as non-unionised part-time workers get smaller pay increases. Arguably flexible labour markets have created a bigger gap between those ‘insiders’ with secure job contracts, and those ‘outsiders’ without job contracts. The growth of insecure and low-wage noncore jobs has created a widespread increase in poverty and disadvantages poor people even further. Many flexible workers such as casuals and subcontracted workers are earning lower wages than permanent workers. Kenny (2001:5) indicates that subcontracted workers earn far less an hour; in fact, on average they earn close to what casuals earn (R7 per

•

hour). Higher search costs for workers needing to find new jobs. Also firms may have higher replacement costs for hiring more workers. Firms may end up paying a premium to employment agencies to help fill gaps in their workforce. 6. CONCLUSION

The free market economy that brought labour market flexibility emerged because of the pressure from globalisation and was driven by Western countries. Flexible employment poses a serious threat to full-time employment. There has been an increase in the co-operation between labour brokers and companies in terms of recruiting workers. The number of workers employed by companies through labour agencies, and the impact of this on workers and labour regulation is radical. Under the conditions of globalisation, new types of flexible work and in formalisation have emerged in South Africa, just like elsewhere in the world, and they are dividing the workforce in different ways. The introduction of labour market flexibility has the potential to destroy full-time jobs and to bring about more and more insecure jobs and therefore poverty in South Africa. Many jobs have been lost. Companies started to restructure their workplace and use labour market flexibility. Due to 51 the high level of retrenchments and work restructuring, the majority of workers became unemployed and marginalised. Flexible labour has decreased the wages of workers who are not in a good

position to improve them. Labour market flexibility refers to the extent to which different elements of the labour market can adjust to changing circumstances (Barker, 2007:127). Firms primarily embark on the use of labour market flexibility to increase profitability and growth at 4

the expense of workers. Companies are increasingly using flexible forms of employment even if they are performing very well. Labour market flexibility has created a crisis for workers by reducing their wages, removing their benefits and removing their legal protection and access to trade unions (Barker, 2007:134;). South Africa has experienced high levels of unemployment, inequality and extreme poverty because of the move to the global economic environment since the ANC’s accession to power and the emergence of globalisation. When the ANC was elected the ruling party in 1994, it gradually shifted to the right and came up with a non-negotiable macroeconomic policy called GEAR. The policy was in line with neoliberal pillars such as privatisation of state assets and labour market flexibility.

7. BIBLIOGRAPHY • •

•

Barker, F. 2007. The South African labour market: Theory and practice. 5th ed. Pretoria, Van Schaik Kenny, B. 2001. We are nursing these jobs: The impact of labour market flexibility on South African retail sector workers. Sociology of Work Unit, University of the Witwatersrand [Online]. Available: http://www.geog.psu.edu/course/geog497/labor/readings/Kenny01- RIG book chapter final [2008, 2 February] Nobie. H. Lesufi.I.2008. The only study guide for soc3409: industrial sociology: the study of work and society. Pretoria, UNISA Pres.

5