Segmentation theory thirty years on

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Segmentation theory thirty years on

• Jill Rubery
• Manchester Business School
• University of Manchester

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Segmentation theory as a demand side theory

• Reaction to human capital theory
• Return to Commons, Kerr, Lester etc
• Refocus on organisations and workplaces
• But develops a macro perspective from micro
  strategies- similarities to varieties of
  capatilism/societal effects
• Short-lived due to limitations of the framework
  (to be discussed) and to the use of transactions
  costs/ imperfect information to explain/justify
  employer actions
• Absence of demand side evident most clearly in
  European employment strategy

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Critique of segmented labour market theory - 1978
Cambridge Journal of Economics

• Response to Doeringer and Piore Edwards, Gordon,
  Reich Braverman
• Dissatisfaction with
• functionalist approach to labour markets-e.g.
  high pay associated with high skill (all three
  including Braverman)
• conspiratorial approach to both employers (divide
  and rule) and unions (protect primary against
  secondary workers)- neglect of dynamics of
  capitalist competition on the behaviour of both
  sides
• focus on either demand or supply-side
  segmentation not on their interactions
• generalisation from US-specific phenomena

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Developing segmented labour market theory
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Towards a dynamic segmentation theory

• Three level dynamic framework drawing on
  Osterman
• Performance pressures (market and mimetic
  pressures for change )
• Organizational culture and power relations
  (pressures for and against change)
• External labour market and regulatory conditions
  (specific pressure for change plus context in
  which performance and organisational culture
  factors play out)

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Introducing inter-capitalist relations into
segmentation theory

• Inter-capitalist relations involve
• a) Inter-capitalist competition
• Reinforces dilemma of control versus cooperation
  in employment relationship-basis for non
  deterministic theory
• b) Inter-capitalist contracting
• Cooperation/ conflict dynamic extends across
  organizational boundaries-not a case of either
  contractual or collaborative relations
• Externalization motivated by segmented markets
  not just by technical issues
• Importance of business to business relationships
  for employment sets costs/work intensity
  etc-reinforces role of organizations in shaping
  labour markets
• Engagement of non employers/clients in employment
  relationship -consequent problems in establishing
  strong internal employment relations-in contrast
  to psychological contract/HPWS approach

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Integrating gender into segmentation theory

• Gender, skills and segmented labour markets
• Secondary sector jobs may not be low skilled/
  internal labour markets shaped by external social
  stratification
• Women not primarily or always a disposable labour
  reserve
• Long term change in gender relations/ women's
  aspirations
• Need to examine segregation/flexibility/substituti
  on effects
• iii) Labour market structure a barrier to
  changing social organisation
• Economics of equal opportunities-outdated views
  of women as contingent labour reserve hard wired
  into employment organisation

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Segmentation theory and the societal
effect/varieties of capitalism school

• Societal effect school revealed the
  American-centric focus on ILMs and the importance
  of alternative institutional arrangements for
  structuring labour markets.
• Segmentation theory gives more scope for
  independent action by organisational actors-
  alternative to coordinated capitalism is not
  perfect competition
• Combining societal effect with segmentation/
  productive systems approach-
• societal systems not harmonious but based on
  compromises/tensions
• change may reshape power relations, allow for
  dynamic change and change may be incremental but
  cumulative

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Pressures on societal systems
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Reaffirming the focus on employing organisations

• Employers are the architects of employment
  systems
• Need to keep employers in the centre of the
  analysis- not just labour supply, nor societal
  institutions
• Hidden role gives them greater power- continuing
  legacy of mainstream economics

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The dynamics of segmentation theory?

• Dynamic analysis in three senses
• Institutional arrangements as contested
  relationships not static barriers to change
• Addressing new /changing labour market issues and
  employment forms- from core-periphery to
  inter-organisational contracting/
  country-specific to comparative
• Dynamic development over a research career