Week 4 – Grabb and Guppy Chapter 9 Labour Markets, Inequality, and the Future of Work
PostIndustrial Society Theory
• The postindustrial society [PIS] arose in the 1970s, with the post WW2 expansion of white collar
jobs and service industries, along with increasing standards of living
Labour Process Theory
• An alternative view provided by NeoMarxists, this involves examining changes in the labour
process (how work is performed)
• New working class – nonmanagerial whitecollar workers in shops, offices, or the public sector.
Human Capital Theory
• Assumes that the labour market is an open arena where everyone with similar qualifications
competes for the same jobs on even playing fields
• This market rewards those with the greatest human capital, measured by education, training,
experience, and ability. A job’s reward is then based on its economic contribution to society
• The theory assumes that employers make rational hiring and promotion decisions based on ability
• An advantage, however, is that the HCT does accurately predict the returns on education:
o On average, individuals with University degrees have higher incomes, greater lifetime
earnings, lower risk of unemployment, and a higher probability of being in a “good” job
o Evidence: in the 1990s, vast majority of new fulltime jobs went to university graduates.
o Youth from poor families may not get to University, and are at high risk of dropping out of high
o Members of recent immigrant groups often end up in lowstatus jobs, even if they may be highly
educated and experienced
Labour Market Segmentation Theory
• There are different versions of the basic LMST model:
o Dual economy model – highlights the uneven development of economic sectors in industrial
o Distinguishes between core and periphery industries, with better jobs at the core (large
corporations, the government)
Small firms tend to have lower margins and profits – hence there is a greater pressure to keep the
wages down, and workers are easily replaceable.
Unionization is much higher in large than in small firms.
o Internal Labour Market
Pyramidshaped bureaucracies that recruit at an entrylevel position, then provide security, career
paths, and training once inside.
Most job openings are filled internally, creating a sheltered organizationbased labour market.
Until recently, a hallmark of coresector organizations
In the last decade, however, widespread downsizing has shaken internal career mobility. The
following have reduced internal career mobility and shaken employee commitment.
• Staff cuts
• “Delayering” process whereby the bureaucratic hierarchy is flattened
• A shift to contracting out and temporary workers
Changing Industrial Patterns of Employment
• Three major sectors:
o Primary: agriculture, forestry, and other resource extraction industries
o Secondary: manufacturing and construction
o Tertiary: industries creating service rather than products
• Since 1951, workforce production of primary/secondary has steeply declined.
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o Employment loses in the primary sector, mostly agriculture, because of global trends in
o Lowest net gains in jobs occurred in the utilities and public administration sectors.