Insecurity, Labour Relations, and Flexibility in Two Process Industries: A Canada/Sweden Comparison

Abstract

Support for this research was provided by the Social Sciences and Humanities Research Council of Canada, the Founds pour la formation de chercheurs et l'aide a la recherche of the Government of Quebec, Statistics Canada, and the Humanistika och Samhallsvetenenskapligia Forskningsradet of the Government of Sweden. The research reported here would have been impossible without the help of our collaborators on this project, Bengt Furaker and Leif Johanssen. Abstract. Sustained growth requires labour flexibility - wage changes, mobility between employers, or acceptance of changing technology within the workplace. But it is claimed that some limits on flexibility increase productivity. Limits to wage cuts and increases in the employment security of workers may encourage mobility and induce workers to more readily accept technological change in the workplace. Canada and Sweden have differed in the amount of security provided by their institutions. In this paper we use survey and plant case study data from two industries in these countries to examine the extent to which attitudes to job security, labour relations and flexibility differ between the two countries. Resume. La flexibilite de la main-d'oeuvre--flexibilite des salaires, mobilite inter-organisationelle, acceptation des changements technologiques au sein des organisations--serait necessaire a une croissance soutenue. Par contre, certaines limites a la flexibilite pourraient ameliorer la productivite: Des restrictions aux coupures dans les salaires et une augmentation de la securite d'emploi encourageraient la mobilite et ameneraient les travailleurs a accepter plus facilement les changements technologiques. Le Canada et la Suede accordent a leurs travailleurs des niveaux de securite d'emploi differents. Dans cet article, des donnees provenant de sondages et d'etudes de cas d'usines dans deux industries sont utilisees pour etudier les differences entre les deux pays au plan des attitudes envers la securite d'emploi, les relations de travail et la flexibilite. That economic growth and full employment require a flexible labour force is almost uncontroversial. (1) There is, however, controversy over the preferred forms of that flexibility (e.g. Blank, 1994). We can distinguish three of them. First, there is wage flexibility. If demand declines for whatever a particular group of workers produces, other things being equal, employment will only be maintained if wages fall. Over the postwar period this has not usually involved nominal wage cuts. Instead, while nominal wages have risen or remained constant, real wages have been reduced by persistent inflation (Solow, 1979; 1980). (2) Second, employment has to shift between sectors of the economy. In the long run, economic growth depends on productivity growth which, in turn, requires the transfer of employment to more productive sectors. This shift of employment can take place in several ways. It can involve workers moving from a less to a more productive employer within a single commuting region, or it can involve geographic mobility. It can involve either a period of unemployment, or more-or-less direct movement from one job to another. Or, rather than requiring that workers move between employers, over a longer period shifts in employment occur as older workers retire from less productive sectors while new labour market entrants take jobs in more productive sectors (Aberg, 1984:218). Finally, the procedures and equipment in existing work-sites change and (usually) improve. Productivity grows faster where, within work-sites, workers adapt to changes in technology by learning new skills, accepting changes in the responsibilities attached to their jobs, or agreeing to shift to new jobs. For conventional economics, the preferred sources of flexibility in any given context will depend on the costs attached to each. For example, because of the personal costs involved, to get workers to move long distances may require a particularly high wage rate. …