The social construction of the service sector: institutional structures and labour market outcomes

Abstract

I argue that the characterisation of the lower end of the service sector as innately poorly paid, casualised and unorganised confuses cause and effect. It describes the effects of an institutional vacuum that allows this sector to suffer severe wage competition, which results in low wages and poor working conditions. There is nothing innate in the lower end of the service sector that makes these jobs poorly paid except the lack of institutions, such as unions and the state, structuring this segment of the labour market. Pay and working conditions vary within the sector and between specific locations, and depend on institutions, or the lack of institutions, to structure the local labour market. I use the case of hotel employees and restaurant employees in Las Vegas to show that not only can high union densities affect wages and other measurable benefits but a strategically unionised labour market also can transform the structure of the labour market itself.