Abstract
Looking at how the global factories organize and control their labor forces sustainably and effectively, a considerable number of studies have focused on the politics of production but have seldom discussed the organization of the labor market beyond the workplace. Based on fieldwork about labor recruitment in the manufacturing industry in City W, this article analyzes the organizational ecology of the current labor market and its embedded institutional environment. It shows that to satisfy factories’ demand for flexible labor, the organizational ecology of the labor market has developed an intermediary chain characterized by multilevel outsourcing, an elaborate division of labor, and constant internal competition and cooperation. Although the intermediary chain coordinates flexible production, its profit-making model and business strategies drive up labor costs, consistently aggravating labor turnover and constructing low-skilled labor force. Local government, enterprises, and workers are the three forces constituting the institutional environment that nurtures this intermediary chain. Each of them makes use of “flexibility” for their own interests, unintentionally increasing the risks to the production system.
Highlights
Since the reform and opening-up, China has transformed itself into the global factory; its manufacturing industries have experienced booming development owing to cheap labor
What needs to be explained is how the institutional conditions that sustain global production are constructed, and what is the logic of action in the built institutional environment? We argue that the local government, workers, and factories together promote the creation of an institutional space conducive to the intermediary chain operation
To fulfill the dual requirements of flexibility and large labor force, factories outsource the hiring of formal workers to labor service companies, which organize, select, and supply workers to factories
Summary
Since the reform and opening-up, China has transformed itself into the global factory; its manufacturing industries have experienced booming development owing to cheap labor. From a theoretical perspective of the neoclassical market model, demographic transition, intergenerational changes, and the rate of labor mobility could undoubtedly influence the shift in the supply curve for labor. In this regard, scholars insist that a labor shortage results from underpricing the labor force. To address the practical problem and the theoretical gap, this article explores the organizational ecology of the labor market, its institutional environment, and the related parties. We argue that they function together to control the labor market and supply a large group of “flexible” workers. What is the institutional environment in which the labor market is embedded? What is the mechanism by which various parties actively or passively participate in such an institutional formation? What are the possible consequences of such an institutional environment that reproduces flexibility in the production system?
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