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Vulnerability at Work: Legal and Policy issues in the New Economy

Increasing vulnerability at work is a feature of the new economy.  By almost all measures, vulnerability for workers is increasing: workers now have less power in the workplace; they are compelled to assume more risk in the labour market; and they enjoy less job and income security as a result. In addition, there are growing numbers of workers who are especially vulnerable, either because they generate inadequate income; because they are engaged in marginal self-employment and are not legally recognized as employees; because their work is either inadequately regulated and protected or falls outside the regulatory net governing work altogether; because they have conditions or obligations that impinge on their capacity to participate in the labour market; or because they are subject to particular forms of discrimination and disadvantage at work.

These phenomena are inseparable from the transformation of work in the new economy and the dominant trends in respect of the regulation of economic activity. One result of the series of shifts - technological, ideological, regulatory, institutional and cultural – associated with economic restructuring and the reorganization of production is that many workers experience both declining power at work and declining terms and conditions of work. Because the fate of workers the new economy is inseparable from the social, political and economic wellbeing of societies, the question of work is now the subject of sustained analysis and debate across industrialized and developing states (World Bank, 1995; Supiot, 2001; Auer and Gazier, 2002). 

Addressing the vulnerability of workers is an essential part of responding to the social deficit of globalization (UNDP, 1999). There is a compelling argument that one of the most pressing imperatives in the new economy is to find a way to better distribute both the costs and gains of economic restructuring. What occurs in and around labour markets is crucial to this objective: markets remain the most important mechanism of distribution, far outstripping what occurs through taxation and transfers through the state (Collins, 1999).  Because of the fiscal pressures on states in a world of capital mobility, labour market participation is increasingly central to individual and household welfare (Avi-Yonah, 2000; Esping-Anderson, 1999). Although it is clear that the fate of workers can be profoundly affected, both for better and for worse, by a wide range of economic and political actions and decisions, much of the problem of worker insecurity in the new economy will have to be solved ‘at work'. 

Addressing vulnerability at work requires analyzing the norms, rules, policies and institutions that now structure transactions in labour markets and productive activity in general. At the level of policy and regulation, however, little has been done in Canada to better enable workers to weather the ups and downs in a world of work that has become much more volatile, unstable and insecure. Responses have tended to be piecemeal, and comprehensive analysis of their effects scarce. So far, reforms have more often reflected employers' demands for greater flexibility and lower labour market costs than employees' need for more protection and security. The effect has been to intensify the vulnerability of workers: the paradox is that, rather than ameliorate workplace vulnerability, reforms to labour market and other institutions are increasing the disadvantage that workers experience due to phenomena such as the reorganization of production and global economic integration. 

This paper reflects on the role of governance models and regulatory choices in the production of workplace vulnerability and emerging forms of insecurity for workers in the new economy. It considers in particular the emerging idea of ‘good governance' and the rise of labour market flexibility norms and their significance for workplace vulnerability. Rather than ‘solve' the problem of vulnerability at work, it aims to identify the main trends in governance and regulation that may affect the vulnerability of workers, to identify assumptions and concepts that are important to the direction of current legal and policy reform, to flag particular issues that bear attention and further investigation, to suggest what might be at stake for vulnerable workers in the regulatory options on offer and finally to pose some questions that should be at the forefront when policy and regulatory design is at issue. 

Much of the general debate around labour market policy and regulation is now focused on questions of enhancing the competitiveness of firms and the economic position of states as a whole. Enhancing the ‘human capital' of workers has been widely identified as central to this enterprise. Indeed, traditional concerns around worker protection, empowerment, and security are increasingly merged into the question of improving workers' skills and adaptability in the new economy.  Because this issue is now so salient in labour policy debates, this study considers the impact of human capital strategies on vulnerable workers. It also attempts to foresee the extent to which such strategies intersect with or diverge from equality concerns; by way of illustration, the study makes specific reference to the feminization of the workplace.

The analysis proceeds from the assumption that the increase in workplace vulnerability is not inevitable, at least to any pre-determined degree, nor need new economy jobs be inherently insecure. Even workplace flexibility is a goal that might be conceived, and furthered, in ways that benefit workers too. Rather, depending on how we respond at the level of law and policy and in the design of legal institutions, we can enhance or lessen the general degree of vulnerability in the workplace and intensify or ameliorate the divisions between protected ‘insiders' and vulnerable ‘outsiders' in the labour force.