Reproducing low‐wage labour: capital accumulation, labour markets and young workers

• Published date: 01 November 2017
• Author: Edward Yates
• DOI: http://doi.org/10.1111/irj.12195
• Date: 01 November 2017

Reproducing low-wage labour: capital

accumulation, labour markets and young

workers

Edward Yates

ABSTRACT

Drawing on evidence from Greater Manchester, this article examines how structural

changes in capital accumulation have created particular labour market outcomes,

which have led to young people becoming a source of cheap labour for the growing

low-wage service economy. Greater Manchester has been selected as a case study

because of the sectoral composition of its labour market and because levels of low

pay for young workers are above the national low-pay average of 40 per cent. The

research reveals that it is necessary to move beyond sociological explanations that

concentrate on the ‘essential youthfulness’of young people and instead draw on ana-

lytical categories from political economy in order to understand the structural causes

of young people’s material circumstances.

1 INTRODUCTION

This article explores the relationship between processes of capital accumulation and

the employment conditions of young workers. It aims to understand the labour

market conditions experienced by young people by situating these within broader

processes of political economy. This aim is achieved by focusing on the purchase,

sale and usage of the labour-power of young workers. This treatment is not a com-

prehensive coverage of all forms of youth labour in the contemporary economy. It

does not include, for example, enforced or trafficked labour, voluntary or unpaid

labour. By not including these types of labour, the aim is not to detract from their

significance in the contemporary economy. Rather, the aim is to provide greater

focus and clarity on the conditions of wage labour for young workers in contempo-

rary labour markets. The article seeks to advance understandings of young workers

in labour markets by answering two interrelated questions: first, what are the main

factors affecting the position of young workers in contemporary labour markets?

Second, how do these factors relate to processes of capitalist production? Existing

research suggests evidence of worsening labour market conditions for young

people

1

; the UK youth unemployment rate is currently 13.7 per cent, 2.7 times

higher than the all-age unemployment rate

2

(ONS, 2016a), and the youth

❒Edward Yates, Centre for Sustainable Work and Employment Futures, University of Leicester,

Leicester, UK. Correspondence should be addressed to Edward Yates, Centre for Sustainable Work and

Employment Futures, University of Leicester, Leicester, UK; email: ey29@le.ac.uk

1

Young is defined as aged 16–24. This definition is in line with ONS and ILO definitions.

2

All-age unemployment is 5.1 per cent, as of 2016.

Industrial Relations Journal 48:5-6, 463–481

ISSN 0019-8692

© 2017 Brian Towers (BRITOW) and John Wiley & Sons Ltd

unemployment ratio,

3

currently 20.2 per cent, is at an historical high in the UK

(O’Reilly et al., 2015). Similarly, whilst 21 per cent of all-age workers in the UK

are in low-paid employment, the number is 40 per cent for workers aged 21–25 years

and 77 per cent for workers aged 16–20 years (Clarke and D’Arcy, 2016: 20). Young

workers often find themselves ‘churning’between insecure or ‘precarious’work and

periods of unemployment (MacDonald, 2009; Standing, 2011), whilst recent re-

search by Gregg and Gardiner (2015) has shown a deepening of insecure employ-

ment conditions for specific segments of the labour force, particularly for young

workers in the UK. Their research demonstrates that ‘50% of 18-29 year olds were

insecure

4

in 2014, up from 40% in 1994’. This figure rises to 66 per cent when those

who are workless or unwaged are excluded, up from 55 per cent in 1994 (2015: 5).

Greater Manchester is a metropolitan county made up of 10 metropolitan bor-

oughs.

5

As of 2016, total employment is almost 1.3 million of which approximately

170,000 are aged 18–24 years (ONS, 2017). The county has been selected as a case

study because its labour market conditions reflect those of the UK more generally;

its labour market is characterised by low-waged employment in service sector occupa-

tions, alongside diminishing levels of employment across the public and manufactur-

ing sectors. Across Greater Manchester, there are large variations in numbers of

young people claiming Jobseeker’s Allowance (JSA); in February 2012, northern bor-

oughs of the county had an average youth JSA claimant rate of around 13.6 per cent,

whereas southern boroughs had a youth JSA claimant rate as low as 6.9 per cent. The

average for the UK during this period was 8.5 per cent (ONS, 2014). Incidences of

low-paid employment—defined as employment in which pay is two-thirds below the

median income—are higher amongst young workers in Greater Manchester than

amongst young workers nationally. In the North West region of the UK 57 per cent

of young workers are in low-paid work, compared with 52 per cent nationally (New

Economy, 2016a). In addition, hourly and weekly rates of pay for all-age workers

are 7.8 per cent below the UK average, with 22.5 per cent of all-age workers being

employed in low-paid work across Greater Manchester (an increase of 8.3 per cent

over a 10-year period). Furthermore, 10.6 per cent of workers have no formal quali-

fications, and wage inequality between areas of Greater Manchester is the highest of

any metropolitan area in the UK. The gap in average wages between the most affluent

borough and the least affluent is 26 per cent (Centre for Cities, 2009: 45; Harding

et al., 2010; ONS, 2014; LFS, 2015).

This article exposes the connections between the conditions of young workers and

the structural economic changes which have occurred in Greater Manchester since the

1970s, in what has become widely known as the neoliberal era (e.g. Harvey, 2007).

The analysis developed here can be contrasted with the different from dominant ap-

proaches in sociology, discussed below, which tend to regard young people’s material

3

The youth unemployment ratio is calculated by dividing the number of young unemployed by the number

young employed, unemployed and economically inactive. The youth unemployment rate, by contrast, is

calculated by dividing the number of young unemployed by the employed and unemployed. The former

is seen as a more useful figure when analysing youth unemployment as it takes into consideration young

people who are economically inactive, such as full-time students, full-time carers and those who are inactive

through illness.

4

Gregg and Gardiner (2015: 5) define insecure employment status as ‘not been in position long enough to

have various employment rights, or [being] relatively low paid’.

5

These are Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford and

Wigan.

464 Edward Yates

© 2017 Brian Towers (BRITOW) and John Wiley & Sons Ltd