Explaining workers’ role in illegitimate wage underreporting practice: Evidence from the European Union

an article by Josip Franić (Institute of Public Finance, Croatia) published in The Economic and Labour Relations Review Volume 30 Issue 3 (September 2019)

Abstract

Despite substantial endeavours of international institutions and governments around the world to promote decent work, recent years have witnessed resurgence of non-standard and precarious labour practices.

This article scrutinises one of the most recently described types of non-standard work, which is known as quasi-formal or under-declared employment.

Companies relying on this illegitimate strategy, which is particularly prevalent in Europe, deliberately misreport the take-home pay of their formally employed workers. Alongside the officially declared wage, a quasi-formal worker thus receives an additional cash-in-hand payment which remains untaxed.

To explore why so many European Union workers accept quasi-formal jobs in spite of obvious limitations, we report the evidence from interviews with 616 workers who were surveyed within the Special Eurobarometer 284/Wave 67.3. A two-level cumulative logistic regression emphasises tax morale and the exact function of the cash-in-hand payment as the key factors in this respect.

On the other hand, neither perceived detection risk nor expected penalties are found to affect the readiness of quasi-formal workers to keep obeying an illegitimate arrangement with their employer.

These findings therefore endorse recent studies on the matter, which illuminate low trust in the state and fellow citizens as the main reason for many workers to voluntarily misreport their income.

JEL Classification: E26, H26, J46

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The growth of precarious employment in Europe: Concepts, indicators and the effects of the global economic crisis

an article by Tomás Gutiérrez-Barbararusa (Rey Juan Carlos University, Madrid, Spain) published in International Labour Review Volume 155 Issue 4 (December 2016)

Abstract

Since the 1970s, the reorganization of production and neoliberal “flexibilization” have made employment increasingly precarious in the developed economies.

Examining the concept of precarious employment, the author focuses on two of its dimensions – insecurity and poverty – which he uses to construct a “precariousness index”. Based on Eurostat data for 1995–2015, he then tracks the growth of precarious employment across the EU-15 and assesses the impact of the 2008 global economic crisis in this respect.

While precarious employment generally increased after the crisis, this trend was driven more by poverty in the most deregulated labour markets and more by insecurity in the southern European countries.

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How the tax system is driving people into insecure work in unexpected ways

A guest blog in Touchstone by Meredith McCammond



I work for the Low Incomes Tax Reform Group, a group of tax and welfare rights specialists with expertise in the tax and related welfare issues of the low-paid. Often, people contact us describing their problems with tax, National Insurance, tax credits and interactions with other means-tested benefits. A good number of the problems have arisen in the context of non-standard ‘flexible’ forms of employment such as agency work, zero-hours contracts and self-employment.

What we are seeing in our work supports other evidence and research (including the TUC’s) showing that the numbers of people in such forms of employment are rising. While much intellectual debate to date has revolved around how National Insurance contributions reform might help reverse this trend, correspondence we receive into our mailbox from workers exposes that, in practice, there are wider aspects of the system driving workers into these precarious forms of employment.

We wanted to share this insight to help inform the debate and because, in our experience, reforms which tackle only part of the problem are rarely effective in the long term.

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Nearly 10 million Britons are in insecure work, says union

via the Guardian by Sarah Butler

Up to 10 million Britons or nearly a third of the UK workforce do not have secure employment, according to the GMB union, which has warned of a heavy impact on health and family life.
The union’s research, unveiled at its 100th annual congress in Plymouth on Monday, attempts to quantify people in what it calls precarious employment – those in the gig economy, on zero- or short-hours contracts, temporary workers, the underemployed and those at risk of false self-employment.
The data, based on a survey of nearly 3,500 people of working age, emerged before the publication this month of recommendations from Matthew Taylor, a former adviser to Tony Blair [and current chief executive of the RSA] who was appointed by the current prime minister to lead a review into the gig economy. He is expected to recommend changes to the rights of self-employed workers.
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The Role of Domestic Employment Policies in Shaping Precarious Work

an article by Merita Jokela (Department of Social Research, University of Turku, Finland) published in Social Policy & Administration Volume 51 Issue 2 (March 2017)

Abstract

This article compares policy approaches regarding domestic employment in affluent countries and examines their impact on precarious work. Drawing on secondary literature and policy documents, this study identifies five policy approaches commonly applied in affluent countries to regulate and develop domestic employment:

1. affordable services;
2. simplifying use;
3. regulating employment;
4. regulating labour migration; and
5. no policy. 

The comparative analysis of different policy types shows that policy design is crucial in regulating employment conditions and the level of precariousness in paid domestic labour.

Based on a literature review, three dimensions of precarious work are studied:

1. the nature of employment (formal/informal);
2. the employment relationship; and
3. the form of employment (temporary or permanent, part time or full time).

I argue that the current policy measures in place may increase precariousness either directly by promoting, for example, informal and irregular work, or indirectly through households (offering incentives for households that weaken workers’ positions).

The analysis also identifies positive measures that contribute to creating more secure employment conditions in domestic work through formalizing the sector. While there are differences in the outcomes of the different policy types, the findings suggest that across welfare states, domestic employment policies are still mostly demand driven and sustain the traditional, special nature of domestic work – often at the workers’ expense.

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Disability Accommodation in Nonstandard and Precarious Employment Arrangements

an article Kim M. Shuey and Emily Jovic (University of Western Ontario, London, Canada) Work and Occupations Volume 40 Number 2 (May 2013)

Abstract

This study, based on data from a large nationally representative sample of Canadian workers with disabilities, examines the relationship between employment arrangements and the accommodation of disability in the workplace.

We address whether workers with disabilities in nonstandard arrangements are more likely to have unmet accommodation needs and if other key dimensions of precarious employment mediate the relationship between nonstandard work and accommodation.

Results from multivariate models suggest that despite disability legislation, practices of workplace disability accommodation parallel the unequal distribution of other labor market protections, with workers in more precarious arrangements (i.e. those in non-permanent, low-wage, and nonunion jobs) at greater risk of having unmet needs.

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Dualism, Job Polarization, and the Social Construction of Precarious Work

an article by Steven Vallas and Christopher Prener (Northeastern University, Boston, USA) published in Work and Occupations Volume 39 Number 4 (November 2012)

Abstract

Publication of Arne Kalleberg’s Good Jobs, Bad Jobs provides a welcome opportunity to re-examine the theoretical and conceptual frameworks that scholars bring to bear on precarious employment.

An exemplar of what was once called the “new structuralism,” Kalleberg’s book provides a rigorous, multidimensional analysis of the changes impinging on job stability and security. Although it identifies a vitally important trend toward a growing polarization in the distribution of job rewards, it does so in ways that illustrate the limits of the genre of research to which it belongs.

Constrained to view the subjective experience of work as merely dependent variables, the book cannot explore how social, political, and cultural processes have both shaped and legitimated the rise of precarious employment.

Drawing on recent studies of the popular business press and other media representations, we document the rise of a culture of enterprise that has idealised the uncertainties that have come to grip the labour market, defining the latter as a site on which individual agency can freely unfold.

Only by addressing the interplay between job structures and such discursive and political developments can we hope to understand the rise of labour market precarity, let alone expand workers’ rights to protection against market uncertainty.

Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States, 1970s to 2000s by Arne L. Kalleberg (published July 2011) is available from the publishers the Russell Sage Foundation

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