The Fourth Industrial Revolution also invites us to reflect on the concept of stability. Different modes of formal labour and the concept of employability seem to be strongly linked to the concept of stability 4.0.

By Martin Padulla for staffingamericalatina

The Spanish Real Academy dictionary has three definitions for the adjective stable (from the Latin stabilis):

1. Adj. That remains without any dangers of changing, falling or disappearing. Stable temperature, economy.
2. Adj. That remains in the same place for a long period of time. Stable tenant.
3. Adj. That maintains or regains balance. A very stable car.

As regards the labour world, in Latin America, the idea of stable job has been linked to the classic 20st century labour relationship, which materialized through the typical permanent contract. In an already distant context of full employment and less sophisticated labour markets, our grandparents used to say that “a job cannot be refused to anyone”. The idea of permanent work seemed to coincide with the three definitions provided by RAE to adjective stable. It was the post-war era, in which the welfare state was at its peak.

The Keynesian model worked without major difficulties until the beginning of the 70s, mainly due to the economic growth of industrial societies. This enabled a strong development of employment and contributed to improve the social protection conditions. But, during the 1970s decade (yes, 40 years ago!), it started to become clear that the State faced difficulties to control inflation, reduce unemployment, and compensate the effects of the energetic crisis and the development of new technologies through the economic policy.

Several factors converged during that period of time:

• The processes of fast capital accumulation of the previous decades, were reduced due to the state’s lack of capacity to maintain and promote the production of a national market, increasingly more conditioned by globalization, which demanded a larger volume of resources to have an impact on it.
• Demographic changes due to the fall of the fertility rate and the increase of life expectancy led to an aging population that brought along a raise in social protection expenses.
• The end of Taylorism, as a process and way to organize work, and the influence of new technologies in the production system had an impact on organizations’ structures.
• The states’ financial crisis, which started lacking resources to face the demands of society regarding the expansion of welfare coverage, particularly during economic slowdowns, in order to reduce its effects on social protection and life quality.
• The undermining of the established political order, as the state no longer answers the expectations and demands of the different lobby groups, and of the general population. The extended economic slowdown that several economies have gone through has prevented public expenditure from been compensated by tax incomes, resulting in an elevated public deficit in most states.

This context partially explains why in Latin America, a region with elevated informality rates, there is a social perception of insecurity, even among formal workers with permanent contracts. It is key to re-define the concept of stability at work. Is a labour contract necessary? Yes, it is. Informality is a scourge that has a direct correlation with poverty. Is the permanent contract the only tool to eliminate labour informality? No, it is not. The Fourth Industrial Revolution, the economic cycles and the new economy demand other answers.

Stability for the individual, as a goal, is inalienable. However, it is necessary to reformulate the basis of stability for which a contract is no longer enough.

How can we achieve stability in a volatile, changing and disruptive context?

A first analysis shows that different types of contracts would expand the possibilities, without wearing social protection away.

A second analysis shows us that security and the possibility of developing a career are always linked to the evolution of the organization and the workers capacity to provide value, knowledge, experience, skills and adaptation to changes. The latter will become increasingly faster and more constant. For that, we need to involve the largest possible number of people who are linked to this problem, and generate frameworks that connect more education and work more fluidly and permanently.

A third analysis shows that this dynamic demands more flexible solutions within a legal framework, and that temporality has nothing to do with precarious work. The latter is unacceptable, it is linked to illegality and contradicts the ethical dimension of work. Precarious employment is identified, as ILO states, with limited or lack of social benefits and labour rights, high levels of labour insecurity, low wages and poor or null safety conditions, which risk the health or even the lives of workers. Obviously, we must include undeclared employment in this category, which is derived from informal economy and results in exclusion, losing rights, unfair competition, and damaging the public coffers, with the resulting impact that a vicious circle has. A spin off of this analysis is linked to the concept of flexibility, which from a biased perspective, tends to be associated to a loss of rights, to precarious work, or even to informality. The truth is that there are (and have been for quite some time) tools that combine flexibility, security and formality. Informality may be rigid and flexible, temporal and permanent, and in any case it must be tackle as it is the opposite of decent work.

Politics in Latin America should be clearer, more concrete and forceful on this topic. Political parties that claim to defend workers’ rights and even certain unions are not clear about informal labour, moved in a scenery filled with ambiguities and seem to defend a status quo that has been creaky for half a century.

Properly managed temporality, which involves professionalism and every guarantee provided through specialized companies with proper regulatory frameworks, must respond to specific needs, and has proven to be an efficient tool to tackle informality and unemployment. It has been a key element in the most dynamic and inclusive labour markets of the world to access the formal labour market, reconcile personal interests, gain experience, facilitate the adaptation of companies and individuals, or develop projects.

It will be up to the actors involved to turn this situation into a positive transition towards a deeper stability, granting a better adjustment between person and job, and vocational training based on the demand of the current and future labour market. Entire careers have been forged in several countries with this positive transition.

The 21st century stability seems to be strongly linked to employability. In a labour market that tends to formality, inclusion and training of skills based on the demand, it will be necessary to add new factors that guarantee security, development of citizens and easy access to the market.

Those companies which manage different forms of formal labour and that have being able to to become private employment agencies in markets with lower unemployment and informality levels, play this role. They are strategic allies in public employment services to channel active employment policies and provide stability and formality, contributing to social and economic progress in those countries.

This year, it will be necessary to promote the ratification of ILO Convention 181 in every country in the region, in order to modernize our labour markets, adapt to the needs of work 4.0, grow in inclusion and formality, and therefore get closer to the future of work.

About Martin Padulla

Founder and Managing Director of staffingamericalatina. Martin Padulla is Sociologist (USAL), MBA (UCA) and labour markets expert. He published “Flexible Work in South America” and “Regulatory framework for private employment agencies in Latin America” two books about the new realities of work in Latin America.

Follow Martín Padulla on Twitter: @MartinPadulla

mpadulla@staffingamericalatina.com

About staffingamericalatina

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