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The Neoliberal Policy Shift’s Effect on the
Standard Employment Relationship and
a Gendered Labour Market
Nick Reed
212653416
April 4th, 2014
The standard employment relationship (SER) is often seen as the pinnacle of
achievement for any potential worker. It is not hard to see why; the benefits that are included
in the SER include overtime pay, notice of termination, public holidays, vacation leave and pay,
along with maternity and parental leave (Fudge & Vosko, 2001). However, the neoliberal policy
shift of the 1980s effectively disintegrated the SER as companies could no longer afford to offer
employees, unionized or otherwise, the gamut of benefits and entitlements that they had come
to expect. This policy shift included measures that gave more power to firms and saw a massive
cut in government regulation. Fudge and Vosko’s article examines the effects of this policy shift
through a gendered lens and concludes that this shift “combined with the deregulation of
labour policy underscore[s] the pressing need for new principles and policy options designed to
reregulate employment relationships and to revive the collective bargaining system and a new
‘gender contract’ that distances itself from old employment norms and recognizes the failings
(and false assumptions) of the old (and highly gendered) regime of labour regulation.” (Fudge &
Vosko, 2001) However, by carefully examining the gender wage gap, household labour
participation, and the duality of the labour market we can conclude that the neoliberal policy
shift has not hindered the economic progress of women.
The SER initially came about as unions gained more and more authority to provide
benefits for their members. However, the SER was primarily a normative model for male
employment, leaving women relegated to the secondary labour market, subsiding on access to
the male wage (Fudge & Vosko, 2001). The premise that women would be able to depend on
men for additional capital was an exclusionary aspect of the SER that left many women out of
the primary labour market. Because the secondary labour market often consists of part-time or
temporary work, this began an ongoing issue known as the gender wage gap. However, since
the SER has dissolved due to the neoliberal policy shift, there have been significant advances
toward gender pay equity. In an article concerning the gender wage gap in top corporate and
financial positions, Bertrand, Goldin and Katz were able to show that the wage gap is primarily
based on fundamental differences between how men and women apply themselves to the
labour market. Their study followed MBA candidates from a top US business school both in
school and in the labour market and observed the following statistics: hours worked,
experience, jobs held, career interruptions, sector, firm size, MBA courses and grades, and
finally the number of children combined with the allocation of childcare responsibilities. The
study followed 1856 men and 629 women and found that once the data was normalized to
group together men and women with similar traits (based on the criteria above) the wage gap
between them dropped to a statistical zero (Bertrand, Goldin, & Katz, 2010). Another
economist, Solomon W Polachek, examined the supply side of the female labour market. He
noticed primarily that the marital status of women had a profound effect on the wage that they
would earn, noting that single women had a gap of 18% compared to single men, and that
married women experienced a 60% pay gap (Polachek, 1995). Polachek’s investigation took
place in the 1990s, whereas data for Bertrand, Goldin, and Katz’s study came from the 1990s
and the 2000s, indicating that progress for women is still being made in spite of the absence of
regulatory reforms that Fudge and Voskos are calling for.
Participation in household labour is a subject of contention that many families deal with.
Using Spain as a case study, Carrasco and Dominguez were able to determine that new social
conditions, due to an increased female labour participation rate, only slightly modify men’s
behaviour at home, whereas women’s strategies for the provision of care changed significantly
(Carrasco & Dominguez, 2011). They noticed that women were still responsible for care, but
they externalize the commitment either via the market or by relying on family (Carrasco &
Dominguez, 2011). In Canada, the participation rate of housework and related non-pecuniary
labour for men has been rising from 77% in 2005 to 81% in 2010 (Stats Canada, 2013). An
important question to ask is whether or not there is any overlap in the responsibilities, i.e. if
men do 81% of the housework, with or without women involved. Fudge and Voskos make note
of the fact the female labour participation rate has been constantly rising since the 1960s and
70s (Fudge & Vosko, 2001). Combined with the women’s movement, there was pressure on the
government to pass legislation that promoted sex equality and child bearing aid to women with
employment (Fudge & Vosko, 2001). This legislation has not significantly changed since the
neoliberal policy shift, but I would argue that even if it were repealed, there would not be a
sudden surge of pregnant women losing their jobs. Especially in today’s age of information, any
company that fires a woman for being pregnant is liable to see serious public backlash that
would cost the company more than keeping on the female employee.
The labour market has been seriously divided both in the presence of the SER and
without it. However, the division of the labour market along gender lines is not necessarily a
systematic problem involving discrimination or any other malicious intent on the behalf of
employers. It is primarily based on the difference in decisions that face both potential mothers
and fathers. The proof for this claim is explained using a model of pay over time. For example, if
a female teacher, already earning a specific wage, were to take several years off in order to
raise a child to the age of 5, the cost of this venture is really only measured in time foregone
since the wage has no reason to change in the interim. Compared to an engineer, or other
technical professional, the cost of taking time off is an intense endeavour because of how the
technology changes and the subsequent adjustment of the industry. An engineer that is
unemployed for 5 years commands a lower wage upon their return because they have not kept
up with any new technological developments. Under the SER, this was not a problem for
women because of the assumption of access to a husband’s wages, as well as a significantly
lower female labour participation rate (Fudge & Vosko, 2001). It is also interesting to note that
as of July 2013, 85% of Canadians were represented by women at the provincial level, which
questions the idea that the abandonment of the SER has had a profound effect on the progress
of women in government (Babbage, 2013).
The neoliberal policy shift of the 1980s is very often vilified because of the noticeable
deregulation of industries and the substantial power loss experienced by unions. This
vilification is unfounded because, historically, unions were in fact strengthening the segregation
of members based on sex (Fudge & Vosko, 2001). Moreover, as the SER began to dissolve under
this policy shift, we saw that men and women began to experience closer rates of employment
and representation under the concept of poverty. Fudge and Vosko tabulate data that shows
the difference between men and women’s representation in full-time, full-year earners making
below $24,000 from 1984 – 1994. Both men and women age 18-24 have high participation
rates in this data, but it is worthwhile to note that the numbers are much closer to one another
in 1994 after the neoliberal policy shift has taken effect (Fudge & Vosko, 2001).
The dissolution of the SER cannot be interpreted as a malicious intent to keep women
confined to the secondary labour market. Rather, it was an adjustment that markets needed to
take in order to accommodate a greater female labour participation rate wherein women did
not have to rely on men for their economic dependence. The SER is an incredibly costly venture
for firms to undertake, and providing the incredible employment benefits that it is known for is
not something that all firms can afford to do. It is a grand fallacy to assume that firms in any
labour market somehow ‘owe’ their employees benefits at all. It is much more efficient to have
firms offer benefits of their own volition to attract quality employees, from both genders.
In conclusion, women are not being systematically forced into secondary, lower-paying
positions, especially not at the hands of a policy shift designed to give more freedom to
employers. Moreover, they are choosing to take jobs that suit them. This shows that the
neoliberal policy shift of the 1980s did not have an effect in hindering the progress of women in
the labour market.
Works Cited
Babbage, M. (2013, Jul 23). The Globe and Mail. Retrieved from Wave of Female Premiers Shifts
Leadership Tide at Summit: http://www.theglobeandmail.com/report-onbusiness/careers/careers-leadership/wave-of-female-premiers-shifts-leadershiptide/article13370317/
Bertrand, M., Goldin, C., & Katz, L. F. (2010). Dynamics of the Gender Gap for Young
Professionals in the Financial and Corporate Sectors. American Economic Journal:
Applied Economics 2, 228-255.
Carrasco, C., & Dominguez, M. (2011). Family Strategies for Meeting Care and Domestic Work
Needs: Evidence from Spain. Feminist Economics, 159-188.
Fudge, J., & Vosko, L. F. (2001). Gender, Segmentation and the Standard Employment
Relationship in Canadian Labour Law, Legislation and Policy. Economic and Industrial
Democracy, 271-310.
Polachek, S. W. (1995). Human Capital and the Gender Earnings Gap: A response to feminist
critiques. In S. Feiner, Out of the Margin: Feminist Perspectives on Economics (pp. 6179).
Stats Canada. (2013, May 22). Stats Canada. Retrieved from Father's Day... by the numbers:
http://www42.statcan.gc.ca/smr08/2013/smr08_175_2013-eng.htm