Hyunji Kwon(Professor, Department of Sociology, SNU),
Young-Mi Kim(Professor, Department of Sociology, Yonsei University),
Heiwon Kwon(Professor, Department of Business Administration, Dongduk women's university)
Source: Economy and Society. No. 107 (15) pp. 44-78. (Link)
This study looks into recent labor market changes in the growing service economy, applying a gender perspective. Rather than increasing high value-added industries, the new economy creates extensively low wage services where women are increasingly overrepresented, which consolidates gender inequality.
In trying to explain the sustained gender inequality and widespread low wage jobs for women in the contemporary labor market, this article builds upon the concept of ‘durable inequality’ proposed by Charles Tilly. It explains the relational process in which gender inequality has endured over time by the combination of organizational boundaries and the categorical distinction in which social norms are embedded. This process cannot solely be explained by market principles.
Focusing on the key role played by firm organizations as a major actor, we discuss how a firm’s structure and policies have influenced the process of durable inequality. Specifically, it explains the interactive mechanism through which the unequal labor conditions and disadvantaged status of women service workers are sustained and fortified by the intersection of firm practices and the hierarchical social category of gender.
Those firm practices include 1. employment practices of firms that create and consolidate gendered segmentation, 2. the hierarchical relationship within multi-firm production networks, 3. the customer service strategies based on ‘customer sovereignty’ that creates and strengthens the feudality of customer relations.
Keywords: labor, gender, durable inequality. low wages, service economy, employment practices, segmentation, outsourcing, hierarchical production networks, customer sovereignty, feudal customer relations
▶ The mechanism of how overconcentration of women in low-wage service jobs strengthens gender inequality in the labor market is explained with Charles Tilly's concept of “durable inequality”.
▶ The authors present the alternative analytical framework, pointing out the limitations of previous ones; technical determinism (neoclassic), neoliberalism and institutionalism explanation on the subject.
Of South Korea's total employment, the service sector accounts for 70 percent. This led to the creation of working poor, especially in the low-value-low-skilled service sector. Meanwhile, the gender wage gap in South Korea is quite high compared to other countries' cases as it is 37 percent in 2012. This is because the increase in women's employment has been mostly in low-wage jobs. In Korea, women labor is concentrated in the service industry, specifically in social services and individual services, which have a wider gender gap and occupational gender segregation.
Thus, the characteristics of Korea's transfer to a service-centered economy can be summed as 1) increased wage inequality, 2) expansion of the low-wage service sector and 3) high gender inequality. The authors state that existing theories have limitations in explaining all three phenomena in a single logic and put forward Charles Tilly's concept of 'durable quality' as an alternative, organization-level of the analytic frame for the long-term persistence and categorical inequality in Korea.
Labor Market inequality in Korea and Limitations of Existing Frameworks
Neoclassical economics – The theory of technology determinism claims a Skill-based Technology Change. It suggests that advanced technologies replace mid-skilled jobs that provided stable jobs for many people while improving productivity for high-skilled jobs and increasing their wages. However, as high value-added jobs are not expanding in Korea, this explanation is difficult to apply.
Neo-liberalism diffusion theory
From the progressive point of view, the neoliberalism diffusion theory interprets that regulations regarding labor protection and group association have been weakened and wage inequality has increased, as the influence of corporations has increased over that of institutions. On the other hand, the conservative view of the theory sees that the differentiation of workers has been reflected in wages, as they rely on market forces like personal skills rather than the institution. However, wages have not risen for high-educated women matching their (high) skill level, and the effects of wage inequality have also been biased toward women.
Finally, the institutionalism explanation - the Variety of Capitalism (VoC)- believes that different skill systems of coordination market economy (CMEs) and the liberal market economy (LME) had a different impact on women's opportunities in the labor market. In particular, in their view, there has likely been statistical discrimination against women with career disruptions as the coordinated market economy emphasizes the industrially specialized skill system. On the other hand, women's participation is relatively activated as the risk of investment is low in the case of low-skilled labor. According to the authors, however, if this viewpoint was applicable, more economic opportunities should have been given to highly skilled female workers as the country was reshuffled into a free market economy through the economic crisis. Moreover, the low-wage market continues to expand, especially for women, even though there are already several systems to ease wage inequality in Korea. Thus, it can be inferred that factors other than the institution may have caused the gender inequality of low-wage service jobs.
Long-term Persistence of Categorical Inequality and Practices of Korean Corporate Organizations behind
Durable Inequality: Organizational approaches to inequality
The authors instead build upon the concept of 'durable inequality' (Tilly, 1998), an organizational approach to the inequality problem. Durable inequality refers to the continuation of inequality that cannot be described as a market process, rather, as a combination with external non-economic and relational categories within an economic organization, which is assumed to be rational. Mechanisms for the transition from differences in the position of an organization to social inequality include exploitation - a hierarchical relationship that prevents a subordinate group from receiving the proceeds produced for the enterprise" - and opportunity hoarding - “an institutional process that limits competition within a group or class for privileges enjoyed by a social group or class." In sum, the essential point is that the (regarded as ‘rational’) category of authority in the economic organizations is combined with the culturally hierarchical group identity.
Also, resource integration (Tomaskovic-Devey, 2014) contributes to durable inequality, as there exists an unequal exchange relationship between companies in the pre-labor product market and there is a gap between the non-controlling companies with low resource and the dominant ones with more resource. In the case of South Korea, the hierarchical corporate network based on the subcontracting relationship also contributes to the low wage of the subcontractor-secondary labor market. And while so, the secondary labor market is also combined with the gendered category as skills are underrated according to the gendered division of labor.
Finally, the authors also incorporate the concept of ‘emulation’ and ‘adaptation’(Tilly, 1998), which are the organizational mechanisms that reproduce and strengthen inequality created by exploitation and opportunity hoarding. Corporate organizations reproduce inequality by emulation that minimizes coordination costs through accepting the established models and adaptation of actors; actors in subordinate positions have no other choice than accepting inequality.
Long-Term Inequality led by Employment Strategies of Korean Corporate Organizations
In short, the limitations of the existing frameworks can be summarized into this; by addressing only the traditional labor relations at a collective level, it is difficult to detect unique characteristics of recent inequality in service companies. In particular, it has been revealed the process in which restructuring, at first sight, seemed gender-neutral, contributes to the divisional structure of Gender inequality. As the category of gender strongly combined in the division of the labor market between full-time and temporary workers, the risk of outsourcing of female workers has increased as the temporary organizational sector has become a priority target for vertical disintegration. On top of that, the cost-oriented strategy of the contractor firms has been moved a significant portion of the burden to the subcontractors, which deepened the vulnerability of the subcontractor workers.
Conclusively, the paper analyzes the organizational practices that contribute to job quality of women-overrepresented, low-wage service sectors, in three dimensions.
1) Employment practices of firms that creates and consolidates gendered segmentation
Since the mid-1990s, many of the temporary workers in South Korea that have been created by the economic crisis have been women. ('feminization of contract jobs') It was driven by the patriarchal logic of the internal labor market that the income of male breadwinner should be protected. Furthermore, since the introduction of the law on the protection of non-regular workers in 2007, companies have formed a hierarchy of positions even within regular workers, and assigned women mainly to special jobs that are restricted in promotion and mobility. Consequently, more women have been assigned to disadvantageous positions to claim rights which were accompanied by the wage gap between men and women and between work segments. The authors explain that the combination of internal boundaries of firms (occupations, tasks) and external categories (gender) are because of the interaction of (1) hierarchical ways of organizing labor and (2) patriarchal organizational cultures strengthened by adaptation of actors(organizations) and resource monopoly between production networks.
2) The hierarchical relationship within multi-firm production networks
Secondly, the durable inequality has been persistent due to pre-modern hierarchy between companies. Subcontract companies such as the call center service, where women are concentrated, has spread even in the low-wage service sector, feature low wages, low working conditions and high turnover rate due to the deepening unequal distribution of resources between the original contractors and the subcontractors.
3) The customer service strategies based on ‘customer sovereignty’ that creates and strengthens the feudality of customer relations
Finally, customer service using identity-based customer relationships lowers the quality of labor of the low-wage service sector. The service sector in South Korea has forced service workers to obey over-emphasized consumer sovereignty, prompting consumers to abuse their authority. As a result, negative interactions with consumers directly or indirectly undermined the quality of jobs. Furthermore, the authors emphasize that the combined gender category, which assumes women's "care“ "kindness" and ”consideration“ taken for granted, has strengthened asymmetry between workers-customers.