Atypical and irregular employment in Southern EU cities:
resurgence of an industrial reserve army?
Abstract:
Labour processes across the EU are restructured in order to facilitate the recovery of
profitability. Diminishing wages, extending working time, intensifying work and
increasing the industrial reserve army of labour are normal means and outcomes of
this restructuring. However, the implementation of these restructuring policies are
necessarily uneven within EU regions due to unequal internal power relations and
different productive structures. In this frame, this paper studies atypical and irregular
employment in crisis-hit cities of Italy, Greece and Spain. Specifically, it focuses on
primary as well as secondary material collected from selected capital and port-cities
of the three Southern EU countries. The paper discusses the increasing significance of
an industrial reserve army, especially in the deprived cities like Thessaloniki and
Naples. The paper argues that what is more important than defining the potential
groups of workers that belong to the reserve army or its size, is to reveal how this
powerful segmenting mechanism is acting in favour of collective capitalist interests.
Keywords: Flexible and atypical employment, uneven development, regions, crisis,
Greece, Spain, Italy
1. Introduction
The implementation of labour flexibilization policies broadly follows the course
of capitalist accumulation; especially in the current era of crisis when devalorisation
accelerates1. Labour processes across the EU are restructured in order to facilitate the
recovery of profitability. Diminishing wages, extending working time, intensifying
work and increasing the pools of redundant labour are normal means and outcomes of
this restructuring. However, the implementation of these restructuring policies are
necessarily uneven within EU regions due to unequal internal power relations and
different productive structures. Flexible employment arrangements are as specific to
particular localities and time periods, at least as much as devalorisation is sensitive to
place and time (Smith, 1986; Gialis and Leontidou, 2014).
1
Economic crises in capitalism are essentially caused by falling profitability. The latter means that
accumulated capitals cannot be re-invested sufficiently profitably and thus a situation of
overaccumulation occurs. This signifies that accumulated capitals are greater than those that can
profitably re-invested under the given social and technical conditions (Barnett, 1998). The solution to
the overaccumulation crisis is the ‘destruction’ of part of the accumulated capitals which is termed as
devalorisation. For an overaccumulation crisis to be surpassed capitalism has to reinvigorate the
mechanisms counteracting falling profitability. One crucial such mechanism is the increased
exploitation of labour. The flexibilisation of labour is a powerful mechanism of increasing labour
exploitation and at the same time reducing labour costs (Mavroudeas, 2014).
In this frame, this paper studies atypical and irregular employment in crisis-hit
cities of Italy, Greece and Spain. Specifically, it focuses on primary as well as
secondary material collected from selected capital and port-cities of the three
Southern EU countries. The paper discusses the increasing significance of an
industrial reserve army, especially in the deprived cities like Thessaloniki and Naples.
Its floating part is comprised of all those who lost their jobs due to costs reductions.
Its latent part is either directly or indirectly pictured in the reproduction of solo selfemployment. Finally, the stagnant part comprises all of the poor and underpaid
atypical forms. The paper discusses these categories while argues that what is more
important than defining the potential groups of workers that belong to the reserve
army or its size, is to reveal how this powerful segmenting mechanism is acting in
favour of collective capitalist interests. It does so by dividing workers while making
those who still have a typical job more frightened and dispensable than in the precrisis period (Gialis and Herod, 2014).
2. Relations of production in capitalism
Wage labour is the founding relationship of the capitalist mode of production.
However, the forms and the conditions under which wage labour is performed are not
static but they change during subsequent historical periods. The greater part of the
20th century had been dominated by the belief that developed capitalism is associated
with a more or less fixed framework for employment. This belief has been rightfully
questioned since the eruption of the global capitalist structural crisis2 of 1973. The
course of the last century, when seen retrospectively, reveals that the predominance of
fixed employment was but a short period in the long history of capitalism. Full-time,
permanent employment, often seen as a byproduct of capitalism’s sophistication,
actually came at high cost for the working class, and only after fierce struggle. It is
often disregarded that flexible and precarious forms of employment never ceased to
exist as they are a powerful tool in the hands of the capitalist class in order to
‘discipline’ labour and to extract more surplus-value from it. Capital has always a
strong incentive to pay workers the least possible, have them work longer and more
intensively and bear as much of the costs of their social reproduction as possible.
Flexible and precarious forms of employment not only facilitate directly these aims
but they also pressurize indirectly fixed forms of employment to follow the same path
(Gialis and Leontidou, 2014, Mavroudeas, 2014).
Capitalism, after the heavy-handed restructuring that accompanied the 2nd World
War entered a ‘Golden era’ (1950—1973) (Lipietz, 1987). During this era and
because of the increased socio-political weight of labour it conceded an increase of
the part of fixed employment. This concession did not hinder capital accumulation as
the war had created ample space for increased accumulation and had boosted
technical progress and labour productivity. Thus, for a lengthy approximately 25years period increased fixed employment co-existed with vigorous capital
A structural crisis is one that signifies the exhaustion of capitalism’s historically specific structure and
dictates the need for its reorganization. Only then can capital accumulation proceed again vigorously
and smoothly (Mavroudeas, 2014).
2
accumulation. However, once this spree met its social and technical barriers falling
profitability and the resulting overaccumulation re-emerged (Barnett, 1998). The
global crisis of 1973 was the expression of this conundrum. The eruption of the crisis
led to a prolonged period of capitalist restructuring, that is of heuristical attempts by
capitalism to re-configure itself in a new sustainable form. This shift was associated
from the mid-1980s and onwards with neo-liberalism. An essential part of the neoliberal policies is the attack on workers’ rights and the flexibilisation and
precariousness of employment is a powerful mechanism for this. From the end of the
1990s capitalism moved from ‘national neo-liberalism’ to unleashed
internationalization of capital (or ‘globalisation’). The latter, coupled with laboursaving technological changes, increased international competition that pressurized
wages and stable forms of employment (Lipietz, 1987; Harvey, 2014).
3. The industrial reserve army
The profit motive (that is the quest for increased profits) defines the modus operandi
of capitalism. However, at the same time this quest carries with it the seeds of disaster as
the continuous increase of profits leads ultimately to overaccumulation (as the search for
extra profits by individual capitals sets in motion the tendency of the rate of profit to fall).
To put in a nutshell, for Marxism it is the system’s very success that leads to its failure. In
order to combat falling profitability, capitalists must activate counteracting economic
mechanisms (Marx, 2004). The increase of workers’ exploitation (expressed by the rate
of surplus-value) is a major counteracting mechanism (Marx, 2005). Labour flexibility is
a prominent measure for increasing exploitation. have to extract the highest possible rate
of surplus value from their workers Consequently, labour flexibility was always a
historical pursuit of capital (Bruno, 1979; Buzar, 2008). Of course, there exist
historical variations, that is flexibility is stronger during specific epochs and weaker
during others.
After the eruption of the 1973 crisis flexibility became one of the main
instruments of capitalist restructuring. As (Marx, 2004, ch.25:3) argues “there must be
the possibility of throwing great masses of men suddenly on the decisive points
without injury to the scale of production in other spheres. Overpopulation supplies
these masses”. This surplus labour is what we characterise as flexible labour today: a
surplus population of workers who have no equivalent rights and benefits as of those
working full-time.
Unlike what would be logical at a first reading, the absolute size of this labour
reserve and capital accumulation are directly proportional. Furthermore, the reserve’s
mass expands faster than that of the actively employed labour force (McIntyre, 2011).
“The greater the social wealth, the functioning capital, the extent and energy of its
growth, and therefore also the greater the absolute mass of the proletariat and the
productivity of its labour, the greater is the industrial reserve army” (Marx, 2004:
798).
The industrial reserve army is not a malfunction of capitalism but an ordinary and
predictable process (McIntyre, 2011). The reason for this is that the expansion of
capital and labour reserve share the same cause: the progressive devaluation of
capital. In periods of capital accumulation, if the organic composition of capital
stayed stable, it would be legitimate to assume that the demand for labour-power
would increase. But this is a non-realistic hypothesis, since accumulation favors
constant capital over variable; this happens because capital expands based on an
increasing productivity, and a crucial part of this is labour-power exploitation. This
increasing exploitation of labour-power is expressed through the progressive
devaluation of capital. Since capital expansion is based on the increasing exploitation
of variable capital and is enhanced by emphasizing variable capital, the demand for
labour-power falls behind the rate of accumulation. Therefore, the same elements
producing capital accumulation also expand the surplus laboring population
(McIntyre, 2011). Consequently, periods of crisis do not reveal novel patterns in the
expansion of these surplus populations, but affect the temporary fluctuations of their
mass, exacerbating the impact of capital devaluation, without in any case being a
fundamental cause of their growth (Marx, 2004).
Thus, the industrial reserve army of labour is always present in capitalism. What
changes from period to period is its size. Furthermore, workers that are thrown into
unemployment (that is become members of this industrial reserve of labour) do not
cease – at least to a great extent – to be part of the working class. The industrial
reserve of labour and the active working population are communicating vessels. Every
unemployed worker, who retains his working capacity, has a chance of being
recruited by capital again. Therefore, the unemployed, according to Marxist theory,
are also integral part of the working class (Peet, 1975, Clark, 1980).
The industrial reserve army is divided by Marx in three categories: the floating,
stagnant and latent. The floating part consists of workers working short periods of
time and then turning jobless again, depending on the oscillations of the industrial
production cycle. The latent part comprises this agricultural population that is on the
point of passing over into the urban and manufacturing proletariat. Flows of labour
force from rural areas to urban centers, preceding rapid urbanization processes, for
example in China, are signs of a latent surplus labour force. The stagnant part includes
all those employed under extremely irregular conditions; namely, the marginal
sections of atypical and undeclared employment. Those provide capital with an
“inexhaustible reservoir of disposable labour-power” as they work the longest and
paid the less. It comes from the redundant forces of – mainly decadent sectors of –
industry and agriculture and its mass takes up most of the industrial reserve army
(Marx, 2004; Grover and Piggott, 2005).
As it has been made clear already, the increase in industrial reserve army’s mass
goes hand in hand with capitalist accumulation. But the process of reserve’s
expansion is a complex one and shows important oscillations, due to the factors
pushing its relative size up or down. More specifically, those factors tending to
diminish the relative size of surplus population are the following. Firstly, the
increased demand for labour which leads to an augmentation of absolute employment
as capital accumulates. Secondly, those workers employed outside the dominant
circuit of capital; in other words, those employed outside capitalism’s set of relations
of production. Thirdly, capital’s increased need for reproductive labor (e.g. staff for
personal service). On the other hand, we have these factors tending to exacerbate the
“problem” of the industrial reserve army; technological breakthroughs, exponentially
growing population as capitalism evolves due to an abrupt decrease in death rates
(which balances out falling birth rates in the global north) and new sources of wage
labour created by capital expansion (McIntyre, 2011) (for example the latent part of
the reserve army which is “freed from the means of production” and “is forced to rely
on wage labor to survive) (Marx, 2004).
If our hypothesis concerned a closed economy, the factors decreasing the relative
size of surplus labour population would outweigh those increasing it, mainly because
the latter would meet their limits. Technological advances may not be labour saving in
all cases but rather capital saving. Moreover, some scholars support that there is no
proof that technological innovation causes absolute decline in the demand for wage
labour (McIntyre, 2011). Also, falling birth rates in the global north would dry out the
source of new young workers. Most importantly, this latent part of the surplus labor
force would eventually disappear as an entire labor market of a region submits under
the capitalist mode of production. In the long run, for a closed economy, capitalist
accumulation would produce increased demand for labour, wherein a problematic
supply of labour should lead to shrinking surplus laboring populations and upward
pressures on wages (McIntyre, 2011).
However, those tendencies created within the context of a closed economy can be
easily outweighed by an open capitalist economy. Even in the case of zero capital
export, an open market economy can spur surplus laboring populations. Firstly by
increasing the size of the population whose small size manufacturing activity cannot
compete with industrial products, secondly by creating (partially in consequence of
the previous point) inbound flows of migrant labor and thirdly by connecting to the
capitalist circuit, through market exchange, a “wide range of producers who do not
employ wage labor”. This spectrum of producers can be connected to formal economy
by exchange, even though it is “not characterized by capitalist relations of
production”. These relations include “slavery, sharecropping, encomienda, tenancy,
indentured servitude, long-term labor contracts, and debt peonage” (McIntyre, 2011,
p. 1492-93). If we count in the possibility of capital export, the ability of surplus
populations creation increases dramatically. Summarily, and as has been pointed out
above, the same forces enhancing the expansion of capital do favor the increase of the
relative size of the surplus labour army.
It should be highlighted that, the industrial reserve army is practically nonerasable in capitalism; it is a precondition of the capitalist mode of production (Bruno,
1979). This fact is related to four (4) important dimensions highlighted below:
Firstly, the redundant labour force is used for staffing emerging or rapidly
developing sectors of the economy, without this mobilization bearing negative impact
in other established spheres of production. Simply put, unemployment and
underemployment renders the labour force more flexible to fluctuations caused by
shifting demand patterns in the market or by technological breakthroughs which
change the mode of production substantially. This need for more flexible responses to
shifting demand may have been an imperative of the post- 1973 crisis era and a
seemingly logical justification of the expansion of flexible employment, but it was
highlighted some two centuries ago by Herman Merivale (1841, 1842), professor of
political economy.
“[S]uppose that, on the occasion of some of these crises, the nation were
to rouse itself to the effort of getting rid by emigration of some hundreds of
thousands of superfluous arms, what would be the consequence? That, at the
first returning demand for labour, there would be a deficiency. However
rapid reproduction may be, it takes, at all events, the space of a generation to
replace the loss of adult labour. Now, the profits of our manufacturers
depend mainly on the power of making use of the prosperous moment when
demand is brisk, and thus compensating themselves for the interval during
which it is slack. [...] They must have hands ready by them, they must be able
to increase the activity of their operations when required, and to slacken it
again, according to the state of the market, or they cannot possibly maintain
that pre-eminence in the race of competition on which the wealth of the
country is founded.” (Merivale, 1841:146)
This sudden mobilization of workers does not only concern periods of crises, but
regular phases of the industrial cycle. Amid crises though, the role of the industrial
reserve labour, in conjunction with new technologies, is crucial. Kondratiev drew that
connection when writing that crises in capitalism occur in a periodic fashion (Barnett,
1998). Capitalism overcomes those crises through technological advances. Therefore,
emerging sectors need a bulk of labour force immediately, and not at the expense of
other up and running sectors.
Secondly, the industrial reserve army has been used to keep the aspirations of the
active part of the labour force low (that is as a disciplining mechanism). “The function
of this reserve is to supply the labour-power required for future expansion of capital
while acting as a dead weight upon the aspirations of those already employed as they
struggle to improve rates of remuneration and working conditions” (Harvey,
2014:110). Capital imposes the active part of the labour force unto direct competition
to this reserve army and reaps numerous benefits. While being disheartened, the
labour force tends to overwork, further increasing the relative size of surplus labour,
has fewer claims – even in times of prosperity –, and is willing to bear the costs of its
own reproduction uncomplainingly; all in all it stays docile and disciplined. For all
those reasons, it is very convenient for capital to create and sustain such a surplus
population. In cases where this reserve does not exist, capital has to create it by
gaining access to underused or unused labour markets, such as those of China, Asia
and Africa (Harvey, 2014).
If we follow the General Law of Capitalist Accumulation inversely, we will see
that higher the share of the industrial reserve army, higher the official pauperism. And
as the industrial reserve army’s share expands, capital accumulates. Keeping the
active part’s aspirations low is therefore suggested to be a key factor in the
accumulation process.
Thirdly, through the industrial reserve army, capital manages to “detour” the law
of supply and demand of labour and regulates wages in an alternate fashion. Instead
of following the ratio of supply and demand for labour, capital affects wages in
formal economy through comparison to adjacent countries and the informal economy.
The key here is to understand how the industrial reserve lives when unemployed.
When reserves come from rural regions, when losing their “urban” work return to
their home place and live as they have traditionally done. This particularly is a
paradigm we encounter a lot in Greece during the last six years, even though these
flows of deurbanization do not fall out of the circuit of the capitalist mode of
production. When migrant labourers from adjacent countries lose their job, they return
to their country of origin (e.g. Mexicans in the US, Albanians in Greece). The
previous two examples (migrant and formerly rural labour) obviously do not apply for
entire families which migrate to urban areas. The active members of those engage
with the rising informal economies and sustain life on marginal terms (Wilson & Keil,
2008). The stagnant part of the reserve army, when unemployed usually makes a
living however possible in the urban slums (Harvey, 2014). Specifically in the
European South, family income sustains multiple members when unemployed or
underemployed. This way a reserve army reproduces itself at its own expense
practically, while being constantly available to capital.
All the previous lead to the creation of a “benchmark of poverty”, which is
substantially lower than actually the average one, as we can easily realize by looking
at the term of “poverty line”. What happens is that capital defines a cost of living
which is directly influenced by the reality of the informal sector, however forming a
lower bound for the formal sector, since workers of those marginal layers can be
easily recruited (Harris, 1993).
Last but not least, the industrial reserve labour, is not only used to “detour” the
law of supply and demand of labour, but also to distort it. It is commonly believed
that wages rise while capital accumulates, the increase in wages stimulate a faster
reproduction of labour until the supply of labour exceeds the demand. Then wages fall
and the aforementioned process takes place inversely. Falling wages and a more
intense exploitation of the labour force accelerates accumulation, until a time comes
again when supply of labour is less than the demand. This line of thought is based on
the fact that in capitalism, labour-power is bought and sold like any other commodity.
However, as it happens, there are elements distorting this fine balance achieved by
supply and demand correlation. One serious drawback of this argument is that it
overlooks the emigration of labour between sectors and the crucial reason why the
reserve is necessary (to man emerging sectors). Marx fiercely attacked his
contemporary political economists (like Ricardo) for that in this process, they only
saw “the local oscillation of the labour-market in a particular sphere of production
[…], only the phenomena accompanying the distribution of the working population
into the different spheres of outlay of capital, according to its varying needs” (Marx,
2004, ch. 25:3). He reached the remarkable assumption that the relative surplus
population is the pivot upon which the law of demand and supply of labour works, as
it “confines the field of action of this law within the limits absolutely convenient to
the activity of exploitation and to the domination of capital” (Harvey, 2014).
Concluding, capital works on “both sides at the same time”. When accumulation
increases the demand for labour, supply is augmented by gaining access to unused
sources of labour. Simultaneously, the very existence of reserve labour, forces those
working to increase their productivity, to overwork. This way, capital makes “the
supply of labour, to a certain extent, independent of the supply of laborers” (Marx,
2004, ch. 25:3). The circulation of labour-power as a commodity in this sense – as
“artificial” as it may be – expresses the hegemony of capital.
4. Capitalist crisis and progressive devaluation of capital
We saw earlier that economic crises do not alter the patterns of industrial reserve
army fluctuation but just exacerbate its temporal oscillations. Here we will see how
economic crises relate to labour.
Value is a central concept in capitalism as the surplus product (which is the source
of profit for the capitalist class) is extracted and realized in the form of surplus-value.
This process manifests the capital - labour relationship in the capitalist mode of
production. Furthermore, value is the “social expression” of human labour. The very
notion of value though, implies the possibility of crisis (Smith, 1986). There are three
sets of processes regarding accretion or diminution of value (Marx, 1974, 2004,
2005): appreciation/depreciation, which occurs only in the price sphere,
valorisation/devalorisation, which is about the movement of value inherent in the
creation and circulation of capital and revaluation/devaluation, which occurs solely in
the value sphere.
What is of importance for this paper, is the last set of processes:
revaluation/devaluation. In contrast to the previous two sets, this does not concern a
mere increase or decrease in price (like appreciation/depreciation), but an absolute
augmentation or destruction of value. Devaluation takes place when the general
capital of a sector of production or a whole region of the global economy goes
through a generalized loss of value. Devaluation is a “historically dominant process”,
unlike revaluation, and is conduced by two main sources: progressive and periodic
devaluation (Smith, 1986). The first one, simply put, is an inherent tendency and
results from the necessity of perpetual increase in the productiveness of labour. The
second one, periodic devaluation, is the abrupt devaluation taking place amid crises
and affects all forms of capital (commodity, money, productive capital).
As mentioned above, the possibility of crisis is implied in the constitution of the
structure of value. Devalorization, the interruption in the movement of value (inherent
in the creation and circulation of capital) merely implies the possibility of crisis. The
realization of crisis is about the progressive devaluation of capital.
Wage labourers and jobs lost
Metropolitan
Area
Region
Total in
thousands
2008
Total in
thousands
2011
Total in
thousands
2013
jobs lost 20082011
jobs lost (%)
2008 wage
labour
jobs lost 20112013
jobs lost (%)
2011 wage
labour
Attica
Cen.
Macedonia
Athens
1389.0
1201.4
1013.6
187.6
13.5%
187.8
15.6%
Thessaloniki
Madrid
Madrid
Cataluña
Barcelona
Lazio
Rome
471.5
2694.0
2967.1
1720.3
1212.9
399.0
2499.7
2705.2
1744.2
1136.4
330.4
2384.5
2527.5
1705.6
1149.3
72.5
194.3
261.9
-23.8
76.5
15.4%
7.2%
8.8%
-1.4%
6.3%
68.6
115.2
177.7
38.6
-12.9
17.2%
4.6%
6.6%
2.2%
-1.1%
Campania
Naples
Table 1: Estimating the floating part of the industrial reserve army: wage labourers and jobs lost, 2008-2013
Temporary workers that could not find a permanent job
Region
Metropolitan
Area
Attica
Total in
thousands
2008
Total in
thousands
2011
Total in
thousands
2013
Change (%)
2008-11
Change (%)
2011-13
% of wage
labour 2008
% of wage
labour 2011
% of wage
labour 2013
Athens
86,4
88,7
37,2
2,7%
-58,1%
6,2%
7,4%
3,7%
Cen. Macedonia
Thessaloniki
43,2
34,4
30,2
-20,2%
-12,3%
9,2%
8,6%
9,1%
Madrid
Madrid
391,9
410,0
321,8
4,6%
-21,5%
14,5%
16,4%
13,5%
Cataluña
Barcelona
489,8
462,9
435,4
-5,5%
-5,9%
16,5%
17,1%
17,2%
Lazio
Rome
128,9
137,7
143,5
6,8%
4,2%
7,5%
7,9%
8,4%
Naples
134,5
134,6
148,8
0,1%
10,5%
11,1%
11,8%
12,9%
Campania
Table 2: Estimating the stagnant part of the industrial reserve army: temporary workers that could not find a permanent job, 2008-2013
Solo self-employment
Region
Metropolitan
Area
Total in
thousands
2008
Total in
thousands
2011
Total in
thousands
2013
change 20082011
change (%)
2008-2011
change 20112013
change (%)
2011-2013
Attica
Cen.
Macedonia
Athens
114,0
85,8
80,1
-28,2
-24,8%
-5,7
-6,6%
Thessaloniki
72,7
56,8
40,3
-15,9
-21,9%
-16,5
-29,0%
Madrid
Madrid
127,6
110,4
96,1
-17,2
-13,5%
-14,3
-13,0%
Cataluña
Barcelona
204,6
154,6
138,8
-50,0
-24,5%
-15,7
-10,2%
Lazio
Rome
108,8
120,0
123,0
11,1
10,2%
3,0
2,5%
Naples
116,8
101,7
106,5
-15,0
-12,9%
4,7
4,7%
Campania
Table 3: Estimating the latent part of the industrial reserve army: solo self-employed persons, 2008-2013
Unemployed persons and new unemployed
Region
Metropolitan
Area
Total in
thousands
2008
Total in
thousands
2011
Total in
thousands
2013
new
unemployed
2008-2011
change (%)
2008-2011
new
unemployed
2011-2013
change (%)
2011-2013
Attica
Cen.
Macedonia
Athens
127.5
338.2
527.5
210.7
165.3%
189.3
56.0%
Thessaloniki
Madrid
Madrid
Cataluña
Barcelona
Lazio
Rome
Campania
Naples
70.1
295.0
349.6
182.3
241.9
160.0
564.4
760.0
218.9
288.0
239.0
669.5
893.2
310.0
430.2
89.9
269.4
410.4
36.6
46.1
128.2%
91.3%
117.4%
20.1%
19.1%
79
105.1
133.2
91.1
142.2
49.4%
18.6%
17.5%
41.6%
49.4%
Table 4: Estimating the industrial reserve army: unemployed person and new unemployed, 2008-2013
Capital inherently seeks its expansion (because of competition), but it can expand
only if the organic composition of capital increases so fast – that it is logical – that
labour-power is systematically diminished. Solely the valorization of fixed capital, the
technological advances and the instruments of production, cannot sustain a sufficient
growth of the organic composition of capital. It is dictated by the need of increasing
productivity that variable capital has to be constantly devalued. However, the increase
in the organic composition of capital results to a falling rate of profit (Mavroudeas,
2014).
Capital moves away from sectors and regions where a falling rate of profit
initially appears (Clark, 1980). However, when moving away from its original source,
it cannot valorize itself but at the expense of capitals in sectors and regions where,
possibly, the rate of profit is also falling due to increasing competition. The
generalization of this falling rate of profit “crowds out some capitals, forcing them to
be partially or completely idle” (Smith, 1986: 20). What we see here is that
progressive devaluation of capital leads to a higher level periodic devaluation and a
devalorization of capital (interruption in the circulation of capital). This is the process
of over-accumulation (through endless seek for expansion), which consequently leads
to the depreciation of commodities in the market.
Summarily, progressive devaluation leads to periodic devaluation and
devalorization (both described by the process of over-accumulation), which in turn
lead to depreciation of capital (Marx, 2005). This chain is somewhat the opposite of
the consumptionist theory, where underconsumption/overproduction lower
commodity prices and this leads to an interruption of the production process, and
eventually a crisis.
5. The industrial reserve army nowadays: the case of crisis-hit Southern EU
cities and regions
When Marx wrote Capital, employment and relations of production were much
different than today. Typical employment in the sense that is meant today (i.e.
regulated, long-term employment for five days and a total of forty hours per week)
did not exist, as did not atypical employment. Yet, Marx distinguished the active part
of the labour force from the reserve army.
This paper suggests that, nowadays, the floating group may be comprised of all the
unemployed who lost their jobs due to technological advances or were replaced by cheaper
labor. The latent group is mainly underemployed labour found in primary sector activities
that have been marginalized by intensified industrial production. Lastly, we can trace the
stagnant group among those employed under very irregular conditions; precarious and
informal employment. These labourers are usually fall under part-time, seasonal and
temporary employment norms that are deprived of important security aspects, while
being underpaid in comparison to the average wages of the ‘typical’ workers.
We also suggest that, defining the industrial reserve army is not reducible to
empirically observing and measuring the groups that it is comprised of; rather it has to
do with defining how the reserve army is derived from capitalist expansion (i.e. how
and where it increases while the organic composition of capital is increasing) (Clark,
1980, Dorre, 2010). We these remarks taken as granted, below an empirical account
of the industrial reserve army in contemporary regions of the crisis-hit3 Southern EU
is below attempted.
As obvious from Table 1 the floating part of the industrial reserve army has
largely increased during the crisis period. Thousands of wage-dependent workers lost
their jobs across all regions under study, with the exception of the region of Lazio
(Rome) which kept its number of employees between 2008 and 2011. The largest
reductions are in Greece where for both periods under study almost 15% of jobs in
Thessaloniki and Athens where destroyed (see Table 1). Following Greece, but on a
less intense pace, Spanish regions suffered a loss that is close to 8% between 20082011 and approximately 5% between 2011 and 2013 (Gialis and Leontidou, 2014;
Gialis and Herod, 2014).
Table 2 reveals that very precarious atypical jobs, such as involuntary temporary
employment, are slightly increasing their share in four out of the six regions, despite
they are also highly affected by the crisis. This is an unavoidable results of the fact
that certain firms prefer to reduce their permanent labour force and hire more
temporaries, while other tend to dismiss more of their temporary workers in order to
avoid the (relatively) high costs of permanent personnel compensation. Making
temporary workers redundant means that in some regions, such as the Greek ones, the
relative share of the stagnant part of the industrial reserve army may decrease,
favoring an increment of the share of the floating part.
At the same time, solo self-employed persons, such as those that run very small
traditional businesses that are thrown out of the market or face bankruptcy highly
increase, as revealed from data on this latent part of the industrial reserve army (as in
Table 3).
All these lead to huge increments of unemployment and thousands of new
entrants that enroll in the unemployment lists. There are regions, like the Greek and
Spanish ones that have an increase in unemployment that is equal or even larger to
100% between 2008 and 2011. This pace remains extremely high (i.e. close to 50%)
for the Greek and the Italian regions between 2011 and 2013 (as in Table 4).
6. Conclusion
The significance of the industrial reserve army is increasing across crisis-hit
Southern EU, especially in the deprived cities like Thessaloniki and Naples. Its
floating part, comprised of all those who lost their jobs due to capital devaluation,
bankruptcies and costs reductions, has largely increased leading hundreds of
thousands of people to unemployment and precariousness, as seen from the cities
3
GDP data reveal an ongoing devaluation of the economies of Mediterranean EU countries. According
to Eurostat’s data between 2008 and 2013, the Greek nominal GDP has been reduced by more than
20%; the Italian and Spanish reductions are modest when compared to the Greek fall (Gialis and
Leontidou, 2014).
discussed above. Its latent part, either directly or indirectly pictured in the
reproduction of solo self-employment, lost much of its capacity, especially in cities
like Thessaloniki, yet still retains its dynamism. Finally, the stagnant part, comprised
of the poor and underpaid atypical forms, is subjected to controversial trends as it
increases in some regions while it is being reduced in others.
The crisis and political responses to it are weakening Southern EU’s already
disempowered economic status by multiplying public deficit, pushing small
entrepreneurship to collapse and prevailing industries to shrink. A clear example is
observed in the case of Attica/ Athens and Central Macedonia/ Thessaloniki’s regions,
where tertiarization and falling construction affect employment structures; it is also
prevalent in Madrid and Barcelona, where tourism and falling industrial production
produce labour market dismantling. In all these cases, the further flexibilisation of the
labour market is not a way to overcome employment rigidities and generate new job
opportunities – as it, it marginalizes more integrated and established atypical
employment forms and expands the more fragile ones.
The austerity measures and the cuts imposed upon wages and pensions pose a
threat on the available family income. This challenges a basic, though divergent from
the Northern patterns, welfare pillar of the Southern EU countries. Extended support
networks among the family members and kinship are loosened and social security in
the urban fabric and abroad is under threat. Economic support of the younger
members of the households until their mid-30s, living with parents, taking care of the
elderly, combination of formal with informal employment and income sharing along
with family duties, are all aspects of an existent pattern that is currently deconstructed, if not destroyed, as support among the members of extended kinship
networks cannot be further sustained. The supporting role of the family was in many
cases complemented by voluntary and community support and the long-lasting selfemployment or micro-entrepreneurship for at least one member of the household (in
most cases the husband/ father). These networks of protection are dismantled leading
to increased poverty and fragile patterns of social reproduction.
Such social dynamics are also prevalent when the huge rates of youth
unemployment and the relatively high shares of females/ youngsters that are
precariously employed or seek work are examined. The momentum that
unemployment is gaining is also an indirect sign of the weak social policies in
Southern cities and regions, as in the case of Greece where less than 20% of the
almost 1,2 unemployed workers (data for late 2014) are receiving any unemployment
benefit. All these changes are encouraging outward mobility of both the natives and
the immigrants, and are turning Southern regions from immigrant-hosting to migrantsending labour markets.
Within this framework, the industrial reserve army is a powerful segmenting
mechanism that is acting in favour of collective capitalist interests. It does so by
dividing workers while making those who still have a typical job more frightened and
dispensable than in the pre-crisis period.
Acknowledgments. This work is part of the “The Southern EU flexicurity project”.
The research project “The Southern EU flexicurity project” is implemented within the
framework of the Action «Supporting Postdoctoral Researchers» of the Operational
Program "Education and Lifelong Learning" (Action’s Beneficiary: General
Secretariat for Research and Technology), and is co-financed by the European Social
Fund (ESF) and the Greek State (Funding Decision: 11409/31-8-2012).
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Short Biographies:
Stelios Gialis is a post-doctoral researcher in Hellenic Open University and University
of Georgia (joint affiliation) as well as an Assistant Professor of Regional Geography
and Development in the University of Aegean, Greece. His research interests include
Labour Geography, Regional Development and Flexible work and he has published in
various journals like Geoforum, International Journal of Urban and Regional
Research and Capitalism, Nature, Socialism.
Stavros Mavroudeas is a Professor of Political Economy in the University of
Macedonia, Greece. He is the author of ‘The Limits of Regulation: A Critical
Analysis of Capitalist Development’, Cheltenham: Edward Elgarand and the editor of
‘Greek capitalism in crisis: Marxist Analyses’ published by Routledge, while he has
published in various journals like Review of Radical Political Economics and
International Critical Thought.
Kostas Gourzis is and Urban and Regional Development Engineer, Dipl. Eng, MSc
and an associate researcher in the University of Aegean Greece. His main interests
include Labour Geography, Regional Development and Urban restructuring while he
has published his work in various conference proceedings and journals.