Increasing Low-Paid Employment in Germany, Austria and Switzerland Between 1995 and 2011. Who Are the Losers of Recent Labour Market Flexibilization?

Since the 1980s, Western societies have been experiencing an increasing flexibilization of their labour markets, which led to a massive expansion of non-standard jobs. Interestingly, and this is the starting point for the present paper, there has been relatively little research done on this topic in German-speaking countries such as Austria, Switzerland and Germany over the 15 years. Taking up this research desideratum, we discuss the growth of low-paid employment in these countries.

For the empirical analysis, we use GSOEP, EU-SILC and SHP data from 1995 to 2011. Besides descriptive time series analysis, we present results from logistic regression models and decomposition analysis. Our results confirm a growing trend towards low-paid work in all three countries. Compared to Austria and Switzerland, the German rates of low-paid workers are quite startling (25% of all jobs in the labor market in 2012), indicating a substantial change in the historically dominant form of labour market regulations towards a liberal labour market regime. By contrary, Switzerland and Austria only show a moderate enlargement of the low-paid sector and therefore pursue the traditional path of strong regulation. Against this background we highlight the most significant differences and similarities at a national level and display historical trajectories of regulatory processes leading to the emergence of particular regimes of precarious employment.

Moreover, our analysis shows that risks of low-wage employment are not evenly spread across the workforce. In fact, we can observe strong and increasing inequalities between and within special groups.  Especially temporary work, part-time employees and workers with fixed-term contracts belong to the losers of the prevailing dynamics on the labour market in those countries. We conclude that the already disadvantaged workforce has to bear special risks produced by recent labour market changes.