IV. The New Economy and Precarious Labor Markets

The turn to debt by the working classes was also propelled by the rise of precarious labor markets. Besides the demise of unions and *36 compression of wages, compelling corollary changes in the employment landscape have included the reduction of socially necessary labor, the rise of flexible contingent labor, and the growth of ever-vaster pools of free labor. In a new “age of the superfluous worker,” a growing segment of the working class forms part of the “precariat,” signified by jobs that are temporary, low-wage, and without benefits or protections. The contingent workforce includes independent contractors, contracted workers, leased employees, part-time employees, and temporary employees. Estimates of the numbers of contingent workers range between twenty to thirty percent of the work force. This “crisis of work” and “contingency explosion” issued from firms' drive to maximize labor market flexibility, changes in information technologies, the rise in forms of work that avoid employee status and its accompanying legal structures, and firms' desire to avoid unions. Fordist era forms of work, based on full-time employment, *37 clear-cut occupational assignments, and a career pattern over the life cycle eroded. Racial discrimination and the widespread availability of flexible peripheral labor markets combined to increase social inequality and marginalization. The rise of contingent work also directly contributed to the decline of unions and wages. As a result, an increasing portion of the workforce received less wages and benefits.

Revolutionary changes in information and communication technologies combined with changes in the organization of production increasingly changed the very nature of work and attendant social rights. Reduction of labor costs in both private and public sectors was achieved through lean production and outsourcing. While just-in-time production organized labor in the most flexible way possible to avoid accumulation of inventory, outsourcing helped avoid social costs of labor. With the demise of Fordist *38 and Taylorist production systems, direct command and control over the production process was increasingly substituted with marketplace command. Taylorist modes of direct allocation of tasks were increasingly replaced by indirect mechanisms based on imperatives to deliver and unavoidable pressures of precarization of the wage relation. The labor force had to adapt to the increasingly volatile process of value creation; indeed, the pressure was to constantly “reinvent oneself.” The just-in-time inventory management and optimal scheduling led to just-in-time labor. The working classes faced new market imperatives to be adaptable and “multivalent.” Flexible production produced flexible individuals who changed jobs frequently and whose social relations were increasingly transitory. As a result, a growing number of workers lived “neither inside nor outside the world of work, but along its margins. . . . [inhabiting] a new netherworld, the vocational purgatory of the ‘unjob.”’

In a financialized economy, “profit, like rent, increasingly depend on mechanisms of value expropriation that proceed from a position of exteriority in respect of the organization of production.” The new speculative profit-making rested on the value-making capabilities of “common work.” Labor practices made possible by new information *39 technologies expanded the scope of immaterial labor, helping to blur the line between work and non-work. As a result, increasingly processes of production of value traditionally confined to the place of work spread “throughout the whole society.” Here we see deployment of bio-labor: “life put to work, outside the times officially certified by private law.” The new order becomes one of externalization of the production process, of “crowdsourcing” and “unpaid labor” of the crowd. The consumer-as-producer phenomenon is part of this complex. Bagging one's own groceries and self-service at IKEA are emblematic examples of externalizing fixed and variable costs. Similarly, open-source information systems shift costs of labor to consumers through mechanisms like externalization of program evaluation, beta-testing, user technical assistance, and open-source program development.

The information/communication revolution resulted in the centrality of cognitive/non-material labor, the loss of the strategic importance of fixed capital, and the transfer of a series of productive-instrumental functions to the living body of labor-power. This rapidly unfolding phenomenon *40 is evocatively labeled “cognitive capitalism” Knowledge-based innovation and value-production by highly skilled precarious labor are distinct features of cognitive capitalism. Armed with new technologies, immaterial organizational systems “pursu[ed] workers in every moment of their lives [and] the work day, the time of living labor, is extended and intensified.” Modalities of value production moved “from factory to the social factory.” The information revolution procreated a new labor culture that had absorbed the need for liberty and informality born of the preceding cycle of social struggles, imported the dissolution of the borders between work-time and life-time from academic labor, and possessed the ideology of entrepreneurship. It produced a new economic model capable of generating value by mass use of the internet. In this realm, ubiquitous activities such as using a search engine, visiting a website, even carrying a cell phone that transmits the carrier's location, generate opportunities for enterprises to harvest value without costs.

”Skill-biased technological change” is a dominant explanation for inequality trends in the United States, with the computer/internet revolution and the failure of education to keep pace with the growing skill demands of the knowledge economy cited as the main reasons. Analysts discerned a “new digital divide” that runs along class and racial *41 divides and is marked by deep socio-economic distinctions between “the networkers the networked the switched-off” and between “the deciders the participants the executants.” In this context, higher education and incessant skills-development play an increasingly critical role in establishing an individual's ranking in the hierarchy of employability. At the same time, public education faced disinvestment, and the cost of education spiraled. As a result, reliance on debt for education and retraining soared. Surging above one trillion dollars, student-loans now exceed credit-card and auto-loan debt.

In the context of a financialized economy, with precarization of labor, demands for enhanced skills, and contraction of public support for education and re-training, increasing reliance on debt to re-train, indeed to live, becomes the only available option for the working classes.