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The liberalization of public services: Company reactions and consequences for employment and working conditions

Author

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  • Jörg Flecker

    (Forschungs- und Beratungsstelle Arbeitswelt (FORBA), Austria, flecker@forba.at)

  • Christoph Hermann

    (Forschungs- und Beratungsstelle Arbeitswelt (FORBA), Austria)

Abstract

This article analyses how companies that provide public services respond to liberalization, privatization and marketization. The empirical research is based on 23 company case studies from four sectors and six countries. The case studies involved 185 interviews with managers, trade union and works council representatives and workers. Company reactions include mergers and acquisitions, internationalization and the diversification of supply; the diversification of customer relations, including new pricing policies; a reduction of production costs through concentration, outsourcing and the introduction of new technology; and the reduction of employment and the payment of lower wages (through lower wages for new employees, the creation of independent subsidiaries and outsourcing). Overall, the case studies show that the main goal, the reduction of production costs, has been achieved at the cost of workers, many of whom have experienced liberalization and privatization as the deterioration of employment and working conditions. The impact on productivity and quality were mixed.

Suggested Citation

  • Jörg Flecker & Christoph Hermann, 2011. "The liberalization of public services: Company reactions and consequences for employment and working conditions," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 32(3), pages 523-544, August.
    • Handle: RePEc:sae:ecoind:v:32:y:2011:i:3:p:523-544
    DOI: 10.1177/0143831X10389201
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    References listed on IDEAS

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    1. Thorsten Schulten & Torsten Brandt & Christoph Hermann, 2008. "Liberalisation and privatisation of public services and strategic options for European trade unions," Transfer: European Review of Labour and Research, , vol. 14(2), pages 295-311, May.
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    Cited by:

    1. Simona Brunnerová & Jan Czarzasty & Marta Kahancová, 2025. "Creating public value in hostile conditions: public procurement as an opportunity for collective bargaining in Poland and Slovakia," Transfer: European Review of Labour and Research, , vol. 31(2), pages 179-196, May.
    2. Jonathan Preminger, 2016. "The contradictory effects of neoliberalization on labour relations: The health and social work sectors," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 37(4), pages 644-664, November.
    3. Lisa Dorigatti & Anna Mori, 2025. "The role of trade union power resources in experimenting with ‘buying decent work’: the case of the Italian public procurement protocols," Transfer: European Review of Labour and Research, , vol. 31(2), pages 215-232, May.
    4. Fabian Dekker & Ferry Koster, 2018. "Outsourcing in 18 European countries: The role of worker power," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 39(3), pages 481-499, August.
    5. David Beale & Stephen Mustchin, 2014. "The bitter recent history of employee involvement at Royal Mail: An aggressive management agenda versus resilient workplace unionism," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 35(2), pages 289-308, May.
    6. Cécile Guillaume & Gill Kirton, 2020. "Challenges and pitfalls for workplace unionism in a restructured public service," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 41(1), pages 212-228, February.
    7. Philip James & Alina M Baluch & Ian Cunningham & Anne-Marie Cullen, 2022. "Supply chain regulation in Scottish social care: Facilitators and barriers," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(3), pages 1319-1339, August.

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