ABSTRACT
The lifetime employees in large companies are supplemented by a large, and growing, workforce of contract and temporary staff. These 'non-lifetime' workers (women who re-enter the labour market after having children; those in small and medium-sized enterprises; and older workers) provide additional flexibility to the operation of the labour market, and allow the larger firms to match their labour levels to demand (crucial where just-in-time delivery is the norm). Flexibility is also promoted by the subcontracting system which permeates the industrial structure.6 Both large firms and their suppliers benefit from the cooperative relationships which are such a feature of many industries. The large firms provide financial and technical support to their suppliers to promote improvements in productivity. When demand falls, however, the small firms bear a large part of the costs of adjustment. Orders are cut back, prices are reduced, and wage increases are limited. The large companies thus maintain their employment (and their competitive edge), whilst their suppliers adjust their production and their workforces accordingly.
