ABSTRACT

Introduction Multinational companies (MNCs) are important economic actors in developed countries and even more so in developing markets, where they provide the capital and technologies necessary for modernizing old assets and contribute to the development of particular sectors or types of economic activity. They also have a destructive potential however, especially with regard to employment and working conditions. First, within the value chain of a large corporation, production and service work are no longer bound to a single locality; rather they can easily be shifted between sites. Consequently, production relocations carry the threat of inducing job losses at traditional industrial locations. Second, interplant rivalry often leads to the lowering of employment standards; this may be a result of unilateral management decisions, but it can also be a consequence of concession bargaining, whereby workers accept longer working hours, an unsafe working environment or lower pay in order to make their site competitive and attract new production. All in all, in the face of intensifying competition, MNCs seek to lower labour costs by taking recourse to practices that – according to the conceptualization developed in this book – may be considered to be social dumping. Current scholarly knowledge on MNC-driven social dumping is based on evidence coming from a limited number of industries. This chapter’s contribution rests in extending the analysis to steel and IT; in other words, to two sectors in which at face value one would not expect social dumping to occur. The steel industry is a traditional manufacturing sector characterized by high levels of social protection; for decades, trade unions have actively defended the interests of its (mainly male) production workers in all the examined countries. The segment of the IT industry studied here comprises only high-skilled services. Almost all its employees have academic degrees, are used to an individualized labour market and could, in principle, make use of individual exit options because their competences are in high demand (see also Boes and Kämpf, 2009). Both case studies are based on fieldwork conducted by the author in 2010 to 2013 (involving semi-structured, confidential expert interviews with HR managers, union and works council representatives, and national trade union officials) and on document analysis.1