This is overlaid since 1980 by the new labor market segmentation in which a

This is overlaid since 1980 by the new labor market

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This is overlaid since 1980 by the new labor market segmentation in which a substantial share of employment is organized into production networks of strong firms that can extract value and weaker firms unable to defend themselves or their workers. Although there is an overlap in these two types of labor market segmentation, employment in firms in production networks frequently consists of standard jobs not picked up in contingent worker surveys. Figure 1 illustrates the relationship between the two types of labor market segmentation. The increasing importance of networked production complicates the labor process. In a pro- duction network, the labor process is fragmented and engages workers employed in different organizations that occupy different positions in the network. Their labor is combined and their work coordinated via contracting relationships among more and less powerful employers that directly affect pay and working conditions. The workers themselves are separated by where in the supply chain or production network their jobs fall as well as by geographic distance. They have no organic relationships with each
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520 Review of Radical Political Economics 49(4) other that promote solidarity—common lunchrooms, common managers, common access to opportunities, common problems, and irritants—and generally do not recognize their common interests, much less join together to defend them. The wages of workers with similar skills and demographic characteristics will vary depending on whether they are employed in a more power- ful firm in the network and can share in the economic value captured by their employer or work in a less powerful firm in the network and have no such opportunity. 4. Value Extraction in Production Networks The inherent conflicts of interest between labor and capital within firms over the distribution of the value created in the labor process have not disappeared. However, they now exist alongside new opportunities for interfirm cooperation as well as new forms of capital-capital conflict among producers over the distribution of value created by the network (Marchington et al . 2005; Rubery 2007) as well as between producer and financial interests. As Rubery recognized, net- worked forms of production “complexify” the capital-labor relationship. Although collaboration among networked firms producing complementary inputs is essential for production, asymmetric power relations push in the opposite direction. Rent seeking is about conflict over distribution with results largely determined by differences in bargaining power (Folbre 2016: 28). Production networks produce goods and services, generate profits, and con- tribute to the size of the economic pie. Firms in the network may also generate economic rents. Power relations determine the distribution among these firms of the profit and rents created by the network. The pay of workers in a production network depends not only on their own skills and characteristics but also on their employers’ access to these rents.
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  • Test, Eileen Appelbaum, Radical Political Economics

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