Even before the ¡°Great Recession¡± of the late 2000s, declining social mobility and the shrinking middle class were recognised problems. Despite a great deal of hand-wringing by pundits and policymakers, these trends show little sign of reversing: inequality continues to grow, as economic recovery is slow to translate into real wage growth. There is broad agreement that these are problems in want of a solution, but analyses of their causes vary.

Here, David Weil argues that an important contributing factor is the growth of the ¡°fissured workplace¡±. His term captures changes in the organisation of employment, whereby large firms with recognised brands devolve responsibility for their workers to increasingly complex networks of suppliers and franchisees. These trends not only affect the lower-skilled or easily standardised jobs readily associated with outsourcing ¨C cleaning, hotel housekeeping and manufacturing assembly ¨C but have spread to higher skilled work and sectors such as law and the media.

Drawing on statistical sources, industry examples and company case studies, Weil describes a common trajectory of progressive fissuring in US workplaces ¨C with remarkably similar employment effects. New organisational models became popular starting in the late 1980s, premised on large firms slimming down to ¡°core competencies¡±. Pressure from capital markets to maximise ¡°shareholder value¡± increased incentives to cut costs. Technological advances lowered the expense (and risks) of coordinating complex networks of suppliers. Turning over responsibility for large areas of work to third parties became a proven formula for generating increased profits, and higher returns for investors.

If systematic violations of basic labour standards are tolerated, workers will be increasingly reluctant to speak out against them

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By now, we are used to hearing business leaders extol the virtues of replacing unwieldy bureaucracies with flexible market-based contracting. However, Weil convincingly argues that a major source of savings from these new organisational models comes from their success in cutting labour costs via downward pressure on pay and working conditions. The reasons may be complex, but they boil down to the ways in which workplace fissuring devolves responsibility for wage setting and compliance with labour laws and mandated employment benefits to companies and individuals operating in increasingly competitive environments.

Large firms are more likely to be unionised, or at least to have sophisticated human resource departments, and to devote resources to complying with health and safety rules and mandated social security benefits. They also tend to set wages above ¡°market levels¡±, owing to concerns with maintaining equity between groups. As such firms turn over responsibility for setting pay and conditions to subcontractors and franchisees, they limit their liability for complying with employment regulation while transforming the social aspects of wage setting into a pricing problem. This drives wages closer to economists¡¯ ideal market level, reflecting real differences in productivity and labour supply. However, it also generates externalities ¨C expanding poverty, insecurity and unsafe working conditions.

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The kinds of workplace fissuring discussed here ¨C subcontracting, franchising and global supply chains ¨C have been the subjects of a number of studies detailing the employment effects that Weil describes. The Fissured Workplace is unusual in bringing this research together into an integrated, detailed and decidedly policy-oriented analysis. Through linking organisational strategies that share an underlying logic, it makes a compelling case that workplace fissuring should be given a more prominent place in analyses of the causes of growing inequality. Along the way, Weil shows that fissuring constitutes a fundamental and formidable challenge to existing employment regulations.

One of this book¡¯s greatest strengths is in exploring how and why ¡°fissuring¡± occurs in diverse settings, as well as the complex ways that lead firms affect choices made by suppliers or franchisees. In case studies ranging from the building and maintenance of mobile communications towers to chocolate distribution, Weil shows how wages and employment conditions are subject to increasingly competitive market-based considerations. This increases incentives to pursue competitive advantage through breaking even the basic (by European standards) minimum wage, overtime and health and safety laws that exist in the US. Lead firms seek to limit their exposure to liability for violations, even while implementing very detailed quality standards and monitoring processes in other areas. Meanwhile, suppliers and franchisees in particularly competitive industries are faced with pricing schedules that cannot be met without violating minimum wage laws. In one example, Weil analyses prevailing market prices and costs in the janitorial franchise market to show that franchisees could not break even while complying with labour standards, much less turn a profit.

Weil¡¯s analysis of the scale and source of these problems informs a detailed discussion of how to solve them. This book is clearly rooted in the US context ¨C very little research from elsewhere is cited, and discussion of legal problems and policy solutions focuses on the US regulatory environment. However, the challenges associated with adjusting institutions designed to regulate large, vertically integrated firms to vertically disintegrated production networks will be familiar to European readers. A basic principle behind many of Weil¡¯s recommendations is that lead firms should be encouraged to establish the same degree of oversight of employment standards as they apply to ensuring compliance with service and product quality standards. He argues that accomplishing this shift would require changing definitions of employment and how responsibility for compliance with employment laws is framed, as well as more targeted monitoring.

The most interesting discussion addresses the question of how workers can be encouraged to speak out against poor pay and conditions where labour unions are weak or non-existent, and where basic workplace rights are increasingly violated. Weil uses the analogy of broken windows to make a point about the escalating social problems associated with tolerating small crimes: if one window is left broken in a building, all will soon be broken, as this is a signal that ¡°no one cares¡±. Similarly, if systematic violations of basic labour standards are tolerated, workers will be increasingly reluctant to speak out against such practices, or even to recognise them as abuses.

The message behind Weil¡¯s metaphor is that safe, healthy and well-compensated jobs are a social good worth pursuing, just like clean, crime-free neighbourhoods. He sees hope for ¡°fixing broken windows¡± in the efforts of labour unions as well as the workers¡¯ centres, community organisations and immigrant rights groups that have stepped in to help coordinate monitoring and enforcement.

Even as he acknowledges the scale of the problems created by workplace fissuring, Weil remains optimistic about the possibilities for balancing returns from these models to firms and shareholders with a degree of redistribution of these returns to workers. This faith in the possibilities for mutual gains skirts, to some extent, the broader trends driving restructuring that Weil identifies in his opening chapters ¨C including the seemingly insatiable appetite of financial markets for evidence of short-term cost savings and labour union decline.

Solving the fundamental problems associated with increasingly skewed power and resources is clearly beyond the scope of this book. However, it makes a convincing case that the better regulation of fissured workplaces is a first step towards reversing the erosion of pay and conditions at the bottom of the labour market.