Requiem or rebirth? Internal labour markets and labour market restructuring in the Kitchener and Sault Ste. Marie regions

Introduction Since the 1980s, social scientists and economic geographers have examined how 'standard' forms of employment have been displaced by non-standard arrangements such as part-time and temporary employees (e.g., Atkinson 1987; Noyelle 1987; Betcherman 1995; Allen and Henry 1997; Carnoy et al. 1997; Harrison 1997; Peck and Theodore 1998; Christopherson 2002; Theodore and Peck 2002). Underlying much of this literature is the argument that these changes represent a secular, if not epochal, shift towards a post-Fordist regime with declining employment tenures and the dissolution of internal labour markets (ILMs) in favour of contingent workers recruited on the external labour market (ELM) (e.g., Allen and Henry 1997; Christopherson 2002). However, other observers are critical of the assumptions of a universal shift in firm employment strategies and stress continuing significant national differences in employment tenures and standard/non-standard employment arrangements (Bowers and Martin 2000). As importantly, narratives of a 'golden age' of secure employment often ignore the majority of women and people of colour who laboured under highly insecure conditions (Smith 1999; McDowell 2002). Other researchers argue that in the United States, there may be structural and spatial limits to the extension of temporary and contingent work; they maintain that although ILMs have been significantly restructured, they have by no means been replaced by contingent work arrangements but remain an important, if not central, part of many firm employment strategies (Moss et al. 2000; Theodore and Peck 2002). In this paper, I focus on the contemporary role of ILMs. The paper is based on a postal survey and interviews conducted with ninety firms and institutions in Kitchener-Waterloo and Sault Ste. Marie, Ontario, in 1995-1996 that assessed changes to firm employment practices during the first half of the 1990s. This period was characterized by severe economic recession in the Canadian and especially Ontario economy followed by a slow recovery in output and employment (see Rutherford 1996; Gertler 1999). Although the survey reveals important changes in employment practices towards nonstandard arrangements, it also shows that employers are clearly aware of the need to maintain if not develop ILM structures. I also argue that geographers need to reconceptualize the relationship between ILMs and ELMs. Geographers have often focused on contingency and ELMs as phenomena analytically separated from the ILM and firm work organization. Employment contingency is driven primarily by lower labour costs and more permissive regulatory environments (see Allen and Henry 1997; Harrison 1997). There has been less attention to the role ILMs play in the organizational integration required for innovation and other firm goals. Following Grimshaw and Rubery (1998), my central argument is that firms do not use external/ contingent labour markets and ILMs in exclusion to each other but rather as part of a continuum of strategies which is leading to increased blurring of the ILMs and ELMs and a renewed emphasis on social and cultural skills. Second, rather than a simple ILM/ELM dichotomy, restructuring is leading to a number of different ILMs, each with its own relationship with ELMs. Finally, although less directly exposed to local labour market conditions, ILMs are not 'space-less' and through what Manwaring (1984) terms the extended internal labour market (EILM) are often strongly linked to the local labour market. Indeed, ELMs continue to be a determinant of the substitutability of labour within ILMs in ways that cannot be completely controlled by firms. Thus in both Kitchener and Sault Ste. Marie, geography continues to be an important determinant in ILM-ELM change, even though restructuring may have an eroded, some of the more distinctive heartland-hinterland employment contrasts which characterized their labour markets before 1980. …