The state, employment, and regulation: making work not pay

Purpose The purpose of this paper is to examine the role of specific active labour market policies (ALMP) and increased use of zero hour contracts (ZHCs) in creating an environment in which low-wage jobs flourish. Alongside these, it examines the role of financialization over the last 30 years in fostering the nuturalization of policies that institutionalize low wages and deregulate the economy in favour of big business.

Design/methodology/approach This paper draws upon academic literature, official statistics, and analyses via the concept of neoliberalism.

Findings This paper demonstrates that via a set of interconnected macro and micro factors low pay is set to remain entrenched in the UK. It has demonstrated that this is not the result of some natural response to labour market demands. Far from it, it has argued that these policy choices are neoliberal in motivation and the outcome of establishing low pay and insecure employment is a significant character of the contemporary labour market is deliberate.

Research limitations/implications This paper encourages a re-think of how the authors address this issue of low pay in the UK by highlighting alternative forms of understanding the causes of low pay.

Practical implications It presents an alternative analysis of low pay in the UK which allows us to understand and call into question the low-pay economy. In doing so it demonstrates that crucial to this understanding is state regulation.

Social implications This paper allows for a more nuanced understanding of the economic conditions of the inequality caused by low pay, and provides an argument as to alternative ways in which this can be addressed.

Originality/value The paper examines the relationship between the rise of neoliberalism and finance capital, the subsequent emergence of the neoliberal organization, the associated proliferation of ALMP and ZHCs, and the impact of these on creating a low-wage economy. It makes the argument that the UK’s low-wage economy is the result of regulatory choices influenced by a political preference for financialization, even if such choices are presented as not being so. Thus, the contribution of this paper is that it brings together distinct and important contemporary issues for scholars of employee relations, but connects them to the role of the state and neoliberal regulation.