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It is argued that there are compelling reasons why we should be heading towards a fundamental incompatibility between the cherished goal of equality and the equally cherished goal of full employment. If this is so, we shall have left the epoch of the democratic class struggle and, possibly, regressed to a world dominated by the ‘social question’ and social polarization. These compelling reasons can be summarized under two labels: the first is globalization and technology, both of which undoubtedly enrich all nations, although in the process, they also accelerate industrial decline and contribute to unemployment; the second is tertiarization, which favours those with human and social capital, but which also may cause stagnation because of low productivity. In any case, both reasons point in the same direction: the less skilled are likely to become losers—be it as unemployed, or as low‐paid workers. The different sections of the chapter are: Jobs and Unemployment Trends Across Welfare Regimes; The Dilemmas of Globalization and Technological Change; Dilemmas of the New Service Economy; Identifying Services; Service Sectors; Service Occupations; Lousy Jobs or Outsiders? — post‐industrial job trends towards service job growth; The Cost‐Disease and Service Expansion; The Micro‐Foundations of Post‐industrial Employment; and The New Keynesian Household.

This is the third of three chapters on the sources of pressure on contemporary national welfare states, all of which seek to show how examining the sources of strain carries implications for identifying who is likely to fight with whom over what; the authors of the three chapters are not of one mind on this issue. Here, Pierson focuses on trends within affluent democracies that constitute potential sources of the strains usually attributed to globalization. Like Iversen in the previous chapter, he highlights the role of the shift from manufacturing to services, but rather than focusing on the disruption of employment, his concern is the shift in the workforce to activities where productivity improvements are more limited; the result has been slower economic growth, which generates fiscal strain for mature welfare states. This, for Pierson, is one of a series of ‘post‐industrial shifts’ that produce severe pressures on the welfare state — others include the maturation of governmental commitments, the transformation of household structures, and population ageing. All these shifts create intense fiscal problems; in addition, social change in a context where programmes are often slow to adapt generates mismatches between the inherited capacities of welfare states and contemporary demands for social provision.

This chapter starts with brief overviews of global trade flows in services, the barriers that restrict such trade, and the economics of service sector protection and liberalization. This is followed by a summary of the main elements of the GATS (General Agreement on Trade in Services) and a discussion of the experience obtained in the first five years of the operation of the GATS in expanding the coverage of the agreement. The chapter ends with a brief assessment of the usefulness of the GATS as an instrument for the pursuit of service sector reform. The different sections are as follows: Conceptual and empirical issues; Barriers and potential gains from reform; The Uruguay Round negotiations; The GATS; Sector‐specific negotiations and agreements; Electronic commerce; The challenge of expanding the GATS; and Conclusion.

This chapter outlines the service sector commitments made by the member countries of the South Asian Free Trade Agreement (SAFTA) in the World Trade Organization and in their other bilateral or regional agreements. It examines the main characteristics of these commitments, their relation to their unilateral liberalization in these areas, how their multilateral commitments compare with their regional/bilateral commitments in services, and essentially what this reflects about their willingness and preparedness to negotiate and liberalize services in the context of SAFTA. The chapter also describes the status of these commitments with the existing levels of liberalization to indicate the countries' willingness to liberalize unilaterally as opposed to multilaterally or regionally. This discussion thus provides a sort of reality check on where intra-regional integration is feasible and not just where there is potential.

This introductory chapter offers a new agenda for research in political economy centered on the transformation of advanced capitalist democracies from industrial to services-based economies. It introduces the research questions which form the core of this agenda and the central themes of the volume; explains what the existing political economy literature can and cannot tell us about these questions; and outlines (based on the analysis in the volume) the principal economic and political characteristics of a set of alternative models of service sector development, which can provide a framework for future analyses of the political economy of service societies. In particular, it outlines a set of arguments about the ways in which the institutional configurations of existing socioeconomic regimes (or “varieties of capitalism”) influence their service sector development trajectories, and examines some of the economic, distributional, and political implications of the pursuit of alternative paths to service sector development (e.g., the rate of service employment creation, and the types of service sector jobs which are created, patterns of inequality, rates of labor force participation, the distribution of political preferences over policy among different labor market groups, patterns of political coalition formation, and partisan electoral outcomes). It concludes by reviewing the strengths and weaknesses of alternative service sector development models (some of which have been highlighted by the recent financial crisis), which have implications for the long-term economic and political sustainability of these regimes.

The tertiary sector is increasingly playing a larger role in the economy, particularly in advanced countries. This chapter documents the growing linkages of the service sector with the rest of the economy and how liberalization has contributed to increasing such linkages. Input-output analysis is used to uncover the links between the tertiary sector and the rest of the economy. The tertiary sector is defined in a fairly broad manner by excluding only manufacturing, mining, agriculture, and construction.

This is the first of five country case studies on income inequality, and looks at the case of India. Discusses the differences between the approach taken to liberalization in India (the Delhi Consensus) and the standard approach (the Washington Consensus); the Delhi Consensus has emphasized the slow liberalization of trade and very gradual privatization, and has avoided capital account liberalization. This prudent approach has sidestepped major shocks, and the changes in inequality consequent upon these reforms have been relatively modest, although rural inequality has risen at a slower pace than have urban and overall inequality. The rise in inequality is attributed to three factors: a shift in earnings from labour to capital income; the rapid growth of the services sector, particularly the FIRE sector (banking, financial institutions, insurance, and real estate), with a consequent explosion in demand for skilled workers; and a drop in the rate of labour absorption during the reform period, associated with an increase in regional inequality, especially in the incidence of rural poverty. The chapter has five sections: Introduction: Salient Economic Performance Aspects and Recent Policy Reforms—an outline of the economic performance of the Indian economy since the 1950s, with a brief overview of the economic reforms initiated; Trends in Inequality and Poverty in India—an analysis trends in aggregate inequality and poverty, with suggested explanations; Poverty and Inequality at the State Level—an outline of the major characteristics of poverty and inequality at the level of individual Indian states; and Tentative Conclusions.

This chapter considers how the offshore outsourcing of white-collar service work set off something of a moral panic in Western Europe and the United States. Some believed that such outsourcing was salubrious in the long term and consistent with broad trends of economic restructuring. To others, it heralded a new era of job loss and economic vulnerability. The chapter explains how, in both cases, the international trade in services became a synecdoche for the promise and peril of increasing global interdependence. It examines how offshoring has crept into the service sector and tackles questions that nobody seems prepared to answer: about concession bargaining, about the denial of workers' rights in Export-Processing Zones, and about the impact on wages and working conditions in the United States. Finally, it discusses the offshore outsourcing of service work from the Indian perspective.

Hong Kong's economy has experienced rapid structural changes over the past three decades. The service sector grew speedily in terms of its share in employment, nominal GDP and real GDP, while the manufacturing sector shrank significantly. Such a rapid structural change can be attributed to the relocation of manufacturing industries to the Pearl River Delta. Ostensibly, the expansion of manufacturing production in mainland China gives rise to an enormous demand for all sorts of supporting services in Hong Kong. This chapter examines the growing service sector in the territory. It explores the changes in labour productivity over time, the rise of intermediate production services and the government's role in a service economy.

This chapter sets the scene for the book as a whole. It describes the importance of the service sector and its significance in developed economies. It also introduces the ESRC/AIM cohort of Service Fellows, which was the initiative that gave rise to this book before going on to summarize the chapters and explains their contribution.

The disturbances in 1948 and the constitutional reforms that followed not only prompted British firms collectively to review their representative machinery, but also focused discussion within companies on future policies designed to bolster their standing in the Gold Coast and to take account of changing conditions in the colony. Different companies devised different strategies, but these nevertheless had many common features. Public relations and Africanization had become the concern of all expatriate companies by the 1950s. Political circumstances and the new Convention People's Party (CPP) initiatives in the banking and cocoa sectors also explain redeployment occurring in the mercantile sector and expansion in banking; in the shipping sector British lines set about dealing with the potential competition posed by the CPP's ambition to establish a national shipping line. Given their discussions over collective strategies for decolonization, mercantile firms as well as firms in the service sector also adopted changes previously implemented by other companies.

This chapter examines the service sector from 1830–1914. In Britain, as in every country which has experienced economic development, industrialization created among consumers a greater and greater demand for non-material goods. Indeed, Britain led the way in building up the service sector as a proportion of its economy and labour force. The chapter discusses the skills and characteristics of service sector employees, the impact of services; the impact of expenditures in travel, medicine, and entertainment; and results of the growth of retail and wholesale trade.

The issue of inclusive growth is dealt with by analysing separately the behaviours of unorganized service sector (without trade), informal trade, and informal sector (in general, infs) across their locational (rural/urban) and structural (self-employed/establishment) dimensions, based on the state-level data of India. In general, a higher and increasing concentration of modern (urban/establishment) infs is observed in the developed states as compared to the underdeveloped ones. The empirical analyses on intersectoral relations also indicate a progressive trend for the modern infs with the expansion of the formal sector, while in this whole process the traditional agriculture based petty infs suffers and may even contract. Thus, a duality is discovered across the behaviours of the petty and modern infs. However, most crucially, the economic conditions of all the segments of infs remain unaltered despite an expansion of the formal sector, indicating a persistence of misery among the marginal mass.

Since the assassination of Martin Luther King Jr., and the successful sanitation workers' strike in Memphis in 1968, economic progress for the city's African Americans has been sporadic, uncertain, and disappointing. Globalization and the collapse of unionized manufacturing jobs all but eliminated a traditional source of relatively high-wage employment for non-skilled workers. The low-wage service sector, with its patterns of temporary and intermittent employment, has trapped African Americans in economic insecurity and powerlessness. At the same time, the collapse of the labor movement has crippled a once-potent agent of positive change. Although African Americans have made great strides in gaining political power, King's hopes that the civil rights gains of the 1960s would pave the way for a more egalitarian society remain unfulfilled. Unionization of the city's growing sectors of transportation, health care, and service industries would go a long way toward fulfilling King's 1968 call for economic equality.

Civil servants are classified accordingly and the comparisons of each hierarchical position are defined by the power they acquire in the organisation. Those in the higher civil service are referred to as the upper middle class while the much larger army of public servants providing ‘back office functions’ are viewed as the traditional British working class represented in the service sector. In an awkward position are those in the middle as their tasks differ from the higher office that makes the rules, the bottom simply applies them while their work is confined by the rules yet requires their own creative input. Apart from looking into what these middle-ranking officials do, this chapter also examines who they are in three perspectives including their social background, their background, and career outlook.

This chapter investigates the sales and employment of Japanese affiliates of foreign firms (JAFFs) and foreign affiliates of Japanese firms (FAJFs) in the service sector in 1995. It compares Japan's establishment transactions with Japan's cross-border transactions at the three-digit industry level and Japan's purchases of services from foreigners with that of the U.S. The analysis reveals that frequently cited foreign directive investment (FDI) statistics of Japan grossly underestimate activities of foreign affiliates in Japan.