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Commodification of Labor in a Welfare State Term Paper

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Updated: Dec 22nd, 2021


Labor can be considered one of the most disputable issues existing in any society which got used to achieve some goals with the help of labor. As a rule, labor is viewed as a means to make money in order to enjoy some social rights: the wideness of rights depends on the income level. The society is usually divided into classes, whereas this division is not always related to the background, education, ethnicity, age, color of skin, nationality, sex, and other issues applied to representatives of different societies during various demographic surveys and polls.

Money makes people representatives of certain social classes. Labor is a means of reaching a higher level in the social pyramid existing in every society. However, different social regimes treat people differently in terms of labor and working conditions created for better operation of labor force. Thus, liberal, conservative, and social democratic regimes can be analyzed with regard to their desire or agreement to de-commodify labor. Moreover, it is necessary to trace the consequences of these regimes in operation regarding the wage earners; it would be useful to focus on the ways this can be translated for the wage earner living within any one or combination of these regimes.

Overview of Commodification

As commodification is the assignment of certain economic value to labor force (wage earners), it is necessary to dwell on the price each representative of labor force wants to get for the labor he/she offers. Skills and professionalism of every worker can be measured with the help of money paid to each of them; thus, education and training can be considered good investments into the future cost of labor. When the workers are hired, they are offered some wage which represents their real economic value for the employer in terms of cost of goods’ ratio produced by the worker and the money that should be paid to this particular worker.

In this respect, effective performance can be one of the main principles of assessment of the worker’s economic value. Certain skills should be valued accordingly in order to let the workers maintain themselves and their families which have to be included in the primary price of each worker.

Commodified workers are those who can rely only on their ability to perform some task due to their labor skills and qualification, the de-commodification is aimed at making the society less labor-oriented. In this respect, governments of welfare states introduce certain legal issues which ensure the wellbeing of their citizens regardless of the ability to work. Such means as “…pensions, maternity leave, parental leave, educational leave, and unemployment insurance” (Esping-Andersen, “Three Worlds” 23) can be considered the first step in de-commodification of the labor force within welfare states. “Some nations have moved towards this level of de-commodification, but only recently, and, in many cases, with significant exemptions” (Esping-Andersen, “Three Worlds”, 23).

Thus, the main strategy of welfare states’ governments are the social packages which guarantee that the citizens will survive regardless of their illness, necessity to obtain education, to leave the position because of the childbirth, though the parenthood can be considered the issue which has its economic value (Esping-Andersen, “Incomplete Revolution”, 78). Thereby, the workers should not be afraid of consequences of their disability to perform some labor because the government has ensured their social rights.

Consequently, welfare states try to make their social systems function as a well-organized mechanism in order to avoid poor performance because workers would operate as required only being aware of the social assistance that can guarantee maintenance of their families, though social insurance or assistance cannot be regarded as the basic means of de-commodification because social reforms do not remove the necessity to work for the wage earners.

Liberal Welfare Regime

Such factors as social rights, social stratifications, and market dependability serve as the basis for distinguishing several regimes within capitalism welfare in Esping-Andersen. Within the aforementioned factors, the liberal welfare regime can be distinguished by a focus on economic efficiency, in which the government has a relatively passive role. It should be understood that the aforementioned distinguishing factor does not contradict the characteristics of capitalism welfare, rather than puts different priorities for them, in order to serve a specific purpose. In the context of liberal welfare regime, such purpose can be seen in economic efficiency. For example, the social policies within the liberal welfare regime are essentially present; however, they take a residual form (Esping-Andersen 62).

In that regard, de-commodification, as a term explaining the exclusion of certain commodities from the realm of the market, can be represented as equilibrium with two extreme points. Each of the regimes can be placed in such equilibrium with an inclination toward a certain direction. In terms of liberal welfare regime, the inclination is toward commodification, as it can be understood through its residual nature. The de-commodification of labor in liberal welfare regime, although minimal, can be represented through the involvement in assisting those who are “unable to participate in the market anyhow” (Esping-Andersen 43).

It can be stated that such minimal involvement applies in this case to the idea of welfare, although the ideology of liberal states oppose de-commodification initiative in extreme forms. Thus, conforming to the scope outlined in this paper it can be stated that liberal welfare regime does not desire de-commodification, allowing it only in slight measures, where the low measures of de-commodification indexes, in countries representing such regimes (the United States, with an index of 13.8 is a good example (Esping-Andersen 52)), is confirmation of such statement.

The reflection of the role of de-commodification in liberal societies, namely on wage earners, can be explained through outlining their ability to maintain their welfare. The latter is specifically evident if free market is unable or flawed in aiding wage earners in doing so. Such notion is demonstrated when assuming that the potential wage earner lacks a productive resource, or the reward for such resource is not sufficient. In such case, the interventions of the state can be distinguished based on the way a wage earner was put in such condition.

It can be stated that for those whose lack for a productive resource is based on external circumstances, the actions of the state can be interpreted as falling within the category of minimal involvement in decommodifying labor. The latter can be demonstrated through the example of the United States in the form of implemented affirmative action policies, which were occasionally successful (Esping-Andersen).

The case where the wage earner is unwilling to participate in the market, on the other hand, can be seen as one of the reasons for a liberal state to oppose generous social involvement, mainly due to the negative influence on the efficiency of the market. One of the examples in the case of the wage earner, who is unwilling to increase his /her productive resource, can be seen in the case of low skill workers. If translating the governments’ initiatives of setting a minimum wage as de-commodification, the opposition of economists can be seen through the argument of ignoring the role of the free market, leading to that the supply for labor will exceed its demand.

Generally it can be stated that the liberal welfare regime is unable to address the needs of a wide category of wage earners. Accordingly, the rising of income inequality (Esping-Andersen 55), unemployment, the lack of education, and the lack of health insurance can be seen among the possible consequences for the potential wage earner in liberal welfare regime.

Social Democratic Regime

Commodification in social democratic regime

The main concept of the social democratic regime is that it argues that the diversity between social classes is less obvious in the conditions of welfare, though every society is based on the principle of social classes as they make up a state. When the social classes disappear, the chaotic movement of groups would destroy the concept of the state. As argued by Esping-Andersen, “… the balance of class power is fundamentally altered when workers enjoy social rights…” (“Three Worlds”, 11). Though the wage earners have received some privileges in terms of social assistance and medical insurance, they are not offered to quit their job positions immediately.

The primary task for the welfare social democratic states is to ensure that some costs are saved before the wage earners lose the capability to make money and sustain their families. As “… there is a greater inclination to regulate class-distributional conflicts through governmental and interest concentration when both business and labor are captive to forces beyond domestic control” (Esping-Andersen, “Three Worlds”, 15), it seems natural to provide measures for safer future.

Moreover, the democratic impact on welfare states is considered disputable because wage earners are free to demand what they want which, however, does not make them representatives of higher social classes and influences the overall economic situation and welfare. Consequently, the welfare social democratic states are forced to establish social benefits for wage earners as they are the main contributors to the state budget and thus deserve some assistance in order to support their families in case of their disability to perform their duties and functions.

Wage earner in social democratic regime

The most vulnerable category of people that suffer losses when falling ill or becoming unable to perform their functions at work is wage earners. When the government of social democratic state incorporates legal issues enabling its citizens to be sure that they will be provided with certain social support, the process of de-commodification takes place. Thus, in the social democratic welfare countries the wage earners become the most secured category of people as they are valued by the government. As argued by Esping-Andersen, “… a ‘social democratic’ welfare state will, in its own right, establish critical power resources for wage-earners, and thus strengthen labor movements” (“Three Worlds”, 16).

As a rule, wage earners in social democratic welfare states are considered the ones who benefit from establishment of welfare policies in terms of the concept that “All benefit; all are dependent; and all will presumably feel obliged to pay” (Esping-Andersen, “Three Worlds” 28).

In this respect the scope of commodities and issues that can be sold and bought is attributed to the purely capitalistic relations, whereas the social assistance and benefits for wage earners are analyzed in the borders of social policies and welfare policies. All commodities and issues of the capitalistic relations are dubbed in the social democratic welfare states as those that are provided by the state policies aimed at improving the living standards of the country’s population.

Thus, the wage earners are the ones that face the changes and benefit from replacement of market relations by the social assistance and insurances. Consequently, the distribution of the assistance is not stipulated by the distribution of the welfare and earnings. The level of assistance does not depend on the social class to which the wage earners belong; neither does it depend on the income level of the workers that contribute to the state budget by paying taxes and other charges.

Conservative Welfare Regime

In a conservative welfare regime, also called corporatist, the main purpose of market efficiency is replaced by the objective of preservation of social order and associated patterns of distribution. Again, the same principle of the welfare equilibrium can be seen in this case too, where such factors as social rights, stratification and market dependability are also present, although with different proportions and priorities. These priorities are arranged in an order that serves the aforementioned purpose of preservation. The difference between the liberal and the conservative regime can be seen in shifting the emphasis from the individual toward the groups.

The latter can be seen through “a myriad of occupationally distinct schemes, explicitly designed so as to recognize and uphold status distinctions”, giving key social groups special privileged status (Esping-Andersen 58). The examples of such regimes can be still evident in such countries as Germany, Austria, France, and Belgium, which score high on conservatism, and low, or medium on indices of socialism and liberalism (Esping-Andersen 76).

Considering de-commodification as a measure of socialism programs, it can be stated that conservatism stands somewhere in between liberals, who pursue interventions of minimal needs, and social democrats, who pursue “welfare state that would promote an equality of the highest standards” (Esping-Andersen 27). Accordingly, it can be stated that the conservative state pursues conditioned de-commodification, in which the attachment to a group can be seen of special value. In that regard, with the regime being historically linked to Catholicism, with the accompanying values and traditions, it can be seen that one of the groups that the conservatism welfare regime put emphasis on is family.

Thus, it can be stated that there is a medium allowance for de-commodification in conservative welfare regimes, with an emphasis put on status. A good reflection of such position can be seen through the example of belonging to the family group, where such element as gender, which was largely ignored by Esping-Andersen, leads to a low female participation in Germany labor force (Kennett 184). Accordingly, the latter is concerned with the focus of the state on the family group, i.e. shifting the de-commodification factor toward maintaining the social order, while compromising market efficiency.

Analyzing the reflection of conservative welfare regime on a wage earner, it can be stated that the situation is two-fold, depending on the membership of the individual in any of the social groups. In general, it can be stated that such regime is an efficient middle point between liberal and social interventions for wage earners. The interventions provided by the state can be seen appropriate to maintain efficient development, while at the same time isolating labor from the political force, which can be seen through the example of the conservative forces in Europe, which were “incorporating farmers into reactionary alliances” (Esping-Andersen 30).

Accordingly, the focus on the family, although not directly related to the issue of labor, can be seen as an influential factor in terms of the effects on workers in conservative regimes. The direction of such influence is mostly taking corrective forms, guiding the society into a direction that maintains the appropriate hierarchy of statuses. It should be noted that such factor is reflected in lower unemployment rates, and lower inequality in income in conservative countries.

Additionally, it should be mentioned that there is a possible correlation between the conservative regimes and the presence of dominant power movement in many conservative states, e.g. Scandinavian countries (Kemeny 92). In that regard, a possible interpretation can be seen in that labor movement are social groups in themselves, which is an essential element for the conservative regime to intervene. In that regard, a typical wage earner has a better position under the conservative welfare regime, due to the influence of the social groups to which he/she belongs. Such influence might be indirect, as in family groups and state’s child social policies, or direct, as in labor movements and unions.

On the other hand, the gender element, opposing the patriarchal model of the conservative regime, might contradict the aforementioned statement, if the typical wage earner in question is a female. In that regard, the situation might be two-fold, where on the one hand, there is a low female participation in labor, e.g. Germany, while on the other hand, in case family options were exhausted, the state might incorporate interventions program. Such programs, although not labor-based, might contribute to lower income inequality in conservative countries.


The welfare of the country depends on the income level of its labor forces, though welfare states are trying to make their wage earners be aware of certain social assistance and benefits that would be paid in case of illness, maternity, necessity to obtain education, and other issues that can make citizens leave their positions and be forced to stay without any means to survive. As a rule, commodification existed on a regular-basis principle and added the economic value to the workers; which presupposed that each worker has the price that can be measured through the wage he/she is eager to receive, or certain income that makes the wage earners representatives of certain social classes.

In this respect, social classes were the means of measurement of the economic value of wage earners. The modern situation suggests that de-commodification should take place which can be done through establishment of social policies aimed at making the population secured from different obstacles that can deprive them of receiving costs necessary to survive.

Works Cited

Esping-Andersen, Gosta. The Incomplete Revolution: Adapting to Women’s New Roles. Cambridge: Polity, 2009. Print.

Esping-Andersen, Gosta. The Three Worlds of Welfare Capitalism. Princeton, N.J.: Princeton University Press, 1990. Print.

Kemeny, Jim. “Theories of Power in the Three Worlds of Welfare Capitalism.” Journal of European Social Policy 5 2 (1995): 87-96. Print.

Kennett, Patricia. A Handbook of Comparative Social Policy. Northampton, MA: Edward Elgar, 2004. Print.

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