The finance-dominated accumulation regime & the future of work in the post-COVID world

This paper examines the relationship between financialisation and the future of work in the post-COVID era. It combines an analysis of changes in labour relations due to financialization with an analysis of the macroeconomic impact of financialisation. It will discuss these for the periods before and after the financial crisis and analyse the impact of COVID on labour relations and the growth model in this context. The first section discusses the relationship between the employer-employee distribution of income and economic growth under neoliberalism, highlighting that anaemic growth was largely the outcome of declining wages. A significant amount of declining wages has been associated with the rise of shareholder value orientation which induced the management of non-financial corporations to reduce labour costs. Yet, financialisation is a complex development that has been affecting other domains of the economies beyond the non-financial corporate sector. A notable case is the financialisation of households, and more specifically the financialisation of the housing market. Rapidly rising mortgage debt ratios, driven by rising house prices, generated a debt-fueled real estate bubble in most advanced economies. The effects of rising household indebtedness not only positively affect housing prices, but also exhibits significant effects on class dynamics and has led to several changes at the workplace level. On the one hand, high-income employees who have invested in the real estate market enjoy economic returns and their share of financial incomes and capital gains over their wage income increases steadily. Thus, their class identity transforms from working class to a form of mini-rentier. On the other hand, low-income employees who become indebted become more self-disciplined at the workplace on the fear of defaulting on their debt, which makes them more vulnerable to complying with wage cuts and working under flexible contracts. Since COVID has induced a steep rise in household and corporate indebtedness, the purpose of this paper is to explore how the acceleration of financialisation will impact the future of work in the post-COVID era and discusses potential implications.