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New employment regimes in cities: The impact on

immigrant workers
a
Saskia Sassen
a
Professor in the Department of Urban Planning and at the School of International and
Public Affairs , Columbia University , New York
Published online: 30 Jun 2010.

To cite this article: Saskia Sassen (1996) New employment regimes in cities: The impact on immigrant workers, Journal of
Ethnic and Migration Studies, 22:4, 579-594, DOI: 10.1080/1369183X.1996.9976561

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 new community 22(4): 579-594 October 1996

New employment regimes in cities: the impact on

immigrant workers

Saskia Sassen
Abstract The major cities of highly developed countries exhibit marked changes in job
supplies and employment relations. It is frequently held that post-industrial societies
require plentiful supplies of highly educated workers and will hold no openings for the
low skilled. It is this latter category of jobs that immigrants have tended to fill in recent
decades. Empirical data on major cities in advanced economies negate this supposition,
revealing that there is an ongoing demand for immigrant labour and a continuing
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stream of employment opportunities which do not require high educational levels and
which pay low wages. The article examines whether this job supply is merely a residue,
to some extent augmented by the supply of low wage workers themselves, or whether it
is a feature of a reconfigured labour market in advanced urban economies, i.e. a systemic
development.

The new employment regimes that have emerged in major cities of highly
developed countries have reconfigured the job supply and employment rela-
tions. Much analysis of post-industrial society and advanced economies gener-
ally posits a massive growth in the need for highly educated workers and little
need for the types of jobs that a majority of immigrants have tended to hold over
the last two or three decades. This suggests sharply reduced employment
opportunities for workers with low educational levels generally and for immi-
grants in particular.
Yet detailed empirical studies of major cities in highly developed countries
show an ongoing demand for immigrant workers and a significant supply of old
and new jobs requiring little education and paying low wages. Is this job supply
merely a residue, partly inflated by the large supply of low-wage workers? Or
is it actually part of the reconfiguration of the job supply and employment
relations in advanced urban economies, that is to say, a systemic development
that is integral to such economies?
This article seeks to contribute to the analysis of the impact of the post-indus-
trial reconfiguration in major cities on the potential for and modalities of
immigrant employment, particularly immigrants in jobs requiring fairly low
levels of education and paying mostly low wages. The article starts by briefly
conceptualising the new urban economy to provide a broader context for the
more specific questions about the employment impacts on immigrants. The
purpose here is to expand the analytic terrain within which to place the
immigrant employment question, and to resist confining this question to certain

Saskia Sassen is Professor in the Department of Urban Planning and at the School of International and
Public Affairs at Columbia University, New York. In 1996/97 she will be a Scholar at the Center for
Advanced Research in Palo Alto, California.

0047-9586/96/040579-16 © Journals Oxford Ltd, published on behalf of ERCOMER

 580 S. Sassen

backward sectors of the economy, as is often done. Major trends in employment

that contribute to explain the continuing creation of low-wage jobs even in the
leading and most sophisticated economic sectors are then discussed. Thirdly, the
article discusses the trend towards the casualisation of the employment relation
in a growing number of jobs and occupations, a development that is particularly
evident with the growing informalisation of a broad range of activities in these
cities, the subject of the fourth part of the article. The purpose of these last two
sections is to create a type of loose matrix through which to examine the
employment question in advanced urban economies.

A conceptual perspective
There are three processes of economic and spatial organisation which I see as
central to the question addressed in the present article. One is the expansion and
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consolidation of the producer services and corporate headquarters sector into

the economic core of major cities in highly developed countries (Friedmann
1986; Castells 1989; Brake 1991; Carrez 1991; Drennan 1992; von Petz et al. 1992;
Fainstein et al. 1993; Hausserman and Siebel 1993; Le Debat 1994; Sassen 1994a;
see also Amin and Thrift 1992). While this sector may not account for the
majority of jobs, it establishes a new regime of economic activity and the
associated spatial and social transformations evident in these cities. A second
process is the downgrading of the manufacturing sector, a notion used here to
describe a mode of political and technical reorganisation of manufacturing that
is to be distinguished from the decline and obsolescence of manufacturing
activities. The downgraded manufacturing sector represents a mode of incor-
poration into the 'post-industrial' economy rather than a form of obsolescence.
Downgrading is a form of adaptation to a situation where a growing number of
manufacturing firms need to compete with cheap imports and the profit-making
capacities of manufacturing overall are modest compared with those of leading
sectors such as telecommunications or finance and sister industries. The third
process is the informalistion of a growing array of economic activities, which
encompasses certain components of the downgraded manufacturing sector. Like
the last-mentioned, informalisation represents a mode of reorganising the pro-
duction and distribution of goods and services under conditions where a
significant number of firms have an effective local demand for their goods and
services but cannot compete with cheap imports or cannot compete for space
and other business needs with the new high-profit firms engendered by the
advanced corporate service economy. Escaping the regulatory apparatus of the
formal economy enhances the economic opportunities of such firms.
Each of these three processes can be seen as separate and distinctive modes of
economic organisation and the corresponding uses of space: the 'post-industrial'
city of luxury high-rise office and residential buildings; the old 'dying' industrial
city of low-rise buildings and family-type houses; and the 'Third World' city
imported via immigration and located in dense groupings often referred to as
immigrant communities. Each of these can be seen to contain distinct income-
occupational structures and concomitant residential and consumption patterns,
well represented in the expansion of a new urban gentry alongside expanding
immigrant populations in all major cities in Western Europe, the USA and now
in incipient form in Japan as well.
 New employment regimes in cities: the impact on immigrant workers 581

One key question is whether these different 'cities' are indeed as separate as
they appear, each belonging to a different spatio-temporal configuration. Or is it
possible to identify behind this segmentation in the organisation of economic
activity a common dynamic whereby growth in one segment feeds growth in
others? What presents itself as disarticulation can then be seen, in this second
case, as a form of articulation that makes possible the reproduction of a
politically, ethnically, and spatially differentiated organisation of the economy.
Whether articulation and feedback effects exist among these different sectors
is of importance to the question organising this article. If there is articulation
among the different economies and the labour markets embedded in them it
could be argued that it is necesary to rethink some of the basic propositions
about the post-industrial economy, i.e. the notion that it needs largely highly
educated workers, as well as about informalisation and downgrading, i.e. the
notion that the latter two are are just a third world import or an anachronistic
remnant of an earlier era. The argument here is that new employment regimes
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are becoming apparent in these services-dominated urban economies which

create low-wage jobs and do not require particularly high levels of education.
Politically and theoretically this points to an employment context that is more
extensive than that of immigrant related jobs, and is indeed a systemic develop-
ment in the advanced urban economy.
Given space limitations this article will focus on just two systemic trends
evident in cities today. One is the growing demand for services by firms, a trend
directly feeding the job supply in cities and the new employment regimes. The
other is the question of the ongoing economic significance of cities in a context
where the leading economic sectors are increasingly operating globally, are
intensive users of telematics, and produce hypermobile outputs; these character-
istics have been interpreted as signalling that cities may have lost their role in
the so-called post-industrial economy.

The growing service intensity in economic organisation

An important new development from the perspective of the urban economy is
the growing demand for services by firms in all industries and the fact that cities
are preferred production sites for such services, whether at the global, national,
or regional level. Elsewhere I have analysed and referred to this process as the
growing service intensity in the organisation of the economy (See Sassen 1994a:
Chapter Four). This growing service intensity in the organisation of all industries
has contributed to a massive growth in the demand for services by firms in all
industries, from mining and manufacturing to finance and consumer services.
Insofar as cities are key sites for the production of services for firms, this has had
a significant growth effect on cities beginning in the 1980s and continuing today.
The growth in services for firms is evident in cities at different levels of a
nation's urban system. Some of these cities cater to regional or sub-national
markets; others cater to national markets and yet others cater to global markets.
Regionally oriented firms do not need to negotiate the complexities of inter-
national borders and the regulations of different countries, but they face a
regionally dispersed network of operations that requires centralised control and
servicing, and they need to buy specialised inputs from a wide array of service
industries. It is these developments which contribute to explain the sharp
growth in producer services evident throughout advanced economies beginning
 582 S. Sassen

in the 1980s (see Thrift 1987; Daniels 1991; Fainstein et al. 1993; Castells and
Ayoama 1994; Sassen 1994a: Table 4.1; Sassen and Orloff, forthcoming).
The sharp growth in the globalisation of economic activity has raised the scale
and the complexity of transactions, thereby feeding the growth of top-level
multinational headquarter functions and the growth of advanced corporate
services. In many ways this is an extension of what is happening in cities
catering to regional and national level firms. The difference that globalisation
makes is to the scale and complexity of operations and hence to the specialised
services firms buy to perform these operations. It is precisely the intersection of
these two major processes - the growing service intensity in the organisation
of advanced economies and increased globalistion - which allows an under-
standing of the sharply expanded role of a particular kind of city in the world
economy since the early 1980s, the type referred to as the global city.
In the case of these cities - major international business centres - the scale,
power, and profit levels of this new core of activities suggest the formation of a
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new urban economy. This is so in at least two regards. First, even though these
cities have long been centres for business and finance, since the late 1970s there
have been dramatic changes in the structure of the business and financial
sectors, as well as sharp increases in the overall magnitude of these sectors and
their weight in the urban economy (Castells 1989; Brake 1991; Daniels 1991;
Carrez 1991; Cordier 1992; Frost and Spence 1992; European Institute of Urban
Affairs 1992; Sassen 1994a; Todd 1995). Second, the ascendance of the new
finance and services complex, particularly international finance, engenders what
may be regarded as a new economic regime, that is, although this sector may
account for only a fraction of the economy of a city, it imposes itself on that
larger economy. Most notably, the possibility of superprofits in finance and
advanced services has the effect of devalorising manufacturing insofar as the
last-mentioned cannot generate such returns (Sassen 1994a).
This is not to say that everything in the economy of these cities has changed.
On the contrary, they still show a great deal of continuity and many similari-
ties with cities that are not global nodes (Hall and Hay 1980; Cheshire and
Hay 1989; Kunzmann and Wegener 1991; Knox and Taylor 1995). Thus manufac-
turing remains a crucial sector in many of these economies, even when it
may have ceased to be a dominant sector in major cities. The implantation of
global processes and markets has meant that the internationalised sector of
the economy has expanded sharply and has imposed a new valorisation
dynamic - that is, a new set of criteria for valuing or pricing various economic
activites and outcomes (see Sassen 1994a: Chapter Six; see also generally the
journal Competition and Change: The Journal of Global Business and Political Economy
1995 (Harwood Academic Publishers)). This has had devastating effects on large
sectors of the urban economy. High prices and profit levels in the internationally
oriented sector and its ancillary activities, such as top-of-the-line restaurants and
hotels, have made it increasingly difficult for other sectors to compete for space
and investments. Many of these other sectors have experienced considerable
downgrading and/or displacement, as, for example, neighborhood shops
tailored to local needs are replaced by upscale boutiques and restaurants
catering to new high income urban elites.
While these general trends are sharpest in large US cities, they are also evident
in major Canadian cities (e.g. Todd 1995), and major European cities (Brake 1991;
von Petz et al. 1992; Le Debat 1994; Futur Anterieur 1995). Further, they assume
specific forms and modalities in each city (e.g. Abu-Lughod 1995; see generally
 New employment regimes in cities: the impact on immigrant workers 583

Friedmann 1995). Though at a different order of magnitude, these trends also

became evident during the late 1980s in a number of major cities in the
developing world that have become integrated into various world markets: Sao
Paulo, Buenos Aires, Bangkok, Taipei, and Mexico City are only a few examples.
(See select chapters in Knox and Taylor 1995; Sassen 1994a; Kowarick and
Campanario 1986). Also here the new urban core was fed by the deregulation of
financial markets, ascendance of finance and specialised services, and integration
into the world markets. The opening of stock markets to foreign investors and
the privatisation of what were once public sector firms have been crucial
institutional arenas for this articulation. Given the vast size of some of these
cities, the impact of this new core on the broader city is not always as evident
as in central London or Frankfurt, That is to say, the new global city functions
in some of these large centres in the developing world are submerged under the
mega-city syndrome.1
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The new specialised service economy and immigrants

One of the central concerns in my work has been to look at cities as production
sites for the leading service industries of our time, and hence to recover the
infrastructure of activities, firms and jobs that is necessary to run the advanced
corporate economy. Thus I have argued that the capability for global control of
the leading economic sectors cannot simply be subsumed under the structural
aspects of the globalisation of economic activity. It needs to be produced. It is
insufficient to posit, or take for granted, the awesome power of large corpora-
tions or the existence of some 'international economic system'.
By focusing on the production of this capability, a neglected dimension is
added to the familiar issue of the power of large corporations. The emphasis
shifts to the practice of global control: the work of producing and reproducing
the organisation and management of a global production system and a global
marketplace for finance, both under conditions of economic concentration.
Power is essential in the organisation of the world economy, but so is pro-
duction - including the production of those inputs that constitute the capability
for global control, and the infrastructure of jobs involved in this production. This
allows us to focus on cities and on the urban social order associated with these
activities.
High level business services, from accounting to decision making expertise,
are not usually analysed as production or in terms of a work process. Such
services are usually seen as a type of output, i.e. high-level technical knowledge.
Thus insufficient attention has been paid to the actual array of jobs, from
high-paying to low-paying, involved in the production of these services. A focus
on the work process in information industries brings to the fore the labour
question. Information outputs need to be produced, and the buildings which
hold the workers need to be built and cleaned. The rapid growth of the financial
industry and of highly specialised services generates not only high level techni-
cal and administrative jobs but also low wage unskilled jobs.2
The concentration of producer services in major cities and the occupational
and income distribution that characterises these services have contributed to
major changes in the job supply (Stanback and Noyelle 1982; Nelson and
Lorence 1985; Sheets, Nord and Phelps 1987; Frost and Spence 1992; Fainstein el
ah 1993; Hausserman and Siebel 1993).3 The consolidation of this economic
 584 S. Sassen

core of top level management and servicing activities needs to be viewed

alongside the general move to a service economy and the decline of manufactur-
ing (Gershuny and Miles 1983; Delaunay and Gadrey 1987; Cohen and Zysman
1987; Giarini 1987; Cheshire and Hay 1989). New economic sectors are re-
shaping the job supply. However, so are new ways of organising work in both
new and old sectors of the economy. Components of the work process which even
20 years ago took place on the shop-floor and were classified as production jobs,
have today been replaced by a combination of machine/service or worker/engin-
eer. Activities that were once all consolidated in a single service retail establish-
ment have now been divided between a service delivery outlet and central
headquarters. Finally, a large array of activities which a decade ago were being
carried out via standardised work organisation are today increasingly character-
ised by informal means of production, e.g. sweatshops and industrial homework.
In brief, the changes in the job supply evident in major cities are a function both
of new sectors and of the re-organisation of work in both new and old sectors.4
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The expansion of low-wage jobs as a function of growth trends implies a

re-organisation of the capital-labour relation. To see this it is important to
distinguish the characteristics of jobs from their sectoral location. That is to say,
highly dynamic, technologically advanced growth sectors may well contain,
low-wage dead end jobs. Furthermore, the distinction between sectoral character-
istics and sectoral growth patterns is crucial: backward sectors such as down-
graded manufacturing or low-wage service occupations can be part of major
growth trends in a highly developed economy. It is often assumed that backward
sectors indicate trends of decline. Similarly, there is a tendency to assume that
advanced industries, such as finance, have mostly good white-collar jobs. In fact
they contain a good number of low-paying jobs, from cleaners to stock clerks.5

There is also an indirect creation of low-wage jobs induced by the presence of

a highly dynamic sector with a polarised income distribution. It takes place in
the sphere of consumption (or social reproduction). The expansion of the
high-income work force, in conjunction with the emergence of new cultural forms
in everyday living, has led to a process of high-income gentrification that rests,
in the last analysis, on the availability of a vast supply of low-wage workers. This
gives these cities an increasingly sharp tendency towards contestation and social
polarisation. (E.g. Cross 1992; Social Justice 1993; Dunn 1994; Peraldi and Perrin
1996; Holston 1996; see also generally Mingione 1991). High-price restaurants,
luxury housing, luxury hotels, gourmet shops, boutiques, French hand-service
laundries, and special cleaning services, are all more labour-intensive than their
lower price equivalents.

The dual organisation of service industries

Among the major systemic tendencies in the organisation of the service sector
contributing to polarisation is the disproportionate grouping of service industries
at either end of the technology spectrum. In the US service industries which can
be described as information and knowledge intensive have generated a significant
proportion of all new jobs created over the last 15 years and have absorbed a
disproportionate number of college graduates. Most of the other jobs created in
the service sector fall at the other extreme. Appelbaum and Albin (1990) find that
 New employment regimes in cities: the impact on immigrant workers 585

the first sub-sector generated over 9 million new jobs from 1973 to 1987, while
the second sub-sector added 11.2 million jobs. Each of these sub-sectors accounts
for a considerable proportion of US jobs, with the first accounting for almost 30
per cent of all US jobs, and the second sub-sector for 39 per cent.6
These conditions of sharp growth at either end of the technology spectrum are
continuing into the 1990s. Based on the data for 1992, the US Bureau of Labor
statistics projects a massive growth of low-wage service jobs, including service
jobs catering to firms. Three service industries alone will account for about half
of total US employment growth between 1992 and 2005: retail trade, health
services and business services. Using the most detailed occupational classifi-
cation (223 categories) the largest increases in terms of numbers of jobs are in
order: retail sales workers, registered nurses, cashiers, truck drivers, waiters
and waitresses, nursing aides, janitors, food preparation workers, and systems
analysts.7 Most of these jobs do not require high levels of education and they are
mostly not very highly paid. Nor is there expected to be an increase in the
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median weekly wage of workers.

At the other extreme are jobs requiring a college degree. These accounted for
23 per cent in 1992 and are projected to rise only by 1 per cent to 24 per cent by
2005. The knowledge and information intensive service sub-sector absorbed
more than 5.7 million college educated workers from 1973 to 1987. By 1987, over
40 per cent of workers with a college degree were employed in these service
industries, compared to 17 per cent in the other service sub-sector. Indeed, in the
latter, 60 per cent of workers have never attended college. Furthermore, 20 per
cent of workers with post-college education were in information and knowledge
intensive service industries, compared to 6 per cent in the other services
subsector.
Parallel segmentation is evident in terms of occupation. Managerial, executive,
and administrative occupations account for 17 per cent of all jobs in information
and knowledge intensive service industries, which is double what they are in
other services. On the other hand, the latter subsector had, at 9.4 per cent, three
times the proportion of supervisors that are found in the former. Information
clerical and computer related equipment operators were also most represented
in information and knowledge intensive services, 8.5 per cent compared to 4.7
per cent in other services. Service and sales occupations are 40 per cent in other
services, but only 16 per cent in information and knowledge intensive services.
If we add up professionals, executives, and kindred occupations we can see that
they account for 34 per cent of workers in this sub-sector, compared to 14.6 per
cent in other services.
The two broad occupational categories projected by the BLS to increase are
professional specialty occupations and service occupations.8 The US Bureau of
Labor Statistics' data and projections show that the incomes in these two
occupations are at the opposite ends of the earnings spectrum in 1992; earnings
for service workers were then about 40 per cent below the average for all
occupational groups. In combination with growth trends in industries and
occupations this points to the continuation and even increase in inequality in
earnings since most new jobs will be in low paying service jobs and some of the
professional specialty jobs may raise their levels of specialisation and pay.
Appelbaum and Albin (1990) found that the differences they identified within
the service sector are also evident in earnings. Approximately 37 per cent (or 5.3
million jobs) of total new job growth in the USA from 1979 to 1987 was in a
 586 S. Sassen

group of service industries within the labour intensive sub-sector where the
median earnings of full-time year round workers was US$ 15,500 in 1986. This is
$7,000 less than the median of $22,555 of all full-time workers in this sub-sector
(and almost $9,000 less than the median in durable goods manufacturing). Thus
most new jobs in the labour-intensive sub-sector were in industries paying
median wages and salaries under $15,500. Furthermore, these jobs represented 37
per cent of new job growth in the 1980s which is an increase over the 29 per cent
they accounted for in the 1970s, signalling deterioration in the earnings of a
growing proportion of workers in services. By contrast public-sector low-wage
jobs, which are better paid and have more fringe benefits, were subject to a
decrease in terms of their proportion of all new jobs, accounting for 26 per cent
of jobs created in the 1970s and 22 per cent in the 1980s (or 3.2 million new jobs).
The lowest paid hourly workers are part-time workers in the labour-intensive
service industries, followed by full-time hourly workers in knowledge and
information intensive service industries.9 At the other end, the highest paid
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full-time hourly paid workers are in knowledge and information intensive

manufacturing, followed by all other manufacturing.
A crucial and familiar form of segmentation is by gender. Seven out of every
ten new jobs from 1973 to 1987 have been filled by women. Over 80 per cent of
women hold jobs in service industries compared with about 55 per cent of men.
The role of gender in the employment transformation can be captured in the fact
that women hold more jobs in knowledge and information intensive industries
than men: about 34 per cent of jobs held by women are in these industries
compared with about a fourth of jobs held by men. A gender divide is also
evident in terms of education. Thus, 38 per cent of women workers and 48 per
cent of men in information and knowledge intensive services have a college
degree, compared to respectively 15 per cent and 20 per cent in other services.
Median earnings of women are higher in knowledge and information intensive
services and manufacturing than in all other sectors; but they are always lower
than the median for men in each sector.

The casualisation of the employment relation

New forms of labour market segmentation are increasingly featuring in the
organisation of labour markets (e.g. Noyelle 1990; Appelbaum and Albin 1990).
Two characteristics stand out. One is the weaker role of the firm in structuring
the employment relation. More is now left to the market. The second is that there
has been a shift of some labour market functions and costs to households and
communities (e.g. Sassen 1995). This is particularly evident in the immigrant
community; but it is part possibly of a more generalised pattern that deserves
further research.
One of the forms taken by this weaker role of the firm is the declining weight
of internal labour markets in structuring employment. This corresponds both to
the shrinking weight of vertically integrated firms and the restructuring of
labour demand in many firms towards bipolarity-a demand for highly spe-
cialised and educated workers alongside a demand for basically unskilled
workers whether for clerical work, services, industrial services, or production
jobs, as discussed above (Harrison and Bluestone 1988; Noyelle 1990; Appel-
baum and Albin 1990). The shrinking demand for intermediate levels of skill and
training has in turn reduced the need and advantages for firms of having
 New employment regimes in cities: the impact on immigrant workers 587

internal labour markets with long promotion lines that function as training-on-
the-job mechanisms. The decentralisation of the large, vertically integrated
manufacturing firms, including the move of parts of the production process
offshore, has contributed to the decline in the proportion of unionised shops, the
deterioration of wages, and the expansion of sweatshops and industrial home-
work.10 This process includes the downgrading of jobs within existing industries
and the job supply patterns of some of the new industries, notably electronics
assembly.
Further, part-time and temporary employment are growing at a faster rate
than full-time employment. In the USA, an increasing proportion of service
workers are in part-time jobs, and they are so twice as often as average workers.
Involuntary part-time employment has grown significantly over the past dec-
ade.11 Yet another empirical referent for the casualisation of the employment
relation is the rapid rise of employment agencies that take over the supply of a
growing range of skills and occupations under highly flexible conditions.
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The terms of employment have been changing rapidly over the last 15 years
for a growing number of workers.12 The literature suggests an overall tendency
is towards a casualisation of the employment relation that incorporates not only
the types of jobs traditionally marked as 'casual' jobs, but also high level
professional jobs which in many regards are not casual (Sassen 1994a). It might
be useful to differentiate a casualised employment relation from casual jobs in
that the latter connotes such added dimensions as the powerlessness of the
workers, a condition which might not hold for some of the highly specialised
professional part-time or temporary workers. This is a subject that requires more
research.
A second form in this restructuring of the labour market is what could be
described as the shift of labour market functions to the household or community
(see Sassen 1995; see also King 1995). This is perhaps most evident in the case
of immigrant communities: there is a large body of evidence showing that once
one or a few immigrant workers are hired in a given workplace, they will tend
to bring in other members from their communities as job openings arise. There
is also evidence showing great willingness on the part of immigrant workers to
help those they bring in with some training on the job, teaching the language,
and just generally socialising them into the job and workplace. This amounts to
a displacement of traditional labour market functions such as recruitment,
screening and training from the labour market and the firm to the community
or household. This shift increases the responsibility for and the costs of partici-
pating in the labour force for workers, even if these costs are often not
monetised.13 These are all subjects that require new research.
This casualisation assumes a range of specific forms, some of which have been
documented, and it raises a number of questions about the plausibility of others
which still need to be studied. There is a growing body of research about the
impact of labour market characteristics on employment outcomes which has
established direct links between loose labour markets and the declining econ-
omic position of urban minority groups (Portes, Castells and Benton 1989;
Mitter 1989; Melendez, Rodriguez and Figueroa 1991; Cross 1992; Marie 1992;
Morokvasic 1992; Morales and Bonilla 1993; Social Justice 1993). The fragmentary
evidence available consists of both data on very general trends which at the least
support the plausibility of casualisation, and data on particular, empirically
established trends.
 588 S. Sassen

These developments raise several questions regarding the employment of

immigrants which require more empirical research. Most generally, what is the
impact of casualisation in specific labour markets on employment outcomes for
immigrants and, conversely, what is the impact of the availability of a casualised
labour force on labour market characteristics. More specifically, does the casual-
isation of the labour market interact with, reflect or respond to the availability
of a large supply of immigrant workers, and if so, in what ways does this
happen? Secondly, to what extent are immigrant workers an effective supply for
many of these casualised jobs? And thirdly, how does immigration policy affect
the characteristics of the immigrant labour supply, specifically, in what ways
does it contribute to casualise or decasualise this labour supply.
One of the most extreme forms of the casualisation of the employment
relation, and of the changes in economic organisation generally is the informal-
isation of a growing array of activities, a development evident in cities as
different as New York, Paris, or Amsterdam. This will be briefly addressed
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below.

Informalisation: between new economic conditions and old

regulations
Theories about the informal economy have until recently been grounded in the
incapacities of less developed economies: the inability to attain full modernis-
ation of the economy, to stop excess migration to the cities, and to implement
universal education and literacy programmes. Correspondingly, the growth of
an informal economy in highly developed countries has been seen as an import
through Third World immigrants and their propensities to replicate survival
strategies typical of their home countries. Related to this view is the notion that
backward sectors of the economy are kept backward or even alive, because of
the availability of a large supply of cheap immigrant workers. Both of these
views posit or imply that if there is an informal economy in highly developed
countries, the sources are to be found in Third World immigration and in
backward sectors of the economy.
Rather than assume that Third World immigration is causing informalisation,
what is needed is a critical examination of the role it might or might not play in
this process. Immigrants, in so far as they tend to form communities, may be in
a favourable position to seize the opportunities represented by informalisation.
But the opportunities are not necessarily created by immigrants. They are a
structured outcome of current trends in advanced economies (see Pugliese 1983;
Mitter 1989; Mingione 1991; van Amersfoort 1992; Body-Gendrot, Mung and
Hodier 1992; Boissevain 1992).
A central hypothesis organising much of my research on the informal econ-
omy is that the processes of economic restructuring that have contributed to the
decline of the manufacturing-dominated industrial complex of the post-War era
and the rise of the new, service-dominated economic complex, provide the
general context within which we need to place informalisation if we are to go
beyond a mere description of instances of informal work (Sassen 1994b). The
specific set of mediating processes I have found to promote informalisation of
work are (a) increased earnings inequality and the associated restructuring of
consumption in high income strata and in very low income strata, and (b) the
inability among the providers of many of the goods and services that are part of
 New employment regimes in cities: the impact on immigrant workers 589

the new consumption to compete for the necessary resources in urban contexts
where leading sectors have sharply bid up the prices of commercial space,
labour, auxiliary services, and other basic business inputs.
One major trend is that the decline of the middle class, the growth of a
high-income professional class, the expansion of the low-income population,
have all had a pronounced impact on the structure of consumption, which has
in turn had an impact on the organisation of work to meet the new consumption
demand. Part of the demand for goods and services feeding the expansion of
the informal economy comes from the mainstream economy and the fragmen-
tation of what were once mostly homogeneous middle-class markets (see also
Mingione 1991). And another part of this demand comes from the internal needs
of low-income communities increasingly incapable of buying goods and services
in the mainstream economy.
The recomposition in household consumption patterns particularly evident in
large cities contributes to a different organisation of work from that prevalent in
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large, standardised establishments. This difference in the organisation of work is

evident both in the retail and in the production phase. High-income gen-
trification generates a demand for goods and services that are frequently not
mass-produced or sold through mass outlets. Customised production, small
runs, specialty items and fine food dishes are generally produced through
labour-intensive methods and sold through small, full-service outlets. Subcon-
tracting part of this production to low-cost operations, and also sweatshops or
households, is common. The overall outcome for the job supply and the range
of firms involved in this production and delivery is rather different from that
characterising the large department stores and supermarkets where standardised
products and services are prevalent and hence acquisition from large, standard-
ized factories located outside the city or the region are the norm. Proximity to
stores is of far greater importance with customised producers. Further, unlike
mass production and mass distribution outlets, customised production and
delivery do not facilitate unionising.14
The expansion in the low-income population has also contributed to the
proliferation of small operations and the move away from large-scale standard-
ised factories and large chain stores for low-price goods. For a good part, the
consumption needs of the low-income population are met by manufacturing and
retail establishments which are small, rely on family labour, and often fall below
minimum safety and health standards. Cheap, locally produced sweatshop
garments, for example, can compete with low-cost Asian imports, and the small
immigrant-owned grocery shop can replace the large, standardised, and typi-
cally unionised supermarket. A growing range of products and services, from
low-cost furniture made in basements to 'gypsy cabs' and family daycare is
available to meet the demand for the growing low-income population.
In any large city, there also tends to be a proliferation of small, low-cost
service operations made possible by the massive concentration of people in such
cities and the daily inflow of commuters and of tourists. This will tend to create
intense inducements to open up such operations as well as intense competition
and very marginal returns. Under such conditions the cost of labour is crucial
and contributes to the likelihood of a high concentration of low-wage jobs.15
This would suggest that a good share of the informal sector is not the result
of immigrant survival strategies, but rather an outcome of structural patterns
or transformations in the larger economy (see also Pugliese 1983; Mitter 1989;
 590 S. Sassen

Mingione 1991; Body-Gendrot, Mung and Hodier 1992; Boissevain 1992).

Immigrants have known how to seize the 'opportunities' contained in this
combination of conditions, but they cannot be said to cause the informal
economy. Informalisation emerges as a set of flexibility-maximizing strategies
by individuals and firms, consumers and producers, in a context of growing
inequality in earnings and in profit-making capabilities (Sassen 1994b). Its
expansion invites a broader focus on the growing set of problems in the relation
between new economic trends that promote inequality in profit-making capa-
cities and old regulatory frameworks that do not compensate for this new
sharpening in inequality.
It is then the combination of growing inequality in earnings and growing
inequality in the profit-making capabilities of different sectors in the urban
economy which has promoted the informalisation of a growing array of eco-
nomic activities. These are integral conditions in the current phase of advanced
capitalism as it materialises in major cities dominated by the new advanced
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services complex typically geared to world markets and characterised by ex-

tremely high profit-making capabilities. These are not conditions imported from
the Third World.

Conclusion
Trends in major cities cannot be understood in isolation of fundamental changes
in the broader organisation of advanced economies. The combination of eco-
nomic, political and technical forces that has contributed to the decline of mass
production as the central driving element in the economy brought about a
decline in a wider institutional framework that shaped the employment relation.
The group of service industries that have been the driving economic force in
the 1980s and continue to be so into the 1990s are characterised by greater
earnings and occupational dispersion, by weak unions, and mostly by a growing
proportion of unsheltered jobs in the lower paying echelons. The associated
institutional framework which shapes the employment relation encourages
casualisation rather than the formalisation typical under Fordism. This in turn
contributes to reshape the sphere of social reproduction and consumption which
has a feedback effect on economic organisation and earnings. Whereas in the
earlier period this feedback effect contributed to reproduce the middle-class,
currently it reproduces growing earnings dispersion and labour market casuali-
sation. The new conditions of growth have contributed the elements of a new
class alignment in major cities. It signals the ongoing demand for a low-wage
labour supply even in the most advanced economic sectors; immigrants have
historically been such a supply.

Notes
1 Though sometimes this becomes a highly visible process as in Bombay where a recent special
section of a major newspaper was entitled 'Is Bombay becoming a global city?'. Similarly there
is an emerging debate in Sao Paulo on these issues.
2 Several major service industries produce large proportions of jobs in both the highest paid
occupations and the lowest paid ones (Stanback and Noyelle 1982; Nelson and Lorence 1985;
Sheets, Nord and Phelps 1987; Harrison and Bluestone 1988).
3 There are several detailed analyses of the social impact of service growth in major metropolitan
areas (Stanback and Noyelle 1982; Nelson and Lorence 1985; Fainstein et al. 1986; Sheets, Nord
 New employment regimes in cities: the impact on immigrant workers 591

and Phelps 1987). Using the 1980 Census PUMS File, Sheets, Nords, and Phelps (1987) found that
from 1970 to 1980 several service industries had a significant effect on the growth of what they
label underemployment and define as employment paying below poverty-level wages in the 100
largest metropolitan areas. The strongest effect was associated with the growth of producer
services and retail trade. The highest relative contribution resulted from what the authors call
'corporate services' (Finance, insurance and real estate (FIRE), business services, legal services,
membership organisations and professional services) such that a 1 per cent increase in employ-
ment in these services was found to result in a 0.37 percent increase in full-time, year-round
low-wage jobs and a 1 per cent increase in distributive services, in a 0.32 per cent increase in such
jobs. By contrast, a 1 per cent increase in personal services was found to result in a 0.13 per cent
increase in such jobs and a higher proportion of part-time low-wage jobs. The retail industry had
the highest effect on the creation of part-time, year-round low-wage jobs, such that a 1 per cent
increase in retail was found to result in a 0.88 per cent increase in such jobs.
4 Metropolitan labour markets will tend to reflect a variety of background factors beyond
particular restructuring effects. The most important include their sheer size and density, the
particular industrial and occupational mix of their employment base, the overall state of tightness
or slack in labour demand, and in New York City the representation and characteristics of
immigrant groups. Two key characteristics of the labour markets in major cities, today as well as
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a century ago, are the fluidity and openness which influence the types of activity prospering
there, as well as the labour market experiences of their residents.
5 I have found the notion of circuits for the distribution and installation of economic operations a
useful analytic device to follow economic activities into terrains that escape the increasingly
narrow borders of mainstream representations of 'the' economy and to negotiate the crossing of
discontinuous spaces (1994: Chapters Six and Seven). It allows me to capture the variety of
economic activities, work cultures and urban residential areas that are part of, for instance, the
financial industry in New York City, but are not typically associated with that industry: e.g.
truckers who deliver the software and cleaners have work cultures, engage in activities, and
reside in neighbourhoods which diverge drastically from those of financial experts, yet they are
part of the industry. These circuits are also mechanisms to resist the analytic confinement of the
low-wage immigrant workforce to backward' industries just because the jobs appear as such.
6 Information and knowledge intensive manufacturing in the USA accounts for only 3.2 per cent
of US employment while the rest of manufacturing amounts to about 27 per cent. Note that
women are represented to a much lesses degree in the 'rest of manufacturing' sub-sector than in
the former. This is partly due to the féminisation of the electronics assembly line.
7 Retail trade is expected to add the largest number of jobs, 4.5 million. Nearly half of these jobs
will be for food service workers (cashiers and sales persons in eating and drinking places: these
are not high paying jobs demanding high levels of education). Next comes health services with
an added 4.2 million jobs; within these the fastest growing type of job is home care service, again
mostly a low paying job. Next are business services, with 3.1 million new jobs, which include
both low-wage and high wage industries. One of the growth industries in business services is
personnel supply services, such as temporary employment agencies; another growth sector is
transportation, particularly trucking and warehousing.
8 See note 3 above.
9 Average hourly wages have been stagnant in the USA since 1973, notwithstanding rapid increase
in salaries of new professionals. And as has been documented in the 1990 census, income
inequality increased over the last 20 years.
10 In their detailed analysis of occupational and industry data, Harrison and Bluestone (1988) found
that earnings in manufacturing have declined in many industries and occupations (see generally
Rodwin and Sazanami 1989). Portes, Castells and Benton (1989) report on growth of sweatshops
and homework in several industry sectors in major US cities (see also Fernandez-Kelly and Garcia
1989; Sassen 1994b).
11 The numbers of workers who are not employed full-time and year-round has increased. Part-time
work rose from 15 per cent in 1955, to 22 per cent in 1977 and 24 per cent in 1986. Over the last
few years the government has implemented a number of decisions which promote the growing
use of part-time and temporary workers. Circular A-76 by the Office of Management and Budget
ordered all agencies to raise their use of private firms for service work unless the agency could
demonstrate that it could do it more economically in-house. The result has been a growing
sub-contracting out of such services as food preparation, building maintenance, warehousing,
data processing. They involve types of jobs that can be organised in terms of part-time or
temporary work hours, and, being labour intensive, can cut costs significantly by reducing wages.
 592 S. Sassen

In 1984 the government implemented a two-tiered wage system in the United States Postal
Service, one of the largest employers among government agencies. The purpose was to create
more flexible work schedules. The second tier paid wages 25 per cent below the previous
standard. In 1985 the government implemented a regulation authorising the employment of
temporary workers at all levels for up to four years and in fact urging agencies to do so
'whenever possible'.
This represented a severe erosion of the contractual arrangement regulating the Civil Service
guarantee of permanent employment after a probationary period. Finally, in 1986 the government
implemented regulations that make it easier for companies to use homeworkers. This is
reminiscent of the privatisation of these types of services in London, where many of these jobs
went from being full-time, year-round regulated government jobs with fringe benefits, to
part-time or temporary jobs in subcontracting firms with no fringe benefits and lacking the
regulatory protection of the state.
12 There is now a considerable body of studies with a strong theoretical bend (Sassen 1994b) which
argues that the declining centrality of mass production in national growth and the shift to
services as the leading economic sector contributed to the demise of a broader set of arrange-
ments.
13 There is an interesting parallel here with the analysis in Gershuny and Miles (1983) showing that
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one of the components of the service economy is the shift of tasks traditionally performed by the
firm onto the household: e.g. furniture and even appliances sold unassembled to be put together
by the buyer.
14 There are numerous instances of how the increased inequality in earnings reshapes the consump-
tion structure and how this in turn has feedback effects on the organisation of work, both in the
formal and in the informal economy: the creation of a special taxi line that only services the
financial district and the increase of gypsy cabs in low-income neighbourhoods not serviced by
regular cabs; the increase in highly customised cabinet work in gentrified areas and low-cost
rehabilitation in poor neighbourhoods; the increase of homeworkers and sweatshops making
either very expensive designer items for boutiques or very cheap products.
Perhaps one of the clearest illustrations of the spatial impact of these trends towards polaris-
ation comes from a recent study on commercial bank branch closings and openings in the New
York Metropolitan area presented to the New York State Legislature. It found a wave of bank
branch closings even stronger than the one that took place in the early 1980s which left several
poor and minority communities without any banking services, in the leading financial centre of
the country. While the earlier wave of branch closings was concentrated in low-income areas, the
latest one affected the more modest segments of middle-income areas. Five major New York City
banks accounted for all except one of the closings of commercial branches in New York City
neighbourhoods with more than 50 per cent minority populations. However, branch services
have increased in the suburbs and in high-income areas in New York City. Banks have also been
opening numerous 'personal financial centres' or 'private banking centres' in affluent areas of the
city.
15 This tendency was confirmed, for instance, by Sheets, Nord and Phelps (1987) when they found
that each 1 per cent increase in retail jobs resulted in a 0.88 per cent average increase in below
poverty level jobs in the 100 largest metropolitan areas in 1980.

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