European Central Bank (ECB) President Mario Draghi and Vice President Vitor Constancio at a press conference in ECB HQ in Frankfurt, Germany, on Dec.14, 2017. Xinhua/ Press Association. All rights reserved.Ten years after the inception of the ‘Great Recession’ we can clearly see some of its political effects. The economic woes of the developed world have enhanced the chances of leaders like Donald Trump, contributed to Brexit and its unfolding, and boosted ‘populism’ in the West and beyond. How far have economic problems influenced the rise of populism? Is there any kind of long-term dynamic?
We claim that one of the causes of the dissatisfaction with democracy’s current state is the existence of two or more labour markets or, to use a more ‘technical’ term, labour market segmentation.
The idea that there would be many labour markets, each of them being structured as a separate segment, gained popularity in US universities in the 1960s-70s. Economists noticed the existence of a primary market with competitive, high-skills jobs for highly-educated professionals, and a secondary market of jobs requiring lower skills, that are less competitive and often occupied by women or marginalised groups – minorities, the youth, migrants. This tendency has gradually expanded from the US to the rest of the west, Europe, and now potentially the global world. Globalising competition has reproduced dualism and segmentation all over the world.
