This chapter explains how economies (or savings) of growth are the drivers of expansion, as growth enables firms to remain competitive. This relentless pressure to expand has existed since the rise of capitalist production replaced feudal methods.

In the eighteenth century, before the Industrial Revolution, construction markets in Britain were regulated by guilds of master craftsmen. The guilds controlled each trade, prices and quality. They also controlled the number of journeymen and apprentices who could be employed by each master craftsman. This limited the ability of any one master to gain power over his competitors. However, from approximately the 1750s to the 1820s, the Industrial Revolution and the Napoleonic Wars did much to undermine the power of the guilds, and gradually they were replaced by a market system.

Since then markets have remained competitive, favouring the most efficient firms and often the most ruthless. Ever since the arrival of the market in construction there has been pressure on firms to increase sales, increase profits and raise the productivity of staff on site and in contractors’ offices to improve competitiveness. The ever-present pressure to increase sales implies the need to increase the size of the firm, as measured by the size of turnover, number of people employed, value of assets or some other yardstick. Under market conditions it has never been possible for firms to rest on their laurels, take it easy and relax.

How firms meet this challenge of continuous expansion is explained in this chapter. It is a challenge that has a price, as society today becomes increasingly aware of the limits to growth caused by environmental degradation, the non-sustainability of declining resources and pollution. Increasingly sustainability has become an issue in construction, and writers such as Kate Raworth (2017) point out that the economy is simply not able to expand its consumption of resources at its current rate and dump the resulting waste in the environment. Such writers describe an attitude towards the economy as a whole that questions the need to continue on a growth path indefinitely.

The basic underpinnings of economic theory are essential to understand how the construction sector works. However, although concepts such as demand and supply, which are a key part of standard economic theory, are necessary in order to view the construction sector, they are not sufficient on their own given the complexity of the industry.

An introduction to supply and demand and market competition helps to highlight the differences between construction and other sectors of the economy. A description of how markets actually operate in construction demonstrates a more realistic account of what can be observed in the building industry compared to a simple theoretical repetition of supply and demand, which nevertheless still contributes to an understanding of construction and property markets.

The laws of demand and supply can be used to illustrate how a market for any product operates. In this simplification or model of the world, there are only two groups of people: those on the supply side and those on the demand side. The first group are those willing and able to produce and sell a product or service. They organize production and sell the finished output. Organizing the production process means bringing together or combining the various elements that need to be used in the production process. This means bringing the factors of production or different types of resources together to manufacture or construct a building or structure. The factors of production consist of four categories. They are land, labour, capital and enterprise, although many people have argued that there are only three factors of production, namely land, capital and labour, and some have even argued that there are only two factors of production, land and capital. Land, as a factor of production, includes the location where production takes place and the mineral resources under the surface. The construction industry is unusual when compared with most industries in that contractors do not usually own or rent the location of the site where their work takes place, except for their head offices. It is the developer who purchases the site and hires the contractor to build for them. The return to land as a factor of production is rent.

Construction can be seen as an industry concerned with the production of the built environment. As an industry, its inputs cover a large variety of skills and materials. Its output covers many different types of products and services. As a sector of the economy, it includes the assembly of buildings and structures on site, the production of materials and building components and, indeed, the whole supply chain. This includes architects, surveyors, civil and structural engineers, plant and tool hire, construction product manufacturers and distribution. The construction sector is treated as one sector but, in fact, it covers a wide variety of work across many different areas. Construction output covers everything from the building of housing, commercial and industrial properties, education and health facilities to the building of vital infrastructure for water, energy, roads, rail, telecommunications and ports.

Whatever an individual or collection of individuals may wish or need to do in the economy or society, they will require construction to have taken place first to be able to do it. People need houses to live in, schools and universities to undertake learning, clinics and hospitals to make or keep us physically fit and comfortable, and offices to work in and shops to buy goods in. Even if we work from home and shop online then we still need the internet infrastructure to have been built. In addition, we need roads to drive on, rail infrastructure for trains to travel on, clean water for drinking and bathing, electricity and gas to power heating and lighting. As the built environment has grown over many years, the current buildings and infrastructure have developed over time, and, as a consequence, the repair, maintenance and improvement of existing buildings and infrastructure is also vital.

To measure the scale of investment in construction as part of the whole economy, the United Kingdom National Accounts, also known as The Blue Book (see Office for National Statistics 2017), contains a chapter entitled “Gross Fixed Capital Formation” (GFCF), which presents the total invested by the economy in plant and equipment and buildings and structures.

The economic environment is dynamic and ever-changing. Consistent periods of growth or decline are predictable but turning points are difficult to determine with a high degree of accuracy. Economists refer to these significant changes in the economic environment as the business cycle. Economic activity can be measured in terms of a number of variables, including turnover, employment, profits or losses. In terms of the construction industry, the variables used to measure business cycles are generally construction output (see Chapter 2), new orders and employment. The basic business cycle measures variation in activity from quarter to quarter or year to year. A number of business cycles have been identified according to the number of years separating the years of peak activity in the industry, which contrast sharply with construction industry recessions. Recessions in the UK are defined as two or more consecutive quarters of decline in construction activity, utilizing construction output as the measure.

Often business cycles are seen in terms of booms and slumps. However, these booms and slumps are difficult to determine while they are occurring. Economists are always on the lookout for forward-looking indicators to identify turning points. But, in general, the length and breadth of booms, and particularly slumps, are finally determined in hindsight, when analysing the historical data. What we are able to say for certain at any one point in time is that the construction industry, or wider economy, is growing or declining. Output is rarely stable even in the short term, often displaying an upward or downward trend. The key problem for economic forecasters is determining the rate of growth or decline and these turning points. Periods of growth may turn into periods of decline for a variety of reasons: lack of demand arising from market saturation or changes in government policies; oversupply because of investment overestimating future demand or inventory management; and changes in consumption and savings.

A key reason for understanding business cycle fluctuations is to help in mitigating their effects on the firms, the industry and wider economy by anticipating future demand, and supply in particular.

It is somewhat trite – but very true nonetheless – to observe that human factors are the most important element in the success of an economy. It is the labour of a workforce that adds the greatest value to most goods and services. It is because of a workforce’s education, training, employment experience, and continued development that an economy remains effective and, perhaps most importantly, is internationally competitive. It is entrepreneurialism and innovation, driven by particular individuals or distilled across an organization or culture, which is most crucial in expanding and developing an economy and improving real wages. It is via positive but appropriate rates of population growth, suitable immigration policies, and other demographic change that a workforce maximizes its economic potential – and moreover, such factors are also important in ensuring social stability and in assisting societies to respond to the pressures of economic changes.

The Arab states of the Gulf possess a unique demographic profile, characterized by a range of demographic and human capital features that contain both positive and negative features. The degree of economic reliance on foreign labour is perhaps the most obvious, but important too are (indigenous) population growth rates, labour market policies, the education and training framework, and gender and intergenerational dynamics. These occur in a framework set by the political order, and by structural and historical dynamics. Culture matters too, to the extent that it shapes corporate and institutional cultures and liberates or constrains the ambitions of societal groups and forces. The purpose of this chapter is to explore some of the more important human factors that have shaped the Gulf ’s economies, and which will be key elements – perhaps even deciding ones – in determining its prospects in the future.

WEALTHY SOCIETIES?

As already discussed, the Gulf economies are, by conventional measures, very wealthy. Nominal GDP per capita varies by country, from upper-middle income levels in Bahrain, Oman and Saudi Arabia, to levels in the UAE, Qatar and Kuwait that are comparable to the developed OECD economies. Infrastructure, capital, and public utilities are of a high standard: to a visitor, public spaces and infrastructure generally seem physically comfortable, and state services appear to be freely available and good quality.

In most factories, offices and shops the same workforce provides the same product or service every day and occupies the same work space, where they can be found and contacted. However, in construction, as work proceeds, the labour force is not fixed. Different groups of subcontracted labour may come together for only one project and then move on to work in new locations. Moreover, specialist firms may be present on site only for relatively short periods, as long as their services are required. These constant changes of work locations and people lead to increased supervisory and management costs and can reduce productivity, often unavoidably.

Often the technical problems on site mean that the workforce has to learn on the job and adjust to the new work environment very quickly, making it difficult to take advantage of all the technical skills and experience they may have. As every project is unique in one way or another, it is always necessary to adapt to the particular circumstances and problems thrown up by the introduction of new methods or materials or plant and machinery. For example, when a new material or building product system is introduced, it will have an impact on some other parts of the building process and the labour force, who are tasked with the job of integrating the new product or method with existing building methods and materials.

Construction project management is, therefore, more challenging and complicated than management in other industries, made even more challenging for project managers by very low profit margins, which imply that any errors of management can remove the little profit margin the firm might achieve not only on a project but also for the contracting firm, as the low profit margins in construction make it very difficult to make up for the losses on individual projects by increasing the price on other projects. If one project loses £1 million and the firm’s profit margins are only 2 per cent, then the firm would have to increase turnover by £50 million to make up for the loss, by either increasing prices or winning a great deal of work, just to make up for the losses on one project.

This book examines the role and contribution of collective bargaining to gender equality in the context of globalization and women’s struggles, organizing and advocacy in trade unions. It tracks how union collective bargaining agendas have shifted to reflect women’s struggles for equality, providing avenues for sustainable gender equality gains. Building on the existing understanding of the role that women in trade unions have played in developing new agendas for “equality bargaining”, it reviews recent collective bargaining breakthroughs in areas such as equal pay, work–life balance and gender-based violence in the world of work. While the focus is mainly on European countries, initiatives related to union organizing and negotiating for women workers in developing country contexts and through global supply chains are integrated throughout the book, reflecting increased attention to this work over the past two decades. Nonetheless, it remains true that the vast majority of women, whether in paid employment, self-employment or informal work, do not benefit from collective bargaining coverage, particularly in the global south and in fragile states.

The authors draw on over three decades of engagement on equality issues with trade unions across the world. Based on primary evidence, original research and surveys, as well as the authors’ own participation in global union campaigns on issues such as pay equity, maternity protection, organizing self-employed and informal women workers, on migrant workers and on gender-based violence, the book also includes insights gained as a result of engagement with recent national, European and global social dialogue initiatives.

Despite the many challenges, it is important to recall that trade unions are the largest collective organization of women across the world. Collective bargaining remains critically important in the globalized economy, precisely because of new employment patterns and the increasing incidence of precarious work. By pointing to recent promising developments in collective bargaining, the book also reflects on some ways forward for collective bargaining to play a more central role in achieving gender equality.

UNION CONTRADICTIONS AND CHALLENGES IN RELATION TO GENDER EQUALITY

Trade unions were formed in the late nineteenth century to protect the interests of skilled male craft workers, a role later extended to the predominantly male workforce in manufacturing, transport and the public sector, mainly in Europe and North America.

By positioning sex work as a consensual adult financial exchange, the client in sex work discourse is regarded as a legitimate customer paying for a service like any other. From the early 1980s sex work advocates argued that once the client abides by the terms of the exchange and pays the appropriate price, he is fulfilling his side of a regular commercial transaction in which both people exercise agency and negotiate power. The buyer exercises his paying power in gaining access to the bodies of women and the woman has power in her ability “to set the terms of her sexuality, and to demand substantial payment for her time and skills” (Alexander 1987: 188); “women – and whores – do not exist to be sexually used by men, but any sexual interaction, including a paid one, benefits from negotiation” (Queen 1997: 129). The claim that the clients’ objectification of the sex worker is problematic is disputed, as this is considered a normal part of any sexual interaction; sex work involves “consensual objectification” (Hartley 1997: 64). The commercial sexual contract is regarded as an equal transaction where money is given in exchange for an agreed set of sexual acts. This discourse continues to the present day. Sanders (2008) contends that the “social role of commercial sex” should be recognized and safe legal avenues provided to ensure that the relationships between sex workers and their clients “can be established with minimal harm and destruction” (414). Thus, it is argued that commercial sex “can enhance the quality of life of men who buy sex” and sex workers can engage with “safe customers who will not breach the contract through sexual misconduct, financial exploitation (e.g. not paying), abusive language, or aggressive behaviour” (ibid.: 414). Recognizing sex work as a legal occupation will encourage and enable the buyer to become “an accountable active participant who has responsibilities to himself, the sex worker, other sexual partners and a wider responsibility to respect women in all areas of society” (ibid.: 414)

THE CLIENTS’ DEMAND FOR INTIMACY

Whereas on the one hand, a business and consumer discourse are replete in sex work literature, there is also an emerging emphasis on the clients’ demand for intimacy within the indoor setting.

This chapter discusses three main themes that are important components of recent bargaining and collective agreements on gender equality: (1) closing the gender pay gap; (2) maternity protection, parental leave and work–life balance; and (3) gender-based violence at work. Despite the external environment leading to the decentralization and weakening of bargaining in many countries across the world, in recent years bargaining has become more gender-focused. The bargaining agenda has been extended to include new issues that reflect the intersection of the private area of family/home and the public area of work, thereby extending the scope of the employment relationship. In particular, domestic violence is a new workplace bargaining issue that “widens the reach of the employment relationship by recognizing the intersection of the private and work domains and represents a qualitative new step” (Pillinger, Schmidt & Wintour 2016).

CLOSING THE GENDER PAY GAP THROUGH COLLECTIVE BARGAINING

Collective bargaining has played a role in closing the gender pay gap, and as discussed previously, there is wide agreement that centralized bargaining generally has a positive impact on gender pay inequalities (Hayter 2011; Pillinger 2014; Ponzellini, Aumayr & Wolf 2010). A reduction in the gender pay gap from 2004 to 2008 can be attributed to three main factors: (1) working in the public sector; (2) membership of a trade union; and (3) working in a large firm (Olsen et al. 2010). The success of bargaining strategies is dependent on a range of factors (discussed in Chapter 1), as well as the level of union commitment to the issue and the proportion of women in a sector (Dawson 2018; Elvira & Saporta 2001; Rubery & Koukiadaki 2016).

However, the trend towards the individualization of pay and a lack of pay transparency makes the issue of pay inequalities between women and men complex to tackle, particularly in the context of the economic crisis and a general trend towards rising wage inequalities (Antonczyk et al. 2010).

The Gendered Economy is a new path-breaking series of short books which critically examine our understanding of the economy through the lens of gender and expose the androcentric biases within mainstream and heterodox economic analysis.

This book contributes to the series by providing a trenchant critique of the framing of prostitution as a form of labour, similar to other forms of service/care work, which can or should be regulated within a labour rights framework. It adds to the contributions feminist economists have made to critiquing the market economy and the commodification of more and more aspects of life. This book is timely given international policy developments around legalizing and regulating “sex work”. It is also timely given that the intersection of globalization, poverty and migration has resulted in an exponential rise in the number of migrant women within low status gendered occupations in post-industrial economies where the possibilities for choice and agency are highly constrained.

The Sex Economy shows not only how economic relationships, actions and institutions are directly affected by gender norms but also challenges many of the tenets that underpin the interpretation of how economies function. The commercial sex trade is highly gendered: demand is almost exclusively male, and supply is made up predominantly of women plus a small minority of young men and Trans people. The discourse surrounding prostitution has increasingly become one of market transactions, which are discussed both as a legitimate economic business and as employment comparable to other forms of low-paid work. So much so, that in some countries, such as Germany and the Netherlands, it has been regulated within a labour-rights framework. Presenting primary data, extensive comparative reviews of policy approaches and the evidence emerging from countries where the state has sought to legalize and regulate sex work like any other sector of the economy, this book argues that there is an urgent need to interrogate the implications of this approach.

More fundamentally, this book grapples with questions asked by both economists and philosophers regarding the limits of markets.