Globalization, labor market risks, and class cleavages

Advanced capitalist democracies face important challenges in the modern age. In addition to the domestic changes on national labor markets (see in particular the introductory chapter of this volume, as well as Chapter 2 on the long-term consequences of structural change and Chapter 4 on occupational change in the service economy), they are also embedded in a worldwide process of increasing economic and cultural integration. This process of globalization has not only created new opportunities and considerable constraints for policy makers in democratic capitalist states. Globalization has also produced new lines of division among voters. The deep and wide-ranging processes of economic liberalization and cultural exchange have been shown to reorder preferences and priorities among the electorate and, in doing so, have shaken up existing cleavage structures (e.g., Rogowski 1989; Kitschelt and McGann 1995; Mughan and Lacy 2002; Kayser 2007; Kriesi et al. 2008; Häusermann and Walter 2010; Margalit 2011). In this chapter, we focus on the impact of globalization on voter preferences. Similarly to the chapter by Daniel Oesch in this volume (Chapter 4), we thus contribute to the general analytical framework of the book - as developed in the introductory chapter - by explaining how structural change affects the demand-side constraints policy makers face in advanced capitalist democracies. More specifically, we consider the consequences of trade, foreign direct investment, and immigration, which have had immediate effects on both the structure of labor markets and- thereby - voter preferences in advanced capitalist democracies. As previous scholars have argued and as we discuss later, the globalization of production and the international flow of labor generate gains and losses in ways that cut both along and across traditional class cleavages, especially when such globalization has uneven sectoral effects. To identify who benefits and who loses from globalization, scholars have investigated effects on the basis of skills, industries, and occupation.