Problem

Deregulated labour market

Other Names:
Minimal labour laws
Unregulated conditions of work
Labour market flexibility
Nature:

The more deregulated the labour market, the more unstable the pattern of employment, the more income inequality and the more marginalized unskilled workers, particularly males, become, with all the associated social consequences; the more regulated the market, the more the opposite holds. Both systems have suffered from a parallel fall-away in economic growth. All industrialized countries, whether their welfare and labour laws were minimalist or not, have suffered rises in unemployment in the 1980s and 90; hence the claimed relationship between low social cost and low unemployment also breaks down.

Incidence:

Compared with Europe, the deregulated labour market of the USA has created vast numbers of unskilled, low-paid jobs in the service sector, which are held mostly by women. If the numbers of adult men aged between 25 and 54 who declare themselves economically inactive are added back into the unemployment statistics, the average US unemployment rate over the 1980s of some 5 percent more than doubles to over 12 percent (France and Germany with highly regulated labour markets having comparable rates of 9 percent and 12 percent). The combined rate of the unemployed and non-employed in the deregulated UK is just under 15 percent.

Claim:

The regulated labour market is one of the great acquisitions of western civilization. The attempt to regulate the terms and conditions of employment and to underwrite the risk and hazard of sickness and joblessness which beset everyone in the market economy is a great social achievement. It has enfranchised and liberated many millions; the return to the dark age of uncertainty and insecurity in the name of a false notion of market efficiency is to be resisted absolutely. For not only is it retrograde, there is also no basis in evidence, theory or history for the proposition that deregulated labour markets operating in conditions of price stability produce full employment.

 

Problem Type:
F: Fuzzy exceptional problems
Related UN Sustainable Development Goals:
GOAL 8: Decent Work and Economic GrowthGOAL 16: Peace and Justice Strong Institutions
Date of last update
12.12.2017 – 14:36 CET