Free Labour markets Essays

Free Labour markets Essays Free Labour markets Essay Free Labour markets Essay Do free labour markets yield better Jobs? What is a free labour market? Free Labour Markets refer to markets in which employees enjoy a great deal of freedom to manoeuvre. A free labour market is one which is flexible and can adapt quickly to fluctuations in economy, society and production. Free Labour Markets generally exist in Liberal Market Economies where hierarchies and competitive market arrangements exist. Britain, The US and Ireland all have Liberal Market Economies. On the other hand, there are Coordinated Market economies which I will go on to explain later. (Kleinknecht, A (2009) Flexible labour arkets: good for Jobs, bad for innovation? Lisbon Civic Forum, Available from: ( lisboncivicforum. org/lisbonowkleinknecht_pr. pdf) So, do these free and flexible labour markets yield better Jobs? I am of the opinion that they do not. I will firstly discuss the evidence to show that countries with Coordinated Market Economies and rigidity have better working conditions and thus yield better Jobs. Secondly, I will go on to discuss the failure of free labour markets and highlight some of their disadvantages. Coordinated market economies rely on formal institutions to regulate the market and coordinate the interaction of firms and irm relations with suppliers, customers, employees, and financiers. These exist in countries such as Denmark, Sweden and Germany. There are many benefits to this. Firstly, Coordinated Market Economies provide workers with a sense of security as there is very little hiring and firing. : This allows firms to concentrate on long term goals and workers tend to stay in the firm for longer allowing them to be more innovative. ( answers. com/topic/coordinated-market- economy#ixzz28FUWlJJY). What really strikes me as a key difference between free labour markets and Coordinated Market Economies is the strong presence of Trade Unions in the latter. 74% of employees in Finland, 71% in Sweden and 67% in Denmark are members of a Trade Union. Comparing that with Just 34% in Ireland and 8% in France it is clear that they have serious power. Fulton, L. (2011) Worker representation in Europe. Labour Research Department and ETUI Available at: http:// www. worker-participation. eu/National-lndustrial-Relations/Across-Europe/Trade- Unions2) The Unions make labour relations much more cooperative and give employees a voice that is heard. The Trade Union presence has also contributed greatly to the lack of wage inequality in Coordinated Market Economies. All of this yields better Jobs. I will now go on to focus on the failure of free labour markets at various instances. Liberal Market economies exist in the USA, Ireland and Britain. One only has to look at the latest unemployment fgures to see that something is not working here. Irelands unemployment rate is at 14. 8%, The United States and UKs is at 8. 1%. If one compares this with the likes of Denmark (4. 1%) or Norway (3%), it is clear that free market economies are not yielding better Jobs, in fact they are not yielding many Jobs at all. (Unemployment Rates, List by Country, Trading Economics, New York. Available at: radingeconomics. com/ unemployment-rates-list-by-country) or cooperation. While earning can be extremely high in these countries, the ECW fgures show that this only increases wage inequality. The Dispersion of Work Quality in Denmark in 2010 was . 135 while in Ireland it was as high as . 225 and in Spain it had reached 0. 249. (European Working Conditions Surveys (EWCS) http:// www. eurofound. europa. eu/surveys/ewcs/index. htm) This inequality creates a large divide between low an d high earners and disrupts the unification of workers. While there are positives and negatives to both types of market, and I have only touched on a few of the arguments that have been put forward, I feel that the advantages of a Coordinated Market Economy far outweigh the disadvantages. The focus on long term goals and on the employee and the greater sense of the common good is why I feel that these markets most definitely yield better Jobs than free labour markets can provide. List of References Kleinknecht, A (2009) Flexible labour markets: good for Jobs, bad for innovation? Lisbon Civic Forum, Available from: sboncivicforum. org/lisbon09/ kleinknecht_pr. pdf answers. com/topic/coordinated-market- economy#ixzz28FUWlJJY L. Fulton (2011) Worker representation in Europe. Labour Research Department and ETUI Available at: worker-participation. eu/ National-Industrial-Relations/Across-Europe/Trade-Unions2 Unemployment Rates, List by Country, Trading Economics, New York. Available at: http:// www. tradingeconomics. com/unemployment-ra tes-list-by-country European Working Conditions Surveys (EWCS) eurofound. europa. eu/surveys/ewcs/ index. htm