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Labour Market Flexibility

  • Philip B. Whyman
Chapter

Abstract

Acceptance of the existence of a supply-side determined equilibrium rate of unemployment by Third Way economists implies both a rejection of Keynesian macroeconomic policies and a renewed emphasis upon supply-side interventions intended to promote market clearing through reducing imperfections, whilst modifying institutions and policies to promote productivity growth and higher rates of employment consistent with a low rate of inflation. Whereas ‘old monetarism’ perceived market imperfections as being associated with the activity of trade unions, the generosity of social security benefits and labour regulation (i.e. minimum wages, employment protection legislation), for ‘new monetarism’ the market failure is a lack of training and skills (Arestis and Sawyer, 1998: 37). In this scenario, the rate of employment is determined through the interaction of market forces in the labour market, and therefore the attempt to reduce unemployment should be located in this micro-market.

Keywords

Labour Market Minimum Wage Trade Union Aggregate Demand Labour Market Policy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Copyright information

© Philip Whyman 2006

Authors and Affiliations

  • Philip B. Whyman
    • 1
  1. 1.Heaton Norris, StockportUK

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