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November 12, 2019


Chris Purnell

Hidden unemployment is laughingly called a 'pool of labour' where employers can go fishing for cheap and cowed workers. No wonder this 'full' employment situation hasn't produced an up-tick in wages.


At the bottom, a lot of this is about the perverse incentives in the benefits system discouraging people from doing more than 16 or 30 hours. At the top, a mix of the pensions Lifetime Allowance coming down in stages and good old fashioned rent-seeking and perverse incentives in certain industries and professions (a gifted City trader becomes so wealthy he/she need never work again much faster than a mediocre one).

Brexit may well help. Assuming corporatist-wing Tories remain marginalised, it's likely that employers will be starved of low-waged imported labour, forcing them to bid up pay for the settled population, encouraging people to do more hours (perhaps helped by changes to benefit rules) and to return to the labour market or stay longer in it. And if there's a focus on more liberal migration rules for the highly skilled, we may start to see downward pressure on incomes at the top, which paradoxically will keep the affluent in the labour market for longer.

Ander Broadman

I think this is another example of reality revealing what it is politicians are really working for.
The dominant ideology at play since the early 1980’s had been “flexible labour markets”.

But in reality, what’s been happening are policies shifting power to employers. If labour market flexibility is what you’re after, as Chris rightly says, the end result of “labour market negotiations” is that employers would be offering jobs that better match employees preferences. Instead they are able to offer terms that straightjacket workers into unfavourable conditions.
Of course what all that talk of labour flexibility WSJ really about was rigging the game more to bosses and capitals favour.

Of course, union policies of the 1970s weren’t asking for the sort of things I suspect Chris is asking for here, but that was the 1970s, and in principle an effective trades union system could as well be negotiating appropriate “un-straightjacketed” hours for workers as they were at negotiating petty rules about job specs in 1960s factories.



Brexit would only help in that scenario if those workers who might benefit were organised so as to do so, otherwise unscrupulous employers will simply pit one set against the other as well as leaning on the government to encourage immigration from outside of Europe.

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