Monday, 17 September 2012

The Indian Rubber of Flexible Labour Markets



Almost everyday there is talk of how much more flexible our labour market needs to be to accommodate growth in jobs. I have been thinking about this and something seems wrong. Mind you, I am no economist but the sums do not add up.

There is less money to spend because salaries are being frozen, people are having to take pay cuts, people are losing their jobs and the expenditure of people on benefits is being slashed. Where is the consumer spending money  going to come from if labour markets are being squeezed, bent and twisted?

We can't end up with rock bottom wages like it is in China and India because the cost of living in the UK is higher. So where is the sensible pressure for competition for the UK to have even more flexible labour markets coming from? A neoliberal agenda or a realistic economic necessity? 
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