Labor Power - Labour Power and Labour Market Flexibilisation

Labour Power and Labour Market Flexibilisation

The commercial value of human labour power is strongly linked to the assertion of human needs by workers as citizens. It is not simply a question of supply and demand here, but of human needs which must be met. Therefore labour costs have never been simply an "economic" or "commercial" matter, but also a moral, cultural and political issue.

In turn, this has meant that governments have typically strongly regulated the sale of labour power with laws and rules for labour contracts. These laws and rules affect e.g. the minimum wage, wage bargaining, the operation of trade unions, the obligations of employers in respect of employees, hiring and firing procedures, labour taxes, and unemployment benefits.

This has led to repeated criticism from employers that labour markets are over-regulated, and that the costs and obligations of hiring labour weigh too heavily on employers. Moreover, it is argued that over-regulation prevents the free movement of labour to where it is really necessary. If labour markets were deregulated by removing excessive legal restrictions, it is argued that costs to business would be reduced and more labour could be hired, thereby increasing employment opportunities and economic growth.

However, trade union representatives often argue that the real effect of deregulation is to reduce wages and conditions for workers, with the effect of reducing market demand for products. In turn, the effect would be lower economic growth and a decline in living standards, with increased casualisation of labour and more "contingent labour". It is argued that, because the positions of employees and employers in the market are unequal (it is usually easier for an employer to loose an employee than an employee to loose an employer), employees must be legally protected against undue exploitation. Otherwise employers will simply hire workers as and when it suits them, without regard for their needs as citizens. A further twist in some countries is that unions are part of the political establishment, and not interested in collecting complaints and suggestions from individual employees, employing staff in proportion to dues received, backing employees' legal cases, or rocking the boat in their public statements. For example in China some workers are in prison for criticising the official unions.

Often the demand for "labour market flexibility" is combined with the demand for strong immigration controls, to block any movement of labour which would be only a burden for capital accumulation. The term "flexibility" is used because, while capital must be able to move freely around the globe, the movement of labour must be strictly controlled. If that control does not exist, it is argued, it could mean additional costs to employers and taxpayers.