Regulation or Deregulation

I reckon everyone who talks about deregulation of the Labor market should read this Ross Gittins piece.

As he says;

Here's the point: the labour market has always been highly regulated. It remained highly regulated under Work Choices and it's still highly regulated under Fair Work. It's always likely to stay highly regulated for a simple reason: unlike all other markets, the labour market deals with human beings rather than the exchange of inanimate objects.

As a matter of politics, common humanity and common sense, the treatment of people in the labour market will always be carefully regulated. We are, after all, running the economy for the benefit of people.

What changes from time to time is not so much the degree of regulation as the objectives of that regulation. There's a fundamental imbalance of bargaining power between an individual worker and even the smallest employer.

The scope of regulation is about how that imbalance is addressed. The way "the market" deals with it is actually that workers have an incentive to collectively bargain.

The Australian innovation was the concept of conciliation and arbitration as an alternative to simple clashes of collective power.


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