Where’s the issue?

One of the two key proposals of the job summit is to institute a nine day fortnight for manufacturing workers. Presumably the idea is to increase the flexibility of working hours and thus increase the number of people in employment.

The obvious question is, ‘what is the market failure here?’ Employers and employees are free to choose their working hours. Employers may employ more people for fewer hours if they so wish, yet they seem not to. Why then would we force people to work fewer hours?

The government must believe that there are some rigidities in the labour market for manufacturing that preclude such employment arrangements. The first thing I think about when I think about rigidities in blue-collar work is union power. But unions are the voice of the worker; why would they not be pushing for nine day fortnights if it were better for their members?

We’ll have to wait for more information about the policies but, so far, it looks like the summit could have spent more time thinking about the problems rather than rushing to look for solutions.

  • Well you’re right, I think the failure is some stickiness. And I believe the unions do tentatively support this idea, provided the Govt. matches the drop in pay.

    In general though, I would imagine the reason things like this grate with unions is the same reason they still push for pay rises in recessions. There’s no union for people made unemployed by union agitation.