On 7/20/05, Martin Hart-Landsberg wrote: > Just to be clear, I am not advocating promoting the destruction of labor > movements or labor laws, not am I confused or surprised by the IMF push to > create a labor market most conducive to profits.
no one was casting asparagus at you, Marty! > However, what interests > me is that the IMF and its supporting cast have been busy developing > indices of labor rigidity and correlating them with growth. These indices > seems strange to me. For example, it is hard to imagine that Mexico has a > rigid labor market when way more than half of workers work in the informal > labor market and most unions work closely with the owners. So, I was > looking to learn if there were people or articles that critically examined > this line of attack. I haven't seen the recent literature. But the IMF index makes some sense. In a simple model, such as the Harris-Todaro model of rural/urban migration, the higher wages are in the urban sector, the more unemployment there is, all else constant, as rural people move to the city in hopes of getting a job there. (It's the hopes that encourage the move, since there really aren't enough jobs.) In the original story, rural/urban migration led to _open_ unemployment, but most economists would say nowadays that this is so-called "hidden unemployment" in the form of the informal sector. Also, emphasis is put on the _rigidity_ of urban wages (and benefits). So you see rigidity in the "urban" sector (which might include mine workers, elite agricultural workers, etc.) _causes_ the informal sector to be large.Lots of protection for the "insiders" causes misery for the "outsiders." I would guess that the IMF is measuring only the rigidity in the elite/urban (insider) labor market. Of course, instead of equalizing labor conditions upward, the IMF wants to equalize them downward. And they start with a oversimplified model of labor-power markets, one that ignores, for example, "push" factors in the rural/outsider sectors (such as the forced commercialization of agriculture, what used to be called primitive accumulation). -- Jim Devine "Science is the belief in the ignorance of the experts" -- Richard Feynman
