Urban and Regional Prosperity in a Globalised New Economy
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Urban and Regional Prosperity in a Globalised New Economy

Edited by Roger Sugden, Rita Hartung Cheng and G. Richard Meadows

There is currently a popular view that the world is undergoing profound changes in the fundamental relationships upon which it is organised. In particular, there is widespread talk of a ‘globalised’ economy, facilitated by and associated with ‘new’ technologies and practices. There is a further consensus that within this ‘globalised’, ‘new’ economy, regionalisation in some form is important. The aim of this volume is to address these topical issues, presenting perspectives from which they can be analysed and exploring specific aspects in greater detail. The contributors provide a framework for understanding current trends, and suggest approaches that highlight appropriate ways forward in the context of both opportunities and dangers. In doing so, they discuss specific cases and explore detailed policy possibilities, including the prospect of stimulating change through multinational engagement and debate.
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Chapter 5: Notes on labour market flexibility: questions for the new economy*

Stanley Siebert


Stanley Siebert ItalyÕs three main trade unions declared last night that nearly all their 11m members had supported a one-day general strike in protest at labour market reforms proposed by Silvio BerlusconiÕs centre-right government . . . The government plans to reform Article 18 of the WorkersÕ Statute which gives judges the right to reinstate a sacked worker if he or she is found to have been dismissed without just cause. (James Blitz and Fred Kapner, Financial Times, 17 April, 2002) 1. INTRODUCTION This chapter is concerned with labour market institutions and earnings/income inequality. It is clear that institutions such as strong trade unions with extended collective agreements coupled with minimum wage legislation have reduced earnings inequality amongst OECD states (Lucifora, 2000). Strong unions also passionately support employment protection laws underpinning job security Ð as the quotation above shows. The conclusion here is seemingly optimistic (Lucifora, p. 10): ÔGovernments can have a role in supporting those institutions which have proved effective in dealing with the problem of growing earnings inequalities and low wage employmentÕ. Yet many rich countries with low earnings inequality at the same time present a picture of high and concentrated unemployment, plus low and declining labourforce participation. Italy Ð where earnings inequalities on some measures have even declined Ð is a case in point (DellÕ Aringa and Lucifora, 2001, Figure 10). Unemployment and low labourforce participation may be attributable to the very unions and minimum wage laws Ð together with high social security taxes and employment protection laws Ð that we praise for...

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