A New Perspective
11. 11.1 Labour markets INTRODUCTION: THE SCOPE OF MANPOWER POLICY Manpower policy embraces all aspects of government policy towards labour as a factor of production and in relation to the operation of the market for labour. While the list of potential policy issues is extensive, they can be classiﬁed around the broad demand, supply and relative wage variables in the market. Examples include state involvement in determining relative pay, particularly between the public and private sectors, as well as information provision and policies towards the unemployed, training and re-training, mobility, and regional development. Governments might also make provision for special groups, such as the disabled, school-leavers, the long-term unemployed, the elderly, women and immigrants. Such policies often reﬂect a concern with both economic and social objectives. Indeed, labour markets are often regarded as ‘diﬀerent’ since they involve transactions in people and their services. People are both consumers and workers, and the income obtained from work will clearly aﬀect their consumption levels. Not surprisingly, governments aiming to reduce poverty and economic deprivation have frequently intervened to raise the wages of the low-paid through, for example, legislation on minimum wages and equal pay. Such policies can have perverse eﬀects and they raise basic questions about the function of labour markets. This chapter will outline the economic arguments which might justify government intervention in the labour market and the likely eﬀects of intervention. Consideration will be given to the characteristics of labour markets, the behaviour of individuals...
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