Flexibility in the labor market "is not enough" for quality and inclusion in employment – The Economic Journal

Flexibility in the labor market "is not enough" for quality and inclusion in employment - The Economic Journal


Countries that promote quantity, quality and inclusion in employment – such as Denmark, Iceland, Norway and Sweden – perform better than those that focus predominantly on market flexibility, concludes the Organization for Economic Co-operation and Development ( OECD) in the report on a new Employment Strategy, released on Tuesday, December 4. The organization defends good jobs for everyone in a changing world of work and says the path is to promote an inclusive labor market, from corrective policies to prevention policies.

"While flexibility and adaptability are essential to stimulate the creation of high-quality jobs in an increasingly dynamic environment, the gains and costs need to be shared fairly between companies and workers," the OECD says in the report, Good jobs for everyone in a changing world of work. "

For this organization, policies must achieve a "right balance" between flexibility and stability in employment ", stating that the challenge is to ensure that resources can be redirected to more productive uses, while at the same time providing a level of stability in employment that promotes learning and innovation in the workplace.

Quality of employment and inclusion are priorities

The OECD notes that quality of employment and inclusion are central priorities of employment policies. It advocates that they should combine measures that encourage economic growth with policies and a "constructive" social dialogue that protects workers, fosters inclusion, and enables workers and businesses to "make the most of existing challenges and opportunities."

In this regard, the Secretary-General of the OECD, Angel Gurría, said at the launch of the report in Paris with the French Minister of Labor, Muriel Pénicaud, that "countries should intensify their efforts to adapt policies and institutions to the challenges of a world of work in rapid change ".

For the OECD, technological progress, globalization and demographic change are creating many new opportunities, but not for all. Therefore, he warns: "policymakers should focus on helping those at risk of being left behind," suggesting here that the path should be "well-targeted" education and training, as well as through the labor market and as "part of inclusive employment strategies to help everyone progress."

The paper recalls that while the OECD Employment Strategy emphasized flexibility in response to widespread unemployment in the 1990s, and in the 2000s advocated different policy mixes to promote full employment, the new OECD Employment Strategy points out now for a comprehensive policy framework to promote not only more but also better jobs and jobs. That is, he concludes, "a more inclusive and resilient labor market".

One goal, the OECD stresses, "is increasingly important in the light of the digital transformation and the rapid technological changes that go through our economies and societies." It should be recalled that the most recent OECD analysis suggests that nearly half of all jobs are at high risk of automation or are likely to have significant changes.

Changing the emphasis of policies from "remedies" to preventive policies

The OECD's new Employment Strategy argues that it is necessary to shift the emphasis from "remedy" policies to preventive policies, which would increase efficiency and equity at the same time. It argues here that, instead of jobs, "wage-setting rules and the system of taxes and benefits can be combined as a way of paying workers and protecting workers."

The OECD also adds that the social partners also have a key role to play in promoting inclusion, protecting workers and making collective bargaining systems effective.

The OECD Employment Strategy also emphasizes the increase in various forms of non-standard work, including temporary employment and self-employment. The challenge for governments is therefore to accompany innovation in the creation of such jobs, "avoiding abuse and creating a level playing field between companies"

The OECD emphasizes here that as non-standard forms of work tend to increase, governments need to ensure that everyone has access to social protection and is covered by the main labor market regulations, regardless of the type of contract or employment.



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