View from City Road: The OECD dodges the real issue
Wednesday 08 June 1994
The report outlines a conventional diagnosis of the unemployment problem in advanced nations. Technological progress and competition from low-wage countries have shifted demand from unskilled to skilled workers, but industrialised countries have been too inflexible to adapt.
The problem has manifested itself in two ways. In the US the labour market has become polarised between highly paid, highly skilled jobs and low-paid, low-skill jobs, resulting in horrendous inequality between rich and poor. In Europe the creation of low-wage jobs has been hindered by welfare state and labour market regulations that reflect an unwillingness to accept US inequality. So large numbers of people find themselves unemployed, often for long periods.
Britain has been moving from the European to the American model, suffering a dramatic widening in inequality and creating more low-paid, low-skill jobs.
In pursuit of flexibility, the OECD argues for the abolition of minimum wages; cutting taxes on low earners; making it easier for employers to hire and fire, and reducing disincentives to work when benefits are withdrawn from the low-paid.
At the same time the OECD argues that governments should help people to compete in this flexible world by providing better training and education, helping small businesses to set up, and supporting basic research and international hi-tech joint ventures.
This is all fine and dandy; it certainly sounds a note that most British business people would thoroughly agree with. But these policies are expensive and sluggish in their impact. In practice they would not be possible without higher taxes on relatively high earners - an issue the OECD has dodged.
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: Police will be on high alert on Friday whatever the result
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...