Dead Men Left

Thursday, May 18, 2006

Vauxhall (briefly)

That dynamic UK economy, again:

Union leaders claimed last night that manufacturing was being "massacred" after Vauxhall announced plans to axe 900 jobs and the rate of unemployment rose to its highest level for four years.

Unlike the fools on the continet, you see, we've got a wonderful flexible labour market that creates jobs. Andrew Glyn offers a good, short assessment (PDF):

The case for labour market deregulation in Europe is that it would have a major effect on European joblessness... the cross country evidence does not bear this out. Moreover the benefits of labour market regulation and welfare state measures in terms of a wage floor , income security, job security and conditions at work are frequently ignored... The call for comprehensive labour market deregulation in Europe lacks empirical justification in terms of large and predictable effects on employment and thus a more egalitarian distribution of welfare.

(Interesting to note, by-the-by, that New Labour is becoming increasingly open about offering state aid.)