Strong trade unions and employment-protection laws can go hand-in-hand with low levels of unemployment, the West’s leading think tank said last week in a keynote study that rejected the notion that there was a single blueprint for a successful labour market.
Casting doubt on the notion that liberalisation is the only way to bring down high levels of joblessness in developed countries, the Organisation for Economic Cooperation and Development (OECD) said: ”There is more than one model of success to hand from which to take inspiration to fit national circumstances and history.”
The OECD has 30 rich-country members, and its Jobs Study — updating a report from 12 years ago — found some countries with extensive collec-tive bargaining and job-protection legislation also had low unemployment. But the Paris-based think tank said successful performers shared macroeconomic stability, active poli-cies to help claimants find work and strong competition policies.
The study showed that Britain had the highest employment rate of the G7, which includes the United States, Germany, Japan, Italy, France and Canada.
Welcoming the figures, Jim Murphy, the British Minister for Employment, said: ”This government’s policy of reforming the labour market so that it is able to provide the skills and opportunity for people who have traditionally been left behind has enabled us to continue performing.”
The report said it was possible for countries to continue to provide ”relatively generous” unemployment benefits, provided they were in tandem with active labour-market policies designed to encourage claimants to seek and take work.
The report said that while the jobless total across the OECD’s 30 member countries was expected to fall this year and next, there would still be 34million unemployed in 2007.
It found that countries with high union membership tended to have lower wage inequality. — Â