Question

The United States has one the world’s freest labor markets. Research free labor markets around the world as well as your local labor market. What type of market exists in your local area? What are the pros and cons of a free labor market? Based on your research, reading and analysis, is there a need for government regulation?

Answer 1

“Labor market or job market and refers to the demand for employees and supply of employees. It is a major part of the economy and drives it along with capital, goods, and services.”

Free markets are the best and provide best results for the maximum number of people.

Discussing labor market in Europe as follows:

The European bureaucrats like to control the European labor markets. They like to dictate the hours of work, minimum wages and have labor laws. The trade unions also are active in dictating their terms and conditions. For example, Norway has 35 hours a week of the working rule and France offers 25 days paid vacation.

USA labor market	France	Italy
No vacation time	25 days paid vacation	Rigid labor market
No employee-friendly labor laws	95% of laws dictated by trade unions	All agreements below the table between employees and employers
Minimum wages are set below the market wage	Laws dictated by labor unions and in favor of employees	Minimum wages law in place
Millions of workers go to the USA both skilled and unskilled for job opportunities	40% unemployment, lack of innovation and small business are afraid to expand and take on more labor	Government red tape, rigid laws, many under the table agreements.

Advantages of the free labor market are as follows;

• Wages decided by demand and supply of labor
• Flexibility in employment terms
• Encourages immigrants and reduces the shortage of labor by allowing immigration of labor.
• Employers can get competitive price advantage by having flexible wage laws
• Innovation and new business start easily without any fear of labor laws

Disadvantages are as follows:

• Exploitation of labor where labor is in excess supply
• The employers will dictate the number of an hour at work, vacation etc
• The hiring and firing are at the whim of the employer.

According to me, the intervention of the government should be there to establish the basic norms as follows:

• Hours of work per week
• Working condition and safety norms
• The number of paid holidays which is critical for emergencies, health and family needs
• Hiring and firing policy which can be misused in the free labor market

To sum it up we need a balance of laws which are reviewed from time to time to avoid exploitation of labor and also allow business to flourish freely.