Question

Regarding setting standards, please provide one labor standard example that exists today, in any country. Do you think it should exist? Why or why not? Use economic terms we discussed in class as they apply.

Answer 1

Working-time arrangements comprise different elements: normal and maximum number of hours per working day or week; overtime provisions; rest periods; the distribution of working-time during the day, week or year and the associated flexible time arrangements. These elements are regarded as a fundamental dimension of international labour standards, as evidenced by the large number of ILO conventions and EC regulations devoted lo working -time is sues.

There are important cross-country differences in approach to the regulation of working time. Some countries have very few regulations: in the United Kingdom, the only explicit provisions concern special categories of workers, while for the majority, working-time limits are given implicitly by health and safety restrictions; in Denmark, legislation covers rest periods and annual leave, whereas working hours are determined by collective agreements; in the United States, working-time regulations are light (they are mainly confined to overtime work), and earlier provisions on daily working time have been abolished. At the other extreme are countries with a tradition of more extensive reguIation, such as Belgium, Canada, France, Greece, Porlugal and Spain. In a third group, collective agreements predominate, within the framework of a very general law (often dating from the 1930s). year is very restrictive in countries such as Spain (80 hours), France (130 hours) and Portugal (160 hours), less restrictive in others (the Nordic countries, except In most countries, eight hours is the norm for daily work. However, in Denmark, Sweden, Switzerland, the United Kingdom and the United States, the law fixes no particular limits. Weekly working time is normally less than 40 hours in most OECD countries, except in Greece, Portugal, Spain and Switzerland, where it often exceeds 40 hours (Table 4.2). By contrast, rules and regulations Denmark) and lax in others (especially Belgium). Regulations governing holiday entitlements are more uniform: in most countries, 25 to 30 days of annual vacation are granted either through legislation or as a result of collective bargaining. In North America, holiday entitlements are typically less generous than in the other RTAs. governing overtime work differ.

Social considerations have often led governments to intervene in the wage determination process, using two main instruments: the establishment of a statutory minimum wage, and the extension of minimum wage clauses concluded in collective agreements to enterprises that have not been a party to the original agreements (non signatory parties).

It is interesting to note that in recent years there has been a common trend in all countries with a legally binding minimum wage system: they have tend to reduce the minimum wage relative to average wages, while making the system less binding. For example, updating mechanisms have been substantially reformed, with a view to suppressing indexation upon either prices or average wages. In Belgium, the price indexation mechanism was modified in 1983. In Greece, the ATA automatic indexation system (which over the 1980s had caused a substantial reduction in wage differentials) was abolished in 1991. Likewise, in Italy the scalu mobile was suppressed in 1992 and in the Netherlands indexation was abolished in 1991. Another illustration of this trend is the creation of a sub-minimum differential for young people, which now exists in Belgium, France, the Netherlands, Portugal, Spain and the United States.