Flexibility, quality and competitiveness

Bernard Casey, Ewart Keep and Ken Mayhew

National Institute Economic Review, 1999, vol. 168, 70-81

Abstract: Flexibility, quality and competitiveness are all hallelujah words in current debate about national economic performance. The achievement of more flexibility or higher quality or greater competitiveness, it is said, will help the UK become a more successful economy. At the same time increased labour market flexibility and deregulation has been seen by UK governments since the early 1980s as a means of creating jobs and tackling unemployment. In following this line the UK government has looked to the North American example, and has suggested on numerous occasions that overregulation and inflexibility in most European countries' labour markets has worsened unemployment. While the record of enhanced labour market flexibility in boosting employment is not the focus of this article (for details of the debate, see Solow, 1998; Walwei, 1998), this job creation aspect of flexibility is important because it has coloured discussions of flexible forms of employment in the UK and has often led to our conflating flexibility with deregulation. As will be argued below, the evidence from Europe in fact suggests that the use of some forms of flexible employment are not incompatible with relatively high degrees of labour market regulation.“I do not know what the word ‘flexibility’ is. Rarely in international discourse has a word gone so directly from obscurity to meaninglessness without any intervening period of coherence. Some people when they talk about labour market flexibility are talking about the freedom of employers to fire workers, the freedom of employers to reduce wages. I tell you something. That kind of freedom is not going to lead to higher standards of living in any of our countries.” Robert Reich, speaking at the International Labour Organisation, 10 June, 1994.

Date: 1999
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