The main aim of the implementation of labor market reform in US may vary from the benefits enjoyed on a long term basis as well as on a short term basis pertaining to equity as well as efficiency. There are many policies pertaining to the labor market in the United States.
Policies leading to reforms in areas related to taxation, trade and structural make up may in turn affect the workforce in the country. Unless measures related to these areas are handled with precision, it will not ensure the successful implementation of the labor market reform in US.
The labor market and the allocation of the labor force to the different segments of the economy may get upset by the following:
Segmentation of the labor market
There are several goals of labor market reform in US. One such aim is the evaluation of the workforce prevailing in the labor market. Efficiency of the laborforce and hence their evaluation can be done by the following economic tools.
In static efficiency, mainly involving the unskilled labor, the maximum exploitation of the skills ensure the effectiveness of the labor market reform in US.
In case of dynamic efficiency:
The skill of the workforce can be enhanced by imparting training to the skilled as well as unskilled workforce. Efficiency of the workers can be increased by providing training to them and re assigning them to the areas of their efficiency. By doing so, the productivity increases.
Another goal of the efficient implementation of labor market reform in US is that the wages ought to be distributed in a fair manner and a worker ought to enjoy equal rights pertaining to the same.
In the United States of America, benefits pertaining to the “duration of unemployment” have been altered.
In other words, it can be said that in United States of America, labor market reform in US prioritizes efficiency as compared to equity.
The labor market in US essentially consists of the following features:
Determination of wage is comparatively less centralized.
All new developments occurring in the labor market are influenced by market forces.
Not much emphasis is laid on income policies.
Benefits pertaining to social welfare are not liberal and are applicable only for a limited period of time.
Unionization of the workforce is not pronounced.
Government interference as well as union intervention is limited in the country.
However, there are other factors, which determine the effectiveness of labor market reform in US in addition to the ones mentioned above.
Last Updated on : 26th June 2013