Differences between free-market and interventionist approaches to employee relations in the UK

The recognition that the free trade system needs to be balanced by a legislative framework came from Tony Blair in a recent World Bank meeting in Prague. The prime minister emphasized the raising of labour and animal welfare standards. He also expressed concerns for employer’s attitude towards worker and environmental health. The fact that around tens of thousands of people from around the world participated in protests against the World Bank and the International Monetary Fund during this meeting suggests that the free market approaches to trade had not been totally fair to workers and their communities (Webster, Allan. & Gilroy, Michael. P.329).

The report released on the occasion, titled “Rights of Exchange: Social, Health, Environmental and Trade Objectives on the Global Stage”, is one among the many steps taken by politicians in trying to strike a balance between free and interventionist approaches to trade. Economists believe that there are genuine reasons for the growing antipathy towards globalisation and a recession at this juncture could turn free-market pockets of the economy into protectionist ones. (Webster, Allan. & Gilroy, Michael. P.332).

“Meanwhile, whether the Blair government’s recent policies will appease the ‘disadvantaged’ is questionable. While Tony Blair warns that rich countries must help developing nations get rid of ‘sweatshop’ conditions, he welcomes companies like Wal-Mart to the UK, whose contractor in Bangladesh pays teenage seamstresses less than the minimum wage; or McDonald’s, whose toy making contractor in Hong Kong was found to employ 400 children as young as 14, or Nike which pays 58 cents per day to its labourers in Indonesia, or Ralph Lauren which pays its Chinese workers 23 cents per hour. There is, and always has been, a huge gap between Mr. Blair’s rhetoric and reality”. (The Ecologist, p.12)

Changing the ground rules that govern the behaviour of the global market seems politically and financially unpleasant to politicians pre-occupied in short-term electoral results and dependent on corporate funds. But until they do, globalization will continue to be controversial.

A 1998 survey involving 500 employees from various small business organizations reveals some telling statistics. It shows that racial minorities like Asians and Africans are less likely to find work in smaller firms. So is the case for women, irrespective of their racial background. Eligible workers between the age group of 25-45 are also less likely to find acceptance, especially in very small firms. There are a higher proportion of the uneducated personnel, many among those having not passed high school. Given the small business sector is only minimally legislated, it could be concluded that the free market setup in which such organizations function is not leading to a healthier society. (Phillips, Estelle M., p.78)

Further evidence for the failure of the free markets comes from the fact that the people employed by these firms are from lower socio-economic background, and dependent on external sources of financial assistance. Also, there are fewer managerial and administrative positions and opportunities for growth in such environments. The commonly available jobs are in construction, agriculture and other services, which are basically physical labour and that much more strenuous (Fitzgerald, Niall. P.23).Considering that some of these small business employees are availing of welfare assistance, it makes sense to increase government intervention in areas of minimum wages, equal opportunities and work conditions. (Fitzgerald, Niall., p.28)

An important area of corporate life that needs address is the continuing discriminatory practices in the workplace in spite of anti-discrimination legislation and significant changes in the nature of gender relations in the last century. The results published by the Equal Opportunities Commission gives a factual description of the status and trends in this area of corporate affairs. It confirms that while managers projected themselves as professionals and advocated the concept of equal opportunities, there were definite cases of discrimination based on gender. Some measures are required toward ensuring that managers match their practices to policies. This further shows that free market capitalistic approach need not always be fair and just. (Phillips, Estelle M., p.79)

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