Equality, Efficiency and Economic Progress: The Case for Universally Applied Equitable Standards for Wages and Conditions of Work

From the end of World War Two until the mid-1970s the wide consensus in advanced industrial countries was that an effective and equitable floor of employment rights was both socially and economically beneficial. Decent standards of pay and working conditions were regarded as having a central part to play in reducing exploitation and poverty and encouraging the more effective use of labour. Since the mid-1970s the climate of opinion, especially among economists, has progressively swung towards the view that such regulations impede the working of the labour markets preventing necessary adjustments to changed economic environments and causing unemployment. A lead in this revision has been taken by free market, neoclassical economists who insist that left to itself the market will establish equitable pay and conditions of work in the sense that they will be proportional to the quality and quantity of the labour input of individuals. That this results in a wide dispersion of labour market rewards, some of which may be insufficient to sustain a reasonable standard of life, is a demonstration, they would argue, of how widely dispersed are individual capabilities (Hirsch and Addison, 1986).