In light of COVID-19 governments around the globe are juggling between ensuring business liquidity and preserving workplaces. Most countries have taken the approach of increasing regulations and tailoring them to the topicalities.
Slovak large-scale employers want the highest possible wage compensation, looking up to the German or Austrian Kurzarbeit system, which covers up to 85% of wage costs. Journalists and some economists argue that we should borrow as much as we can.
Many labor market regulations were created with large mid-20th century manufacturing plants in mind – which is the spirit of the Polish Labor Code of 1974. However, along with the process of industrial automation as well as the growth of employment in services, the economic reality has changed.
The football business shows well how underestimating a well-performing and efficient player can bring other costs. The player may either simply leave for another team, or, if restricted with a contract – underperform to the level only required by the payment.
For the third year in a row, the Lithuanian Free Market Institute and its partner organizations present the Employment Flexibility Index 2020 that ranks a total of 41 countries that are members of the European Union (EU) or the Organization for Economic Cooperation and Development (OECD).
The fate of the “mobility package” is, however, far from sealed – the final decision on it will be taken not by the current, but the next composition of the European parliament, which may turn out to be more welcoming towards competition.
Under EU legislation, Member States are required to abolish any legal provisions contrary to the principle of equal treatment and have to introduce measures that would facilitate getting legal remedies in cases of alleged violations of equal treatment.
The ruling politicians are unfortunately going in the opposite direction. While a person working for a minimum wage in 2015 paid 29% in taxes and levies, with the planned minimum wage, they will pay more than 40% next year.
Labor market flexibility may be characterized by the market participants’ abilities to deviate from standard labor regulations and typical forms of employment. Such possibilities may not only provide positive outcomes to both employers and employees, but they may also benefit the whole economy.