Neo-Liberal Labor Market Reforms and Work Stoppages: Comparisons of India, Indonesia, the United States and Australia

By Perry, L. J. | South Asian Journal of Management, July-September 2006 | Go to article overview

Neo-Liberal Labor Market Reforms and Work Stoppages: Comparisons of India, Indonesia, the United States and Australia


Perry, L. J., South Asian Journal of Management


This paper compares the apparent rise of neo-liberal labor market reforms in India, Indonesia, the United States and Australia during recent decades. It is noted that all the economies under review have gone through major labor market reforms, though the exact nature of the reforms has varied quite considerably for each of the countries. Work stoppages in each of the economies have also generally declined in more recent years for all of the economies, though the extent and timing of the decline has varied quite considerably, especially for Indonesia. The paper argues that the evidence supports a view that neo-liberal labor market reforms have contributed to a decline in labor dispute numbers, though other factors have also contributed to the decline in stoppages, including declining inflation, changing labor market conditions and declining union density.

INTRODUCTION

There is voluminous literature on the economic and social impact of neo-liberal economic policy reforms.1 Many writers are convinced neo-liberal economic policies are responsible for many of the world's enduring woes. Others argue that the same policies are a source of economic salvation. Most writers see pluses and minuses, and depending upon the weights attached to the pluses and minuses, come down for or against or undecided. Surprisingly little attention has been given to the impact of different neo-liberal reforms on the pattern of work stoppages in different economies. To be sure, individual country studies have been made in which the issue of labor market reform has been broached. However, there has not been much attention paid to making international comparisons, and when international comparisons are made, there has been a tendency to focus on the experience of developed economies.

This paper seeks to compare the experience of four countries quite prominent, in one way or another, around the rim of the Indian Ocean: India, Indonesia, the United States and Australia. India and Indonesia are the two most heavily populated countries along the rim. Australia is lightly populated, but it is the wealthiest on a per capita basis and also has the second largest economy2 that is geographically located along the rim. The United States is, of course, not geographically located on the Indian Ocean rim, but it is the largest and most influential economy in the world and also one of the most important trading partners to all of the countries in the region.

The four countries provide an interesting mix of diverse features. India and Indonesia are both relatively underdeveloped, heavily populated and have at various times been troubled by sluggish economic growth. On the other. hand, the United States and Australia are both relatively well-developed with low population densities (particularly Australia), and both have also been,, troubled at times by sluggish economic growth. All countries currently enjoy harmonious political and economic relations with one another, and all have been affected, in one way or another, by the emergence of neo-liberal thinking providing an intellectual framework for managing the economy. It is of interest to compare the experience of these rather diverse countries to identify notable differences and similarities in their experiences of labor market reform and changing patterns of work stoppages.

To address the issue of the relation between work stoppages and neo-liberal labor market reforms, we proceed as follows. The next section of this paper reviews the notion of neo-liberalism. This is followed by a comparative analysis of the pattern of work stoppages, with some attention given to measurement differences and definitional changes. Stoppages can be looked at in terms of their frequency, worker involvement and duration-all of which affect the aggregate number of work days lost due to stoppages. The penultimate section reviews the links between neo-liberal labor market reforms and work stoppages, as well as the influence of other factors, such as labor market conditions, inflation and trade union density, on dispute rates. …

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