Labour Market Deregulation - Essay Example

Labour Market Deregulation Name: Institution: Introduction into the Meaning of Labour Market Deregulation Labour market deregulation is an exact opposite of government regulation or control. As the government imposes control on certain industrial market activities, deregulation seeks to eliminate these imposed legislations. It is the process of removing state regulations by informed groups such as market societies, government organs, trade unions and many other interested parties to the market economy. Further to this, it could be pointed out that it is a process under which government restrictions on industrial undertakings are removed. In a broader sense, it entails the removal of government control over certain activities in the industrial market. Labour market deregulations are intended to change government policies that at times the interested parties may deem as not authentic or not supporting their interest. Extents of Implementation on Labour Market Deregulation Labour Market Deregulation has undergone a series of transitions from time immemorial. Due to continued changes in market trends and demands, inter-corporate and intra-corporate and in addition international relations, the industrial market has adopted several changes to Governmental Acts and Policies. Amongst the changes that have been adopted, lie changes in several industrial sectors. The industrial departments that have undergone palpable changes include the Transport Industry, Energy Regulatory Commissions and Ministries, Communication Commissions and Ministries that handle finances and their committees. Other reforms that have been adopted in terms of deregulation are applicable to other general state organs and trade unions. The main reason why deregulation is an essential process in any government is to curb, majorly, the global crises that may arise if proper interstate and intrastate managements are not aligned. It requires a vast understanding of economic concepts. For instance, in the Energy regulatory commissions and ministries, certain notable deregulation processes that are already underway include, allowing residential and small volume gas users to compare and purchase gas from natural gas suppliers, aside with traditional utility companies. Establishment of independent Energy Price Regulatory Commissions by different states is clear evidence that the government wants to break loose from the archaic methods of setting prices and identifying individuals that are licensed to do business in the energy sector. Further it is a big development to the Energy Sector as most private companies in the energy production sector, generate electricity and channel it to the national grid which used not be the case before. Despite this despicable performance, private companies in power generation cannot produce and sell their own electricity to help set an economically efficient price due to competition. The government regulations are still restricting direct sale to final consumers. Secondly, in the Transport Industry, however, deregulation is specifically much evident on the rail and road transport. The air transport and sea transport sector have limited if any deregulations that have been effected. In this regard, deregulation entails lessening of barriers to entry into the transport market in order to promote competitive pricing amongst service providers; the freight forwarders have got more freedom (intrastate relations) as no state is allowed (as per state agreements), in a region, to enact or enforce law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier. In sea transport, the members are now allowed to sit in committees and come up with a common price that they charge for transportation services. Any member who participates in the sitting becomes party to the agreed price. This is unlike the old government policy where a state sets a price that becomes common to all. This particular sector has not experienced major reforms as very few are involved in large scale sea transports. There is still much more that needs to be done under the air transport. Deregulations related to air transport has faced several cases of criticism but more is yet to be unravelled. In the communications sector, a variety of government regulations have been altered internationally. In this category, reference is made to media freedoms majorly. Governments in most countries still have control over most media houses. Freedom is limited to producing only what the government in each country deems non detrimental to its image. This may be due to political reasons and matters of national security. Despite these setbacks, a great change has been experienced in the media industry. More competitors are seen slowly venturing into the communication industry. Communication offerings have increased in terms of size and variety. Wireless, traditional landline telephone and cable companies are invading into each other’s traditional market. A division of labour between studios and the networks is a necessary reform that has also been adopted in the industry which used not to be the case. Argumentatively, however, the governing body of most sovereign states are still holding a great chunk of the freedoms that the media players posses. A deregulation process is ongoing in order to deregulate concentration of media ownership and relatively high prices in the cable companies. Deregulation in this sector is centred at lowering prices and allowing entry into this market to facilitate competition. Competition helps set an economically realistic price. Finally to the Finance Sector, key players include different categories of banks, various insurance companies and other financial institutions taking part in monetary control activities and market economical balances. Deregulation in the finance sector entails two major Acts that were passed in most states. The Securitization of loan obligations of various sorts and the Credit default swaps are some of the main regulations that are now of use. Loans can now be given from financial institutions with a variety of property as security. Initially, loans were available to salaried clients in banks only. With the new regulation, land parcels, vehicle log books and other property deemed fit by the financial institution can be used as collateral to accessing loans. Expanding on this sector, it is possible to see several banks upcoming meaning the market is open and free. Most barriers to fare and open competition between traditional banks, investments banks, insuring companies and other financial institutions are now removed. The market is open to an extent that it is not possible or easy to tell the clear difference between banks when looking at their roles in the financial markets. Despite this general outlook, certain reforms made in the financial sector such as the above mentioned are criticised to have caused the global financial crisis that hit the world in between the year two thousand and eight (2008) and the year two thousand and nine (2009). In a more general set up, deregulation has brought changes to several sectors in the government and private sectors. Certain businesses such as Sugar Production in many companies and road construction and maintenance were traditionally believed that can only be handled by states. This is a stance that is long forgotten and currently, several upcoming firms are slowly overtaking and even giving governments ‘neck to neck’ competition, evidence that deregulation is slowly but firmly eating into the world market trends. And also, other parameters that show the extent of how deregulation has been implemented include; establishment of Federal Reserve, institutions of shorter working hours, institutions of higher wages and institutions for better living conditions. In addition, institutions that are established with the aim bargaining for better rights and privileges to trade unions, protection of rights of strikers, banning of unfair labour practises, delivery of more social services to the working classes, giving social safety nets to many unemployed and facilitation of welfare states are all evidences of deregulation processes in action. Deregulation has a broad view and till this time, it can be generally assumed that it is more of a proposal that only interested parties can push for in order to serve their interests. Deregulation process has been criticised a lot in the past. This could perhaps be purported to be a reason as to why much of the regulations proposed by individuals are not passed. Some fail due to political reasons. Anti-deregulation claims are that regulations are supposed to be in place to create a level playing field and ensure competition. Further it is reiterated that, maintaining the quality standards for services, protection of consumers from fraud, ensuring sufficient provision of information, prevention of environmental degradation, and guarantee to wide access of services plus preventing financial instability and protecting consumer savings from excessive risk-taking by financial institutions are the key pillars under which regulations were built. It is said that ensuring that new energy providers have competitive access to the national grid, specifying qualifications requirements for service providers, letting the consumers know about the features of competing services, keeping the environment from too much tourist activity and ensuring that areas where profit margins are lower are also provided with electricity and health services are the basis under which regulations are required. Doing away with regulations would mean too much freedom that may end up in a crisis. Deregulation movement of the late 20th century had substantial economic effects and engendered substantial controversy. The movement was based on intellectual perspectives which prescribed substantial scope for market forces, and opposing perspectives is in play in national and international discourse. The movement towards greater reliance on market forces is closely related to the growth of economic and institutional globalization. Critics of economic liberalisation and deregulation cite the benefits of regulation, and believe that certain regulations do not distort markets and allows companies to continue to be competitive, or according to some, grow in competition. Much as the state plays an important role through issues such as property rights, appropriate regulation is argued by some to be “crucial to realise the benefits of service liberalisation” Interested Parties in Deregulation and Conclusion Deregulation in general is a process that is mainly meant to guard the interest of the general public. Basing on the sentiments here in raised, most beneficiaries of the deregulation process are workers in that they get better working conditions, final consumers of goods as competition breaks monopoly and in turn may result in low charges for goods and services, business persons and upcoming businesses as room or market niches are created without very many governmental restrictions and requirements to start, producers as customers have a right of choice on where to obtain their services and goods, Governments as several regulations controlling the export and import processes are lessened and the whole human population as some of the fundamental rights are protected by institutions created due to deregulation. In summary, it is evident that as much as regulations have so many advantages, making easy certain procedures that involve the gain of both the government and the general public could be beneficial. Allowing businesses, though within limits, explore their freedom to the fullest can result in both positive and negative outcomes. Market freedom should be maintained within healthy limits to protect the industrial market from invasion by fraudulent businesses. References "Deregulation Definition". The Free Merriam-Webster Dictionary. 2012. Retrieved October 1st, 2012. "Deregulation Definition". Financial Times Lexicon. 2012. Retrieved September 24, 2012. Inhaber, H 2002, Deregulation and Its Discontents Ideas in Action Grace Creek Media and The George W. Bush Institute Retrieved August 1st, 2012. Seely, R, & Barrett, T 2006, The Best Transportation System in the World. From the selected National Archive White House Files. University of Ohio State Press. Retrieved 2012 10-1. Derthick, M, Quirk, P J 1985, The Politics of Deregulation, Brookings Institution, ISBN 978 0-8157-1817-8 Moore, T, 1988, Rail and Truck Reform: The Record So Far, Regulation Zhuravskaya, E, Yakovlev, E 2008, Deregulation of Business, Social Science Research Network, retrieved 2012-10-1 Read More