Globalization, the Restructuring of Labour Markets and Policy Convergence

Abstract

This article investigates the relationship between globalization and labour market reform by examining the Organization for Economic Co-operation and Development's (OECD's) ‘Jobs Strategy’. It has been argued that globalization requires, and the competitive forces unleashed by that process require, the national adoption of more flexible, market-based, or ‘neoliberal’ labour market policies or states will face declining labour market performance. Thus, the globalization thesis posits convergence in labour market policies around an emerging neoliberal norm. Through an examination of the Jobs Strategy and the empirical data collected by the OECD, this article reaches several interrelated conclusions. The evidence suggests little sign of sustained convergence in labour market policies. According to the OECD's analysis, many states have been reticent to adopt neoliberal labour market strategies. Secondly, there is good reason for non-convergence: states that have adopted a liberal strategy, as a group, have not performed particularly well. Despite globalization, there is a range of labour market policy choices available to states. Several welfare state labour market strategies continue to exist.