I'm confused because economically it doesn't add up.
Shortages of labor should lead to higher wages. Supply and demand.
So it would make sense to relax laws prohibiting working more than 40hrs in order to unleash additional economic output i.e. increase the amount of money made.
The article claims that for some reason that defies logic, it will just make employers demand more work for same amount of money.
I see two possibilities for that.
A country-wide collusion between employers to fix wages. That doesn't seem possible. If employer A has profit to spare and could make even more profit if he had more employees, what logic would lead him to NOT raise wages and steal workers from employer B? The wages should raise because workers would migrate to the highest paying jobs.
Or there just isn't profit to pay more in which case there's noting the government can do either way.
Greek workers have the option to work in any of the 27 EU countries, and a few non-EU countries like Switzerland and Norway.
Given that there is a shortage of skilled workers prompting this policy, it makes little sense to allow employers to demand more unpaid overtime of workers. That just means more Greeks working outside of Greece.
Greek workers already work more hours than any other EU country while making basically no money, so making Greeks work even more hours should probably not be a government priority.
Removing needless regulation and speeding up government permits would be a better idea.
> A country-wide collusion between employers to fix wages. That doesn't seem possible.
Why? I would rather guess that this is very common. Obviously, they cannot fix wages directly, but they might outsource the job of estimating wages to some agencies providing the market wages for relevant positions. If every employer asks the same agencies, they all arrive at the same wages, with minor variations.
You must have never worked a fast food job. Companies will do anything but raise wages, even if it allows them to have way more revenue and higher reliability.
In Belgium, the "loonnormwet" or "wage norm law" controls how much workers are paid to ensure the country stays competitive. Jobs are also classified into pay scales based on their type and the qualifications needed.
This means that even if technical jobs are in high demand, if you have a lower educational degree — which is often the case — you might not earn much more because of it. As a result, these jobs may not attract many job seekers.
This situation creates a cycle where lower wages make these jobs less desirable, which can lead to difficulties in finding enough qualified workers. Now, business lobby groups like VOKA are considering bringing in immigrants from Mexico and India to fill these lower-paying positions.
The country is basically a huge cartel. The business owners have colluded to fix prices, wages, supply. In every industry or business sector. It's just effed up. Whoever has normal goals, like having a family that they can support and give them a quality of live and not just make meets end, is trying to find job in another country.
or maybe economics is the study of spherical cows trading fungible goods and services in an efficient market with perfect information, and the real world is none of those things.
> If employer A has profit to spare and could make even more profit if he had more employees, what logic would lead him to NOT raise wages and steal workers from employer B?
Shortages of labor should lead to higher wages. Supply and demand.
So it would make sense to relax laws prohibiting working more than 40hrs in order to unleash additional economic output i.e. increase the amount of money made.
The article claims that for some reason that defies logic, it will just make employers demand more work for same amount of money.
I see two possibilities for that.
A country-wide collusion between employers to fix wages. That doesn't seem possible. If employer A has profit to spare and could make even more profit if he had more employees, what logic would lead him to NOT raise wages and steal workers from employer B? The wages should raise because workers would migrate to the highest paying jobs.
Or there just isn't profit to pay more in which case there's noting the government can do either way.