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CIAO DATE: 03/02
Volume 3, Number 1, February 1998
Preface
One sign of a healthy economy is its ability to create jobs — jobs that are good paying and that provide adequate benefits to improve the quality of life of the individual and the population.
Yet as the 20th century comes to a close, labor markets are increasingly characterized by rapid technological progress, growing global competition, declining birth rates, and aging workforces, often with resulting high unemployment or growing wage inequality. Among the challenges all nations face is how to provide a smooth transition from school to work, from one job to the next, and from unemployment to work.
Macroeconomic growth alone is no longer deemed adequate to meet these challenges. Overregulated labor markets also fail the task as reduced flexibility favors capital investment over human development. Economists increasingly argue for a new balance between workplace flexibility and security and between providing employment services and financial support for the unemployed.
On February 22, labor and finance ministers from the seven major industrial countries and Russia will be meeting in London to discuss solutions to the general problems of unemployment and low wages. This issue of Economic Perspectives takes an in-depth look at policies that create incentives to work, that provide workers with the necessary skills to meet changing technological demands, and that enhance job security without reducing firm flexibility.