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the largest employer in HK and, when the private sector is slack, it recruits substantial numbers of new employees (9,000 in 1975):
So, for some categories of labour, government pay increases can easily be transmitted as labour market pressure on competing
industries. But here, too, there are limits to the amount of
labour mobility that can occur between the private and public sectors. The most that can be said is that government pay policy
sets a broad norm around which wages in other sectors may
eventually be allowed to settle, if the employers feel they can
afford it and don't want to appear niggardly to their workers.
M
A final note: by maintaining its own employment levels in
times of capitalist recession, government acts as a stabilizing
factor in the management of aggregate demand the lag in expenditure reviews ensures that public spending will be roaring ahead in a recession and slowing down in a boom (if the cycle is as
short as the last one).
(c) Legislation producing labour market rigidities: The Labour
Department has been extraordinarily active in the last few years, mainly because of government's sensitivity to trade union pressures in countries that consume HK's exports. One largely unexplored area (for possible investigation by the team in future)
is the effect of all this legislation on the operation of the labour market, particularly on the pattern of demand for different categories of the labour force (men, women, young people, apprentices, etc). The apprenticeship Ordinance, for example, will have radical consequences for the development of labour relations in the long run and for the mobility/employment pattern of labour. The restrictions on the employment of women and young persons have
How much had a variable impact, but undoubtedly a significant one. have industrial costs actually been pushed up by all this legisla-
tion? The shear mass of legislation is yet another reason for
abandoning the model of a free, competitive labour market; but in what direction has this legislation' pushed the labour market? Certainly the freedom of employers to hire and fire labour at will
has been much curtailed in recent years. The labour market as a
whole is less casual now than a decade ago, at least in part as
result of government legislation.
a