Coordination of Economic and Employment Policies

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Coordination of Economic and Employment Policies
Mexico City, Apri 2006

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• Agenda for placing employment at the centre of
  government policies
• Marta Novick
• Assistant Secretary of Technical Programming and
  Labour Studies
• Ministry of Labour, Employment and Social
  Security of Argentina

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Role of labour market

• The labour market is the gear box that links the
  economy with the well-being of individuals.
• This is a multi-directional relationship which is
  influenced by
• ownership of the means of production,
• pattern of economic growth
• role of the state as a collector of taxes and
  spender.

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P O V E R T Y A N D I N E Q U A L I T Y
Macroeconomic Environment Pattern of growth
Structural characteristics Macroeconomic
restrictions Effects of general balance between
investment and utilized capacity
StateInstitutionalFrameworkTaxesExpenses
Legislation
Labour Market
Market of means of production

Characteristics of individuals Physical and
human capital Demographic composition
Strategies Access to markets
Homes
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Why coordinate?

• In the model of a closed economy
• Linkage existed at the social, sector and spatial
  level
• Employment and labour conditions were directly
  linked to the economic cycle
• The state set the rules and also acted as an
  anti-cyclical employer
• It ended with contradictions and limited
  sustained growth

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Why coordinate?

• In the model of globalization, openness and
  deregulation
• The market should adjust itself according to
  prices or quantities without intervention
• The state should reduce the rigidity of the
  labour market so that it operates well and adapts
  to the dynamics of the economy
• Unemployment was interpreted as a problem of
  supply and demand being out of phase with each
  other
• In general, inequality and poverty increased in
  the region
• Today, serious limitations exist for returning to
  the past

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Strategy of growth

• Different macroeconomic conditions
• -Value of the exchange rate
• Production incentives
• Fiscal Balance and/or Surplus (Cushion that
  permitted spending policies which stimulated the
  domestic economy
• Active, integrated policies (in science and
  technology, in industrial policies, in salaries
  through promotion of collective bargaining, in
  social policy)
• - Recovery of taxation instruments (withholding)

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Challenges of policies

• Strategic decisions should be taken regarding
• Definition of profile of productive
  specialization
• Consolidation of pattern of growth
• Exchange rate
• Financial system
• Tax policies
• Functional redistribution of income

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Summing up

• Richard Freeman (2003)
• The problems of the labour market are not
  resolved in the labour market
• This implies the need for a coordinated and
  rational focus for the definition of policies,
  plans and programmes

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The Tinbergen Paradigm of rational economic policy

• Policy goals expressed qualitatively
• Quantitative expression of the objectives
• Objective function defined for the goals and
  level of effectiveness
• Set of available instruments for policy
  management
• Theoretical model of the interrelationships and
  contradictions between instruments and goals

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Diagram of the Tinbergen Paradigm
Función Objetivo de la política
Meta n
Meta 1
Meta 3
Meta 2
Modelo teórico y conceptual
I1
I2
I3
I4
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Inter-institutional Coordination

• Some necessities for coordination

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Needs for new instruments for

• The design and ex-ante evaluation
• Generation of information
• Definition of systems of indicators
• Design of instrument systems
• Analytical models of simulations
• The on-going monitoring
• Models of management evaluation
• Schemes of rectification design
• The ex-post evaluation
• Models of impact evaluation

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New flexible and dynamic institutional spheres in
order to

• Define the qualitative-quantitative goals
• Define the models of analysis
• Design the systems of indicators
• Analyze the results
• Redefine actions and corrective measures

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• The new administration of the Ministry of Labour,
  Employment and Social Security, in line with the
  overall government vision, carries out the
  following measure to place quality employment at
  the centre of the decisions

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Coordination of macroeconomic, productive and
employment policies

• GANEMPLE
• Labour, Economy, Education and Foreign Ministry
• Inter-ministry team of monitoring of income
  distribution
• Economy, Labour, Central Bank, Foreign Ministry
• Productive Cabinet
• Ministers of Economy, Planning, Education and
  Labour
• Competitiveness Forums
• Secretariat of Labour, Secretariat of Industry,
  Secretary of Trade, Secretariat of Small and
  Medium-sized Enterprises

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Coordination of macroeconomic, productive and
employment policies

• Local Productive Forums
• National Government with the Provincial and
  Municipal Governments
• Dialogue with the local representatives of
  production
• Integration of the team of assignment of credit
  promotion
• Secretary of Small and Medíum-Sized Enterprises
  with the Ministry of Labour and Bank of the Nation

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Bilateral Actions of Labour Ministry with

• Ministry of Education
• Educational level of the beneficiaries of
  Employment Plans
• Coordination in Professional Training
• Foreign Ministry
• Technical assistance in trade agreements
• Support in International Forums
• Secretary of Science and Technology
• Actions of productive innovation, development and
  employment
• Contest for innovators
• Strategy for inclusion of scientific-technical
  dispersion
• Social Development
• Joint actions of programmes of social inclusion
• Development of single window systems for social
  programmes
• Federal Agency of Public Income (AFIP)
• Integration of labour and tax inspection
• Simplification of registry

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But basically

• The conviction that there is no better social or
  economic policy than full employment
• Nor that there is no better employment than
  decent employment
• ... the political vocation to place employment at
  the centre of government decisions.