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There are a number of different forms of government intervention in the UK labour market, these include:
• the national minimum wage
• regulations to protect health and safety
• regulations with regard to working time and holiday entitlements
• provision of unemployment/sick benefits.
Supporters of these interventions argue that labour markets do not function in the same way as other markets. They argue that government intervention is needed to correct the failures and inefficiencies of the free market and protect the rights of employees.
However, classical economists argue that, just like other markets, the labour market functions perfectly and that government intervention slows down the efficient allocation of resources through the market mechanism. They argue that government intervention adds to the cost of labour and creates unemployment by making UK labour uncompetitive and providing incentives for workers to remain unemployed.
marlinbito answered the question on July 6, 2018 at 10:01
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