ABSTRACT
The highly flexible US labor market has always been considered an inherent strength of the US economy. The level of workers’ legal protection is well below that of other developed countries. Hiring and firing are less restricted and the latter also less costly, making layoff a much easier option than in many other countries. Unionization rates and minimum wages are lower, and unemployment benefits are less generous. The weakness (and the continuous weakening) of the main labor institutions affecting wage setting have given more room than elsewhere to the domination of market forces and to the prevalence of employers’ prerogatives at the expense of workers’ protection. Moreover in a consistent way with economic liberalism, the involvement of the US state in labor market policy is low by comparative standards, although it is strong in terms of macroeconomic and monetary policies. The United States spends considerably less than other developed countries on labor market policies, both as a share of GDP and per labor market participant.
