Labour Market Reform in the Context of Regional Integration ... a brutal but necessary adjustment to reflect labour underemployment caused by a growing labour force that has outstripped job creation and the need to become internationally competitive … Paul Collier, 2 an orthodox scholar, summarised real wage developments in Zimba­bwe from this perspective. According to his assessment(1995:5), ­... certainly, inflation has been faster during the liberalisation than prior to it, and so it is reasonable to conclude that the liberalisation has contributed to the decline in real unskilled wages. Note that this is not a decline in the equilib­rium real wage, but rather an acceleration in what was already a gradual ad­justment to the equilibrium. Such an adjustment raises employment. The transfer from wages to profits may also raise savings … On the lack of employment response following the decline in real wages, the IMF bemoans the slow progress made in dismantling labour market regulations, con­tending(1993:39) that ­... the persistence of high unemployment in a large number of countries re­mains a visible indication of the lack of progress in increasing the flexibility of labour markets … The second form of flexibility often associated with adjustment is functional flex­ibility. Functional flexibility refers to the internal labour market of the firm. It in­volves the flexibility of working practices and job structures, among other things. Under threat from competing imports arising as a result of trade liberalisation, local firms are under pressure to restructure their internal labour markets so as to survive. In order to improve the quality of their products, companies have been forced to introduce new technologies. The introduction of these technologies has meant that new forms of work organisation have to be adopted. Even in those firms where the high cost of both domestic and imported capital arising from high domestic interest rates and exchange rate depreciation, respectively, has made it difficult to introduce new technologies, the economic hardships have necessitated some form of adjust­ment. A forthcoming study by the Zimbabwe Congress of Trade Unions, the Em­ployers’ Confederation of Zimbabwe and the International Labour Organisation’s Southern African Multi-disciplinary Team found that most companies have adjusted to competition through downsizing their workforce(the lean-mean approach). Most countries in the region, notably South Africa, are going through similar processes. Work has to be reorganised amongst the retained employees. A Critique of Orthodox Labour Market Reforms Countries undergoing structural adjustment have deregulated their labour markets to facilitate both real wage and employment flexibility. Employment security regu­lations have been eroded, and the dispute- and grievance-settling machineries have 73