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I would generally say that DM's would be seldem used. Is there any legal requirement stopping an advanced diver tour guiding divers at holiday destinations? [that's an actual question... i can't see that there is, as anyone but a DM or instructor wouldn't be able to accept an instabuddy or 2 when you rock up to a local dive site..]
and for courses, DM's aren't necessary but a huge help... so instead of taking 2 hours in the water it'd just take 3 or 4. you might find instructors demanding higher wages then.
at the end of the day diving is something that people are more than willing to do for free, so even if the majority of DM's unionised there'd be someone, somewhere willing to do it for free.
additionally, OP: Remuneration is one of the lowest forms of motivation for a worker.
The only thing I really disagree with is the renumeration thing. I think it ranks very high.
Re Advanced divers as tour guides....Would they get paid, be insured? If there is no pay would many do it anyway? Maybe, maybe not.
Without DMs the courses may be longer as you state, and thus the course fee higher. Higher instructor pay may well result, but then again that extra pay could go to a paid DM, and we're back where we started from.
Always someone willing to do it for free: agree completely, relating this again to the world of working musicians.