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Opinions Tue, 29 Sep 2015

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Job Creation, Internationalisation, Globalisation, and Disintermediation

By Dr Kwesi Atta Sakyi 26th September 2015

The implication for a world economy primed on only the profit motive is this ‘genocide’ of massive global unemployment that we are witnessing. Every company on the global scene has joined in the rat-race of outsourcing, disintermediation, internationalisation, and casualization of labour. All these practices are being done to drastically cut cost and drive up profits for the benefit of a miniscule of the total global population-the shareholders. What about the welfare of the majority of the stakeholders?

Do captains of industry realise that their mercantilist or beggar-my-neighbour stance is hurting many millions in the world who are without jobs? The world is currently precariously built on the model of B2C and B2B. It has become a world of ultra-consumerism, commercial elephantiasis, and industrial cannibalism.

Many jobs have been destroyed or eliminated as businesses now deal directly with customers without intermediaries like wholesalers, agents, factors, brokers, and retailers, among others. Many businesses have become virtual businesses or become online businesses, and they need very few workers and little physical presence. That is e-commerce for you.

Even the workers are freelancers and telecommuters who do work from remote locations, using ICT facilities. They engage in hoteling or reserving desks at their small-sized workplaces any time they want to touch base. Organisation structures have become flat, flexible, boundary-less, lean, mean, and efficient.

Producers have integrated tightly in their supply chains so as to reduce marketing transactions costs, reap benefits from synergy, economies of scope, and scale, and they have built industrial hubs, complexes, clusters, and agglomerations to gain critical mass. These industrial clusters have created dependencies, internal markets and internal customers, among others. They use EDI (electronic data interface), CAD (computer-aided design), CAM (computer-aided manufacturing), AI (artificial intelligence), CRM (customer relationship management), among others to gain competitive advantages.

The existence of information asymmetry, incomplete contracts, and hidden costs make the trading relationships still an uneven playing field for both customers and employees. The craze for global presence by the MNCs has led to relocation and migration of jobs to cheap labour sources such as South East Asia. World class global manufacturing has led to scatterisation and fragmentation of production. All these practices have destroyed some old jobs and created new ones elsewhere. There is a global convergence of tastes in the consumption of products like Apple, Samsung, Nike, Mac-Donalds, Subway, Coca Cola, KFC, Unilever, BP, ExxonMobil, Cadbury-Schweppes, among others.

Today, the mines which used to employ many workers in Ghana and Zambia have become heavily mechanised and capital-intensive such that they have created haemorrhage of jobs. Some years ago, we had many sailors and seamen from West Africa on foreign shipping lines such as Norska and Elder Dempster Lines. But today, most of these ships have been automated and they have very few workers. Japanese and Korean car and electronic manufacturing plants have deployed robots and automatons to do some jobs. This has increased productivity and more profits but caused labour redundancies.

Some time back we used to have typing pools at workplaces where many lady typists would give supporting services. All these jobs have fizzled away with the advent of the computer and laptops and smart phones. Many Chief Executives, who used to have chauffeurs, personal assistants, gardeners, cooks, and the like, now engage in DIY or do-it-yourself, under enormous amounts of stress and executive burnout. Some time back in the mid-80s, we had Thatcherism and Reaganomics with massive denationalisation, privatisation, and sale of state-owned enterprises which culminated in massive retrenchments in the New Order era. The Trade Unions were demobilised or immobilised and put into a cooler for good.

The mantra then was to keep government outfits small and efficient. The industrial base in most developing countries were eroded and put at zero even though their output at least had domestic market. Not all of them were viable though. We had state farms and state housing units which created ready employment. Today, employers are looking for multi-skilled workers who can do the job of many workers. The few workers who are working now in developing countries are overworked, overused, and poorly remunerated. Besides, the dependency load has now tripled for existing workers who now have to shoulder many responsibilities because of our extended family systems.

There is need to carry out research through job analysis surveys to ascertain this phenomenon of labour exploitation and abuse. In order to create more jobs, it will be better to create more jobs through job-sharing, job-shadowing by young interns, job fragmentation, and job redesign. We need to carry out job studies to know about job content. If some current jobs are not fragmented, then we shall call some current job holders as the new form of slavery or subtle slavery. Some interns are abused in Africa where they receive about a tenth of the median pay as monthly pay. It is some of the big MNCs which are involved in such sub-human and unethical practices of casualization of labour and underpayments.

Many workers today do not have work-life balance or quality of working life because of stressful workloads, long working hours and tight performance measurement targets. Instead of lessening their load by employing more hands, top heavy managers decline to engage new hands. Many of our developing countries do not operate unemployment benefits or the dole, so it is incumbent upon them to create more jobs to reduce levels of poverty. There is more room for labour expansion in the service sectors of education, transportation, health, telecommunication, tourism, entertainment, and security services.

Captains of industry should be assembled to tell curriculum developers and educational reformers which courses should be taught in schools and colleges to provide the skills set which industries are looking for. This will avoid the current mismatch between what students learn in school and what employers expect from them when they are employed. Firms and companies should be convinced to create more space for internships as part of their Corporate Social Responsibility. Those firms which take on more interns should be incentivised by being given tax rebates by the tax authorities. Interns should be paid something like 30% to 40% of current median pay, and not the current paltry 10%.

The ILO should persuade their member countries to monitor abuse of labour by the big players in the private sector. Even though we have massive unemployment, we have no need to witness the return of the iron law of wages where real wages are determined strictly by the price mechanism. Instead, wages should be determined partially by wage relativities, marginal revenue product of labour, minimum wage legislation, professional qualifications, special aptitudes, the living wage concept, and the collective bargaining power of trade unions, seniority and loyalty or tenure on the job, job responsibilities, performance-related pay, among others.

However, the good news for the youth who are new entrants to the labour market is that with ICT and their creativity, they can create their own blogs and market their products online since they are ICT savvy. Those who are very good at the performing arts and also in writing, painting, and handicrafts can market their products online and earn a living. They can become like the technopreneur, Mark Zuckerberg of Facebook fame. Those with ICT education can develop their IT solutions and sell them to Microsoft for mega bucks. Those who are good in cooking, carving, weaving, gold-smithing, among others, can set up their shops and start trading. There are many market gaps to exploit.

The youth should challenge the existing paradigms or mind-sets and break out into start-up ventures to become entrepreneurs. They should start small and grow by their learning and experience curves. They should acquire more skills and knowledge and research on many issues. To survive on the current labour market, you need to be multi-skilled and multi-talented. Good luck.

Columnist: Sakyi, Kwesi Atta

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