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BW Businessworld

The Human Dimension

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Venus crossed the face of the sun last Wednesday. The world's most powerful telescopes were focused on the event. Thousands with less sophisticated instruments witnessed it too. For the millions without such weapons, cheap dark glasses were being sold on the streets of western cities. If Venutians were watching them, they must have been flattered by the attention, and impressed by the fact that Earthlings could spare the time for such a non-event. 

They could not have read worldly statistics, which would have told them another story. Normally, three-fifths of earthlings are employed, or in other words have paid work; in Iceland where it is normally too cold to frolic in the open and where buildings are heated by abundant hot water from geysers, four-fifths of the people work. But there are now countries such as Italy, Greece and Hungary where fewer than half the people are working. India is also one of them; but that is because a high proportion of our people are too young to work. The worst is Gaza where only a third of the people find work; in that region it is bad luck if one is not a Jew. 

Even those that are employed often work less than full time. In Germany, which is Europe's most prosperous economy, a quarter of the people work part time. As the supply of jobs has declined, many European countries have promoted part-time employment. None has gone so far as the Netherlands, where almost half the jobs are part-time. This may sound like a luxury to those who have to slog full time; but the part-timers do not look at it that way. Whether in France, Spain or Italy, almost a third of the part-timers would rather have full-time jobs. And in Spain, Portugal or Greece, four-fifths of temporary workers would rather have permanent jobs. Low-wage workers are more likely everywhere to be in part-time or temporary work. Jobs, even in rich countries, can often mean poverty combined with work. Poverty levels are high in the US, whose social security levels are low, and in Israel, where earnings are correlated with religion; but it is not uncommon in rich countries for a fifth or a sixth of the people to be living in poverty.

News about Arab spring and riots in London are not always connected in the public mind with these figures of jobs, wages and unemployment, but the possibility is always there that economic distress would erupt in social unrest. The International Labour Organization got Gallup to conduct polls in various countries about the likelihood of disturbances. It has not changed much in any part of the world. But while it has gone down in Asia and Latin America, it has gone up in Europe, Africa and West Asia.

What is remarkable is that the ILO has modified the views it once held about social legislation. It finds no correlation between legal employment protection and actual employment, and sees the possibility of strong employment protection discouraging employers to give permanent employment. In particular, the lessons of single-country studies are that employment protection is associated with lower productivity and higher absenteeism among workers. This makes sense; if workers are guaranteed their jobs and wages whether they work or not, at least some of them would be tempted to work less. The ILO is still not convinced that pro-worker legislation works against the workers' interest; it believes that such legislation is good as long as it does not go too far. But it is far less dogmatic about the desirability of such legislation.

Trade unionism must be a part of the ILO's institutional religion, and it has not entirely lost its beliefs. For instance, it admires the new Australian law, which forces an employer to negotiate with a trade union even if just a single employee belongs to it, and makes a provision to impose industry-wide collective bargaining in industries where trade unions are underdeveloped. But it also admires Austria, which has ordained that 1.54 per cent of a worker's wage would be deducted and credited to a severance pay fund, to which he would have unrestricted access if he lost his job. Such a provision would be redundant in most advanced countries because of their social security; in other words, workers would be paid by the state if they lose their jobs. But it would be a good idea to give workers access to their provident fund accounts in India if they lost their jobs. The government may consider it improper because provident fund is supposed to secure the workers' long-term future. But the long term would be irrelevant if the worker dies of hunger in the meanwhile. Those in power have great ideas about doing good to workers; but as a result, they refuse to ask workers what they want.

(This story was published in Businessworld Issue Dated 18-06-2012)