Thu | Aug 24, 2017

Martin Henry | State of labour

Published:Saturday | May 21, 2016 | 5:13 PM
Martin Henry

Tomorrow is Labour Day, closing out National Workers' Week.

What is the state of labour as we approach another Labour Day? We forget, at our peril, that it was labour riots in May 1938 that launched the trade unions and the political parties, one of them specifically named for labour.

The teaming up of labour unions and the political parties has delivered a string of benefits to workers at least those in formal employment. But we come to Labour Day with an official unemployment rate of 13.5 per cent of a strangely determined 'labour force'. This is just about the average unemployment rate since Independence, moving up and down a bit, spiking at 25 per cent in the mid-1970s, but generally hovering around 13 or 14 per cent over all this time. Youth unemployment is now two and a half times as badó34 per centó coming after heavy state investments in education for growth and development.

The STATIN 'labour force' is 1,305,000. The working-age population, taken from mid-teens to 65, is 1,777,542, according to the 2011 census. So, poof! Nearly half a million Jamaicans (472,542 people), or 26.58 per cent of the working-age population, have simply disappeared from the real labour force. Because, according to STATIN, the actual labour force is made up of people 14 years and over who are employed in any form of economic activity for one hour or more during the survey week or are not employed but were looking for work during the survey week.

Where are those non-workers, non-people, and what are they doing?

And those who have worked for an hour or more in any form of economic activity, i.e., in cash income-earning activity?

Despite the gains made by the labour unions and offered by the Government of Jamaica, the vast majority of Jamaican workers employed, unemployed, and not countedóare engaged in non-decent work, by International Labour Organization standards.

The bulk of the working-age population is really involved in petty hustling and seasonal low-paid manual employment in agriculture and construction.

The vast majority of those who have jobs, many decked out in pretty-pretty company uniforms, are the working poor whose net income cannot sustain them at minimum levels without some kind of subsidy from other sources. The working poor include the thousands of security guards and all the ground-level staff in the celebrated tourism andhospitality industry and all civil servants at the sub-professional levels.

The income tax relief offer by the new Government is nothing short of a radical and long-overdue break for the PAYE working poor.

Something is fundamentally and deeply wrong with an economy that cannot offer a $16-billion tax break to its PAYE working poor in a $580-billion Budget. The figure floated is that 72 per cent of the 426,000 PAYE Jamaican workers earn less than the $1.5-million tax-relief threshold.

Former Prime Minister Bruce Golding, as Mr Shaw noted in his announcement of the tax relief, has convincingly demonstrated that the $1.5-million threshold is only a 1980 threshold of $7,500 when adjusted for dollar depreciation and for inflation. A devastating demonstration of not only the PAYE worker's proportional loss of take-home value for work over the past 36 years but of the enormous decline in value of the Jamaican dollar and the negative impact upon consumer prices.

What are the subsidies for survival to working-age Jamaicans who are not looking for work, who are officially unemployed, and who are trapped in uneconomic non-decent work? The bulk of the real labour force.

Start with extortion and the crime economy, including scamming and its predecessors on which tens of thousands of Jamaicans and entire communities survive.

Pull remittances out of the system and watch households and the whole economy buckle in around a hollow belly.

A large number of the working poor emerge nicely dressed each morning from squatter settlements, more nicely styled as informal settlements, in which a third of the population lives. Or they come from overcrowded shared facilities because they cannot, on salary, afford either mortgage for commercial home ownership or rent for decent independent premises. Thousands of Jamaicans, including nice, decent people traipsing off to work in pretty-pretty uniforms, provide their own electricity subsidy by tiefing light. And water, too.

We seldom think of it in these terms, but the travelling poor, including the working poor commuting to work each day, enjoy a significant subsidy from Government dishonestly holding down the fares on public transportation provided by private operators to subcommercial levels. So the gas tax increase comes into effect immediately it is announced, but fares are not modified and operators are threatened by the authorities about 'unauthorised' increases. Fares are not allowed to move in line with the increasing costs of operations. The poor gets a free ride, but not at Government's expense.

But labour itself, although the recipients would prefer if this is not put in such stark terms, is providing massive subsidies to the 'profitability' of businesses and the functioning of Government by being manifestly underpaid. Labour has been forced and bamboozled into delivering more than its fair share to hold up the falling sky of the mucked-up Jamaican economy.

I have written about the chicken back (and fish back) poverty index. We hear consumption rates for these refuse commodities are going up as the working poor, the unemployed and the uncounted in the real labour force adjust their dietary intake downwards to match their shrinking pockets.

The Royalton collapse brought up again the issue of occupational safety and health and the laxness of regulation and enforcement. A new OSH law has been in the making since 1995, 21 years now.

In this modern world, only around a quarter of the population has any kind of formal certification of skills for work. The HEART Trust/NTA has been around since 1982, taking two per cent of the payroll of companies.

Only eight per cent of Jamaicans have health insurance and a similar number with any pension plan other than the NIS. While the NIS covers all workers in the formal sector, its payouts are so way below salary replacement they are a joke. And we've been advised that the 1966 scheme is on a trajectory of unsustainability.

Minister of Labour Shahine Robinson has a lot more to labour on than the regrettable death of an overseas farm worker in Canada. The export of low-skilled manual labour at our level of doing it is a dead giveaway of the bad state of labour at home.

Jamaica has a shiny economic sector symbolised by New Kingston, the Hip Strip in Montego Bay and by a handful of big modern profitable companies. But the vast majority of the country's full labour force is economically marginalised, including the working poor, which is the bulk of those employed. The marginalised in this country, with the second highest level of income inequality in the Western Hemisphere, survive off various illegal and legal subsidies. We should use Labour Day to remember 1938.

- Martin Henry is a university administrator. Email feedback to columns@gleanerjm.com and medhen@gmail.com.