Tuesday, July 27, 2010

Economic basics: Edmundo Orellana on half-time jobs

It is far too easy to become swept up in political strategies and statements. While the outside world is consumed with questions of OAS recognition, inside Honduras, policy decisions continue to be made, and these are moving mainly below the radar.

It is worth stopping and reminding ourselves: the coup was spurred by economic interests. Changes in economic relations are part of the ongoing aftermath of the coup.

Edmundo Orellana, in an editorial brought to our attention by Charles at Mercury Rising (and to his attention in turn by El Cid in a comment on the Daily Kos) reminds us that the current Congress has promoted a change in the fundamental labor market in Honduras that is likely to be bad news for the Honduran working poor for years to come, promoting it with a dubious claim that it will improve the labor market.

Called the "media jornada laboral", this law will allow salaried jobs to be part-time (literally half-time). Unions and congress members differ on whether the proposal would even be legal under Honduran labor law, with congress members suggesting the new half-time positions would come under laws governing temporary (term) employment.

Union leaders called for public discussion of the proposal before it was implemented by the congress. Union leaders see it as putting at risk a variety of contractual benefits won by unions for their members.

Pro-business media support a government claim that the new law will create 600,000 jobs (or 400,000 jobs) over the next three years.

But this misses the point: splitting existing jobs in half may allow the government to count more people as employed, but there won't be any increase in jobs: just a move to have people share those that might exist. The presumption seems to be that businesses might be prepared to hire someone for half-time in the present economy, but cannot afford to hire full-time, but there is nothing to really suggest this is the case.

As José Luis Vaquedano of CUTH (Confederación Unitaria de Trabajadores, United Confederation of Workers) said
What do you gain by paying less salary to a worker who has a budget that he/she has to make in the face of the high cost of living?
What you gain, of course, is a labor force working for less cost, and if the suspicions of the unions are right, without the benefits that come with full-time employment. But that would be a labor force with half the pay of full-time workers, when even with the Zelaya minimum wage increase, full-time base pay is less than needed for a household to meet its basic costs.

As Edmundo Orellana argues, a pretend jobs act, which he calls evidence of "improvisation", isn't what the Honduran economy needs.

Called simply Work, his editorial reads in part as follows:
There is no work because there are no new investments nor increase in existing ones. On the contrary, the latter have decreased.

The principal cause of the nonexistence of sources of work is the crisis that started the 28th of June of last year.

We all lost. The salaried their income. The micro- and small- businesspeople, for the most part, lost their patrimony and their family tranquility. The large investors did not lose their patrimony, it is true, but they did earnings, and not a little.

There is work where there is investment. It doesn't matter what scope. Small or large, it always generates work.

In today's society without investment there is no large-scale or sustained work.

The policies of the State, then, should be concentrated on all the factors of production. Betting that the economy is going to improve or that income will be guaranteed, creating half-time labor positions is an error. "Bread for today and hunger for tomorrow", said the grandparents. With the added aggravation that tomorrow is as close as within three years. And afterward?

With this measure the environment will be shaken up more unnecessarily and it will not stimulate investment nor will it increase production. Still less will it favor the worker, because he or she will have to accept half-time jobs and receive a salary below the minimum wage. It's not true either that a half-time job will be more guaranteed, because there are many unemployed and few employed. In addition, nothing will assure us that the bosses will not take advantage of this law to affect those who already have work.

With such a measure it is evidenced that there does not exist a strategy to take care of production. Improvisation is the rule that is imposed on governmental management since the Law of Planning was rescinded. Nonetheless, now that it is affirmed that there is a plan for development, is when we most perceive improvisation.

The decisions that are required-- and urgently-- should aim directly at creating more sources of work by investment. Nonetheless, insofar as the government does not have an integrated vision of the situation of the factors of production to confront the problems that affect them, to stimulate the circumstances that would maximize them and generate a climate of confidence for investment, some of the measures that will be adopted will be no more than patches, and others, true time bombs.


Anonymous said...

Thanks for providing the context for Orellana's OpEd. His point about substituting full-time work with part-time wasn't obvious without the information about the pending law.


RAJ said...

Yes-- I am not hooked in on DK so I could not follow up there, hope you will. This is one of many things going on while the surface pageant unrolls.