The Department of Labour must “get out of the dark ages” and focus on improved worker productivity if the Bahamas is to enjoy higher GDP growth, a governance reformer urged yesterday.
Robert Myers, a principal with the Organisation for Responsible Governance (ORG), told Tribune Business that the Labour Department and trade unions needed to stop pushing for increased worker benefits “if we are to lift ourselves out of this socio-economic recession”. Arguing that both were still “singing the same old song”, Mr Myers called for wages and benefits to be “held” at present levels until the Bahamian economy generated improved GDP growth rates.
He warned that any increase in labour costs and bureaucracy, through proposed reforms the Government has hinted at, would “discourage” the private sector from expansion and hiring, thereby undermining its own drive to spark economic growth.
Dion Foulkes, minister of labour, yesterday pledged that the Government “will not do anything to ruin efforts to move the economy forward, emphasising that growth and job creation were the Minnis administration’s main priorities (see other article on Page 1B).
He added that the Government would only advance labour-related reforms where there was “consensus” between the private sector and trade unions, and pointed out that the more “contentious” issues - raising the 12-year redundancy ‘cap’ and increasing the notice period - had yet to come before the National Tripartite Council.
However, Mr Myers, speaking after the International Monetary Fund (IMF) released its latest assessment on the Bahamas, continued to stress that the Government’s Ministry and Department of Labour, as well as the trade unions, are focused on the wrong priorities.
“What the Ministry of Labour and unions should be focused on is productivity, education and improved workforce skills,” the ORG principle told Tribune Business. “To keep hammering away on benefits and the like is very short-sighted.
“Where are these guys? The unions and Department of Labour keep singing the same old song, and they have got to start looking at this and become a significant part of the solution. They’re currently part of the problem.
“The solution is education, increased productivity and closing the skills gap. You cannot keep on doing the same thing and expect different results. That’s what the Department of Labour is doing,” Mr Myers continued.
“Come on guys, get out of the dark ages and get with the real discussion on workforce productivity, education. Let’s move the country forward and stop focusing on age-old stuff.”
Private sector fears over further labour law reforms, which would result in increased workforce costs, were fuelled after Mr Foulkes reaffirmed the Free National Movement’s (FNM) manifesto commitment to increase the redundancy notice period.
The Minister, though, told Tribune Business he believed his comments had been misinterpreted and taken out of context, as he never gave a “timeframe and process” for introducing such changes when responding to media questions.
Mr Foulkes added that this had been communicated to Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, in a bid to calm business concerns (see other article on Page 1B).
And both the Department of Labour and trade unions have shown they are aware of the need to improve workforce output, having helped organise and attended, respectively, a two-day National Tripartite Council Productivity legislation workshop in September 2017.
Bernard Evans, the National Congress of Trade Unions’ (NCTU) president, said then: “We need to boost productivity levels and propel the Bahamas’ economic competitiveness.” Obie Ferguson, his Trades Union Congress (TUC) counterpart, has repeatedly made similar statements and commitments.
Mr Myers, though, expressed surprise that there was no mention of workforce development and productivity issues in the IMF’s latest assessment, especially since these long-standing problems are universally acknowledged.
“There’s one more component, and that’s labour,” he told Tribune Business. “That is the human side of our GDP growth, and that’s being ignored by all of them. It’s critical.
“We’ve got to close the skills gap, increase productivity and control wage growth and the cost of labour until we see GDP growth year-over-year. It’s a nine out of ten report [by the IMF], but the ten out of ten is the labour component. Let’s get the conversation moving that way, and the unions and Department of Labour being proactive rather than a drag on the economy.”
Mr Myers was unsure whether workforce-related issues fell within the IMF’s remit, but added: “We have been saying for a long time that poor education levels have hampered GDP growth.
“There’s this massive skills gap, and we’re not preparing students and young adults for working life and employment. As we get GDP growth through foreign direct investment (FDI), we are going to see a continuation of the struggle we have now with education and finding skilled employees.
“That has to change if we are to expand and lift ourselves out of this socio-economic recession. We’re going to have to improve productivity at the very least and make sure we don’t increase, in any meaningful way, the cost of labour,” he continued.
“If the Government’s only focus is on labour support or laws, and not labour productivity and reduced costs and things like that, it’s going to be a struggle. There are far more competitive regions for foreigners that are looking to invest without any of the bureaucracy and labour headaches.”
Workforce productivity, together with improved technology, is a core element of what economists call ‘supply side economics’. Advocates of this theory argue that improvements in these areas result in greater efficiencies, allowing firms to reduce their production costs and increase output, thereby making them more competitive.
Bahamian businesses have for decades expressed concern over the difficulties they encounter in recruiting workers with the necessary skills to expand their companies, with many suggesting there is an insufficient supply of human capital. They also argue that this nation’s relatively high labour costs are not matched by productivity received.
Warning that worker productivity and costs were going to be “critical challenges for the Bahamas over the coming years”, Mr Myers added: “We’ve got to get productivity up, and until we see greater GDP growth we have to hold wages and the ‘grey cost’ of labour.”
Defining ‘grey cost’ as worker benefits, such as sickness and vacation pay, and the likes of National Insurance Board (NIB) contributions, he said: “We don’t want to burden businesses any more, as they’re already quite heavily taxed.
“It discourages people from investing in the Bahamas, and existing businesses from expanding and hiring.”
Comments
sealice 6 years, 11 months ago
Agree with Mr. Myers the idiot Ministers of Educations (lets just say all of em...) haven't done jack for education except sometimes build a new school that takes years and usually winds up in the public purse rip off..... AND the bloody labour unions get ahold of these "not as" educated persons and fill their heads with BS ideas (just like the church) and let them run amok encouraging everyone to work less but demand more? If anyone's seen BTC in Abaco they can attest to the fact that BTC is seriously trying to represent the Bahamas in the next olympics in the long distance sleeping events....
DDK 6 years, 11 months ago
Also totally agree with Mr. Myers.
rawbahamian 6 years, 11 months ago
Unions are going to soon start pushing for extra pay when union members show up to work on time and God forbid they should be productive at work which in return 2-3 months of paid vacation !
TalRussell 6 years, 11 months ago
Comrades, wanting be fair I read and searched for even an ounce 'accidental truth' of the assertions offered by Comrade Robert, and I can no find?
Everybody thinks they know best how change us natives when the only change the people needs is to return our beaches, private islands and crown lands to the natives. If we needs any kinds changing then why not leave us be to return back the kinds people we were before...a simple people not in need much and not time waste greedy pirates.
DDK 6 years, 11 months ago
Comrade, you need to search harder!
sheeprunner12 6 years, 11 months ago
Did the Minister of Education just made the Teachers Union president (Belinda Wilson) the chief in charge of the schools????? ......... Is that a rumour or is that truth????????
Porcupine 6 years, 11 months ago
This is a two-edged sword. Productivity has risen substantially in the US in the last 40 years. But, real wages have dropped in real terms across the board. Union membership is at an all time low there. Despite great gains in productivity, wages are going down and poverty is increasing. Go figure. On the other side is The Bahamas. Perhaps 1 in 100 Bahamians could keep a job in the US. In the modern world, business owners do not generally tolerate; constant lateness, incompetence, sleeping on the job, very poor attitudes, or stealing. There is also a reason why when people get educated, they rarely come back to The Bahamas to live. There is a concept called A Living Wage. The idea is that someone working a full time job should be able to make ends meet, maybe even raise a family. Until governments and business come together in understanding this, advocating for this, and implementing standards and commensurate wages, nothing can change. The world is in a race to the bottom. People no longer matter. Only "jobs" matter. Big business is booming. The poor are getting poorer. The rich are getting immensely richer, and gaining more control over the world's resources. On the other hand, this "give me a job" attitude here in The Bahamas is an utter embarrassment to decency.
sheeprunner12 6 years, 11 months ago
We sure get the "race to the bottom" idea ....... If we keep cow-towing to Amnesty, OECD and the UN, we will be first on the line in that race....... We have to grow some "national gonads" and stand up to these liberals who want to create and implement this utopian One World agenda aka 666.
TalRussell 6 years, 11 months ago
Comrades, nothing unites the Imperial red shirts more than that of self financial interests. It's keeping the wages low that most guarantees the divide of the upper class from the near poor and outright poor classes. This kinds talk is is old Bay Street Boys/UBP talk, and its been around ever since the end World War 11, and it is what will allow even a political party such as the PLP to resurface with renewed chance at governing strength. Same old Sir Stafford, Pop Symonette and Asa H. Pritchard kinds wage suppression talk.
DDK 6 years, 11 months ago
Comrade, there are those that would assert that the average blue/yellow shirt would take the cake in the doling out of low wages and benefits! Sometime you should remove those blinders, if only for a moment or two!
Economist 6 years, 11 months ago
It is clear that some of our bloggers have never owned a business or worked outside The Bahamas.
OldFort2012 6 years, 11 months ago
Or worked, full stop. Party appointed jobs do not count.
sheeprunner12 6 years, 11 months ago
There must be a better working, productive and respectful balance between the Tri-Partite Coalition of Government-private employers-Unions/employees ...... While Unions really only represent about 20% of workers in this country ........ and Government only employs about 15% of workers in the country ....... the vast majority of workers are employed in the private or informal sector with NO union representation ........ at the mercy of the Robert Myers-like employers in the country .......... These private sector bosses mimic the Government (or Public Corporations) - who really treats its workers poorly AND who dangles "political carrots" at the Unions at every opportunity it gets. This creates an unequal and unfair labour climate for all. Just look at what the BPSU or BNU are offered compared to the BEWU or BEMU.
That is a really dysfunctional state of labour relations for any FDI to be brought into and thrive.
Economist 6 years, 11 months ago
"Government only employs about 15% of workers in the country ... the vast majority of workers are employed in the private or informal sector" ...interesting..... Department of Statistics reported that 62% of the labour force was employed by the private sector.....that leaves 38% not working for the private sector. 38% is a big number.
sheeprunner12 6 years, 11 months ago
Ever heard of "personally self-employed" aka informal businessman?????
BMW 6 years, 11 months ago
Why do the powers that be only concentrate on the redundancy notice period???? If the labor force is so good and hardworking(as the money grubbing unions think) there should be no worry about being made redundant.
JohnDoe 6 years, 11 months ago
Silly comment!
johnmcntsh 6 years, 11 months ago
Although I agree with some of Mr. Myers statements, his placing of the lack of productivity all on "labour" is wrong. Almost everyone agrees higher wages without a corresponding increase in productivity is stifling to a successful economy but it is NOT the only reason. Freezing wages has NEVER turned an economy around. It is much more complicated than that.
Please take a moment and read this article published in March of 2017 in the Tribune. It really does help explain the issues that must be addressed in order to turn an economy around.
http://www.tribune242.com/news/2017/mar… Easing the cost small business start ups is key!!
TalRussell 6 years, 11 months ago
Comrades! What is there prevent the government from singling out the groceries items and bring them within 25% shelving pricing of what Miami residents pay for what is often the exact same brand name items? What a way to enrich the working poor and near poor to stretch their purchasing power by at least 50%. Comrades, what about the price being demanded at the grocery stores for a loaf of bread?
The_Oracle 6 years, 11 months ago
In effect Tal, you are asking Government to forego its taxes, and taxes on freight, and Vat on taxes and freight correct? Cause that would handle it damn near to the penny! eliminating business license tax on Gross income would help too. Just so we understand each other.......
TalRussell 6 years, 11 months ago
Comrade The-Oracle, a loaf plain white bread is the working poor and near poor's daily food staple item and with creativity and with a tin sardines, some baloney sausage or canned potted meat - you have lots meals choices at your fingertips.
In Nassau a loaf plain white bread can sell for $4 to $5, while in Miami, Florida the same loaf white bread is 99 cents to $1,78? No economist can come up with better way to give the working poor and near poor - more spending money than to lower the prices they must pay for 'bread basket items.'
realitycheck242 6 years, 11 months ago
Unions are like a mill stone around every organization thy are apart of.
sheeprunner12 6 years, 10 months ago
The present bunch of greedy Bahamian Union leaders are the main problem.......... they are mill-stones around their Union members' necks most of all ....... Most of them make big salaries with perks, while many of their members make low wages, pay big members fees and agency shop against their will ......... And to add insult to injury - many Union leaders are "in bed" with the politicians ........ It is an untenable situation for the weak economy, and union (and non-union) members.
Wonder how so many ex-Union Presidents end up in prominent Cabinet or civil service jobs???
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