Sunday, July 13, 2008

Boring Drab Weather and Entrenched Employment Protection

Anybody who came to England for the first time in 2006, when the El Nino was on full, would have thought they had stumbled on the perfect paradise to hide away if Global Warming was becoming true.

Well this summer, the El Nino and La Nina effects are gone at last, and the cloudy, unpredictable, sometimes chilly, grey and wet weather have reminded me that this is much the typical English summer. If you get a sunny day, you grab it, because it might be the last one you see for a long, long time.

A small local Chinese Grocery supermarket that opened up only a year ago is closing down and they say they're going back to China. Quelle surprise, as Julian Clary would say! It doesn't take people long to figure out now that there's no point in hanging around in England, when things are so much better at home.

Walking down one of the nearby major High Streets last week, I counted at least 5 shops that were closing down. Nearly every shop had a sale on, even though summer sales do not usually start until end of July.

The recession is on everyone's minds and lips. It may have taken 6 months longer for it to happen than in the USA, but it has gotten through to the man in the street. This time round, the property market went down before the retail business, and before the job market. I suppose that should have been predictable, since the property market has been the main engine of the UK economy over the last 6 years.

Oh yes, the job market is disappearing, and of course, the private sector has gone first. The public sector is protected by unions and endless employment law, and with a Labour Government in power, there is no chance that they will have to absorb cutbacks. Nonetheless, the unions will still fight for above inflation pay increases, even though they are lucky to have jobs, when all the people outside the public sector are losing theirs and have no new jobs to go to.

Yes, if there were an election in 6 months time, the Conservatives would sweep into power, and things would be sufficiently bad that they could probably do the one thing that nobody has dared to do for 30 years:

Remove enough employment protection so that it is quick and easy to remove unproductive and no longer required employees.

You see, despite all the reform from Thatcherism, this was never actually achieved in legislation. No, the only way to get rid of employees was to make them redundant, and this required organisations to re-structure themselves, or be slyly driven into bankruptcy, just to get rid of dead wood. The other ruses by which dead wood could be removed were much more roundabout, but became so common that they defined corporate business practice from the late Eighties to the early Noughties. They were of course, firstly Privatisation, and then secondly, Outsourcing.

Privatisation was essential to revitalising the European and especially the UK economy. Anyone from overseas who saw in the early Eighties, the European PTT (post and telecoms) organisations, for example, used to laugh their heads off at their backwardness, incompetence, inefficiency and lack of productivity.

Outsourcing was a far more ridiculous and devious solution to the need for organisational restructuring while keeping Seventies employment protection. It was also far less effective, because TUPE was upgraded to protect the rights of employees who were part of the organisation that was sold to an outsourcing company. What resulted was that dead wood ended up being transferred to an external outsourcing company, and only by extensive attrition and sidelining and eventual redundancies were useless and ineffective employees eventually removed from being paid to do nothing, or worse, being paid to do harm to the rest of their organisation.

None of the outsourcing would have been possible if Britain had not welcomed with open arms every illegal immigrant who was willing to work without being able to answer back to their boss in English. Yes, they took their pay, and didn't complain, which made them far more desirable than local employees. Of course, this eventually pissed off everyone in the country, because guess what? We have had a Labour Government since 1997, and this was what they were encouraging.

The French might only now be catching up with the UK, but the UK still has employment protection that defies economic sense. In this recession, I think the Tories when they take over the government, might be given the democratic power to remove the last nonsensical employment protection from the rulebooks. Is this a good thing? Yes, but it is sadly much too late. All that employment protection was the reason why British manufacturing stayed so uncompetitive that today, none of it is owned and managed by themselves, and what there is left of manufacturing survives because of factory robotics.

Well, robotics use oil, and human beings need physical work, so this is a silly state of affairs. This is the time to ask for a democratic mandate to remove obstructive employment protection laws. This can be done now because all the industry is gone, and because the welfare and social security system can be kept operational without the need to keep employees in jobs where they are producing nothing, or even less than nothing.

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