Kellier's paradoxical flight of fantasy

Robert Wynter, Contributor

My favourite laws of chemistry are those by Boyle and Charles regarding the interrelationships between pressure (P), temperature (T) and volume (V) for a unit mass of any gas, with the equation PV = RT indelibly written in my mind. The equation asserts that if the temperature of any gas is kept constant, volume will increase as pressure decreases and vice versa.

While chemistry is usually referred to as an exact science, neither economics nor politics fall in that bracket. However, the interrelationships between national output (GDP), national labour productivity (P) and employment (E) are indisputable, with GDP = PE. As in Boyle's law, any increase in employment without a commensurate increase in output will result in a lowering of labour productivity and its attendant challenges such as lower firm competitiveness and a reduced quality of life.

The Jamaica Employ Initiative Partnership Agreement (JEIPA), which seeks to create short-term employment in the private sector without any increase in output, will doubtlessly result in decreased national productivity. This was validated on HOT 102 FM a few days ago when the erudite Dr Leahcim Semaj described the JEIPA as being "crashish" and "JEEPish".

Speaking at the official signing of the JEIPA at Jamaica House on September 10, however, Labour and Social Security Minister Derrick Kellier announced that "the aims and objectives fit into my ministry's own mission of job creation and the contribution to economic growth that will flow from this".

But, by juxtaposing the initiative with his productivity-focused 2012 Sectoral Debate presentation titled 'Improved Productivity and Labour Market Efficiency ... Pathways to Decent Work and Social Protection', Minister Kellier intends to prove that he can somehow magically increase jobs and national productivity without any increase in national output.

To me, this indicates that the goodly minister is experiencing a grand flight of fantasy. Furthermore, the recently signed memorandum of understanding (MOU) between Mr Kellier's ministry and the Jamaica Chamber of Commerce (JCC) makes the latter an aider and an abettor in this flight.

Minister Kellier set the context in his Sectoral Debate presentation by declaring that "we are all now at the end of an important phase of our development when old dispensations have all but outlived their original purpose[s]. Perceived cosmologies, ontologies, and epistemologies now cry out for overhauling and retooling, if not for total replacement."

The minister continued to wax lyrical that his ministry's goals will be "contributing to economic growth, providing greater levels of social protection for our vulnerable citizens, and job creation". In order to achieve these goals, Minister Kellier assured his parliamentary colleagues that "our preoccupation with productivity improvement as the sine qua non for our economic prosperity is evidence-based," and then proceeded to reel off such proof.

Working to build Jamaica

In his attempt to describe how the productivity will be achieved, the minister announced that "the MLSS (Ministry of Labour and Social Security) will continue to work tirelessly to strengthen the capacity of the Jamaica Productivity Centre (JPC) in its efforts to build a more productive and competitive Jamaica".

It was very unfortunate that such a productivity advocate as Minister Kellier failed to indicate the current level of national productivity and the desired level to which the JPC will take the country over the next five years. In other words, our productivity-promising minister has absolutely no desire to be held accountable for national productivity performance.

Jobs are created essentially in two ways: demand-pull or supply-push. Demand-pull occurs when firms expand because of increased demand for goods and services and, in turn, create opportunities for additional persons to produce the rising output. Supply-push occurs when there is no real increase in demand for goods and services; however, to satisfy social objectives, jobs are created out of thin air and literally pushed into the firms.

Demand-pull job creation usually results in maintaining or increasing labour productivity; while supply-push results in the lowering of productivity. On a national level, job creation lags economic growth and can then reinforce it. Our focus should, therefore, be on drivers of economic growth such as investments in new production capacity or in increasing firm competitiveness to exploit existing capacity.

In trying to get to the bottom of the job
creation-productivity paradox facing Mr Kellier, a search on his
ministry's website indicated that its mission (or purpose) is "to
promote a stable industrial climate through tripartite dialogue, ensure
the highest standards of occupational safety and health at the
workplace, facilitate increased access to employment and effectively
manage social protection programmes ... ."

This
mission clarifies in my mind any apparent paradox, as job creation is an
explicit part of the MLSS's mission statement, while productivity is
neither explicit nor implicit. Therefore, while the minister's Sectoral
Debate presentation is replete with the word "productivity", we should
believe he is mission-focused and not expect much in terms of national
productivity improvement.

Heated
debate

To be fair to the minister and to the
hard-working JPC team led by Dr Charles Douglas, the Productivity Centre
is misplaced at the MLSS, being hamstrung by the latter's paradox. As
part of the Jamaica Employers' Federation's (JEF) team during the JPC's
establishment, I experienced the heated debate among the tripartite
(Jamaica Confederation of Trade Unions (JCTU), JEF and the Government)
working group regarding the portfolio ministry in which the JPC should
be located.

Many persons, including myself,
recommended that the JPC be located in the Office of the Prime Minister
(OPM) because of its potentially broad-based impact on Government and
the wider society. However, because of the heavy involvement of the
International Labour Organisation (ILO) and its strong focus on
labour-management cooperation, the JPC is located at the MLSS, despite a
brief sojourn at the OPM.

Unlike the MLSS, the JCC
faces no such paradox. Its mission is "to promote and assist in the
creation and maintenance of an enabling economic environment for our
members and other private businesses by advocacy, lobbying, providing
forums for exchange of views, disseminating information and facilitating
business needs".

An enabling economic environment
suggests a demand-pull approach to job creation. Rather than being
mission-focused by stepping up its efforts in advocating for such an
environment, the JCC has taken the misguided and seeming path of least
resistance to side with the Government in the anti-productivity,
supply-push approach to job creation, which runs counter to its own
mission. At a time when the country is demanding strong leadership from
all areas of national life, the JCC has been found
wanting.

There is little doubt that the economy needs
additional jobs and increased productivity. The JEIPA must, therefore,
be seen as what it really is - a short-term social programme naturally
belonging in the Social Security component of Mr Kellier's ministry. Any
intention to link JEIPA to national productivity increases or economic
growth must be dispelled. Instead, focus should be on the drivers of
economic growth and productivity; then jobs will
follow.

In order to extract maximum value from the
JPC, it ought to be shifted to the Office of the Prime Minister, where
it will have a clearer focus and not be bogged down by the MLSS
paradox.

Finally, the JCC's leadership must realign
itself to its mission by focusing the Government's attention on creating
an enabling economic environment.

Robert Wynter is
managing director of Strategic Alignment Limited, which facilitates
organisational transformation and leadership development. Email feedback
to columns@gleanerjm.com and rob.wyn@hotmail.com.