Thursday, March 21, 2013

Unmasking T&T Trade Union Policy

There has been a prevailing assumption that unions in Trinidad & Tobago always operate in the interest of workers and the society. This notion is hardly ever challenged in the mainstream as it is deemed too unpopular and would spark the ire of the unionized labour force.

There basically remains only one main thing that determines increased wages in the long run i.e. labour productivity. Because if an individual is productive and there is demand for his/her services their wages / salaries will be bid for by employers up to what they are worth in the market place.

If unions seek however to establish wages by the use of intimidation, force and coercion higher than their real market worth they create unemployment and inflation. The most common way coercion is levied is by means of a strike that is not a peaceful one. A peaceful strike is legitimate in that it allows workers to withhold their labour to demonstrate the the employer their perceived value especially when the employer is unable to replace its workers with equally suitable employees at the wage rate striking workers refuse.

However unions threatening intimidation to prevent any dissenting union members from returning to work or new employees from accepting abandoned positions is in effect not protesting against the employer but rather a protest against job seekers. In effect preventing new workers from exercising their best available option for employment.The unions are therefore asserting positions of privilege over other job seekers and are using force to maintain this privileged position against the wider population.

Higher Wages Without Increases in Productivity Leads to Inflation & Unemployment

Unions also appeal for solidarity and support from the population predicated on the notion that workers are always the victims and that increases in wages and salaries somehow is advantageous to other workers. 

This is unfortunately not the case. In fact quite the contrary increases in wages above market rates is detrimental to other workers; because increases in wages without increases in productivity spurs inflation. More dollars are chasing the same quantum of goods or producers simply increase prices or in the instance of state owned companies there is increased tax payer burden. Paradoxically workers are no better off since they endure decreased purchasing power in the long run.



Similarly artificially pegging wage rates above the market rates also prices out job seekers from being hired by employers. Higher wages naturally mean lower demand and over supply of workers thereby creating a surplus (unemployment) in the labour market.

Other union policies also exacerbate things, unions typically oppose payment on the basis of output or efficiency, and insist on a standard hourly, daily or monthly rates for all their members regardless of differences in productivity.They insist on promotion for seniority rather than for merit and the avoidance of labour saving technology. This has served to reduce productivity rather than increase it for the ultimate benefit of society. 

How Trade Unions Can Really Serve Members and Society?

In reality the best way unions can serve their members is by minimizing information asymmetry in favour of the worker i.e. where the employer has more or better information than the worker to ensure the worker receives true market value for their services. This can be done by regularly compiling and publishing objective data on an on-going basis so that workers can ascertain their true market value thereby minimizing information asymmetry.

This service to members would be especially beneficial to members when the employee has less leverage and errors made with regard to employment selection could be more costly to the employee than to the employer. Consequently in a union environment an established recommended standard wage for a certain class of work could equalize bargaining power and potentials risks to the employee. This should still of course be subject to free negotiation between employer and employee.

Moreover; trade union focus should primarily be on improving worker productivity which would over time translate into increased production, wages, profits and all round benefits for society. 

7 comments:

  1. “You're not to be so blind with patriotism that you can't face reality. Wrong is wrong, no matter who does it or says it.” Malcolm X. People saying we lazy, selfish and greedy....ah set of people running their mouth and don't know nutting. Petrotrin contributes more than any other company to the GDP(gross domestic product) of this country...I guess is because we lazy? You probably not lazy enough to work there, ent. Fighting for ones rights seems to make u an @ss to this society. the company you working for should tell you that they allowing the government to use employees pension plan contributions to make investments.....might not bother you if you have no pension to get where u work or you are a PP loyal. Further more you probably know nothing about the volatile hydrocarbons that we have to work with, the health risks we are exposed to......Central nervous system (brain) effects including headaches,dizziness, loss of balance and coordination....respiratory failure, leukemia, cancer, liver or kidney dysfunction and death. nah we shouldn't fight for a better medical plan we just like costing the company money, ent. They should fire your backside and hire a contractor to do your wuk or just fire you and wuk the rest of employees like slaves in the cane CAUSE THEY LIKE THE PLACE SHORT STAFFED...... Ah set ah allyuh like to pass judgement when if u was in d same situation u woulda do d same thing. The company where u working should hire a man from outside your organization and make him the manager when you was acting as manager for over 5 years with a great track record......that enh go bother allyuh because that's wha trinis like.....ah set of friend thing. You shoulda be like me, waiting nine years for a singed off upgrade....The people who high up the ladder don't like to see those at the bottom being anywhere close to them so as much as they can, even when their business done fix (guess what their salary looks like) they still trying to deny the small man what is owed to him. IF YOU DON'T KNOW VARIABLE PAY IS A PART OF THE COLLECTIVE AGREEMENT SIGNED BY THE UNION AND COMPANY, SO IT IS DUE TO US......DIDN'T PETROTRIN PUT THIS MATTER BEFORE THE INDUSTRIAL COURT LATE LAST YEAR AND THEN WITHDREW IT...AH WONDER WHY.....The injunction is what we wanted, to get the option of having A COURT APPOINTED CONCILIATOR....WHERE HAS NEGOTIATIONS REACHED FOR 2010 TO 2013, JUST STARTED.......THIS ECONOMY SO UNSTABLE YET ALL D FETES FOR CARNIVAL SELLOUT, EVERY FRIDAY ALL THEM BAR RAM WITH PEPOLE TRYING TO SAVE A DOLLAR, WHAT WE REACH NOW PCY OR PCZ, AH SET OF NEW CAR AND VAN LIKE MONEY GOING OUT A STYLE AND WHAT IS THE PRICE FUH A HOUSE NOW? AND THEY GOING LIKE HOT BREAD...... Fire us HA!! with the qualifications and years service we have then surely petrotrin AND THE COUNTRY will crumble........ Allyuh talk nah...Cyant talk!!! REPLY LEMME HIT ALLYUH FOR SIX.........

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  2. Thanks Mark. We appreciate your comments.

    Your grievances may be valid, however if you think Petrotrin is anti worker or unreasonably unfair you are free to find a job elsewhere.

    Though it may be inconvenient for you to find another opportunity and/or you are comfortable where you are, clearly you and other employees have made a rational evaluation of available opportunities and have ascertained your best option is to remain at Petrotrin in spite of the poor treatment.

    I do believe however if you have the skills, work ethic and the right attitude you'll be able to move on to greener pastures if you so desire and free yourself from the clutches of Petrotrin.

    Your frustrations outlined many of them valid should be directed not at me but at management and ultimately the real puppeteers your elected representatives, who are the architects of this system that ultimately serves their political interest.

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  3. Do you love your country? I am certain you do, yet there is always trouble in paradise, like crime spiraling out of control, so groups like fixintnt are formed in an attempt to divert us from peril, similarly as the OWTU does for workers. Because we are faced with adversities does not mean we must look for another country to reside in or in this case find a new job. Petrotrin is a multimillion dollar organization, it is no fly by night parlour but because of injustice and corruption industrial action must take place. Elton Mayo believed that motivation was improved through making employees feel important so why is that theory not applied here?.....Sorry but this comment was not only directed to you but to other members of the public that have a negative view on our actions and making are derogatory statements. If we were working at a corcus bag making company and took the same stand many people would not be so repugnant but because we supply the country with a necessity our action is frowned upon. The disruption felt by society is only collateral damage as a result of poor industrial relations.

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    1. I love my country as you do you. But I do not love the apparatus called the state. There's a distinct difference there.

      Furthermore a state company is not a country. Petrotrin employees are not citizens of Petrotrin entitled to a job there.

      When analysing the problem it is imperative not to try to cure the symtoms while ignoring the disease. The corruption and injustice are mere symtoms.

      I would encourage you to identify the genesis of the problem i.e. the government system by which the state can establish a corporation with exclusive monopoly status, with no profit motive or incentive to be efficient.

      There is no doubt that increased efficiency could be achieved if the company was well managed with motivated staff however there is no incentive to achieve this goal since Petrotrin has the privilege of being a protected monopoly.

      Without such privileges Petrotrin would have long gone out of business and made way for a better managed entity for the ultimate benefit of society. This creative destruction process unfortunately is outlawed by government decree.

      Because of this the country can be held for ransom.

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  4. I think your basic assumption is flawed, because a) it applies in a labour market operating under free market principles, which ours doesn't, b) it applies to skilled labour (semi-skilled and unskilled labour has less negotiating power) and c) it esentially posits that people who can't negotiate for themselves or whose labour can be easily replaced shouldn't earn, or shouldn't earn a living wage, which I thought we'd all agreed at some point in the 30s was inhumane.

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  5. Also, in this country, output/productivity is a lot of times not the result of labour, but of poor management/mismanagement. Trust me, I see it every day.

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    1. Worthwhile comments.

      However it is important to consider that all markets inclusive of the T&T labour market essentially begin as free markets but for artificial and coercive intervention by the state.

      This is no different in any labour market where workers are offering their services to a buyer (the employer).

      Consider also that all workers start off unskilled but overtime skills are developed making them more skilled and productive. It follows therefore that the less skilled you are the less productive you are and consequently the less of a wage you demand, the opposite is also true.

      Problems occur however when the buyer or seller has a privileged monopoly status which they can leverage the exploit other market participants.

      These privileges are usually bestowed by Govt. decree which is ultimately the genesis of the problem.

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