It is true that the Ministry of Labor is not responsible for
creating jobs, but it is also true that it can destroy jobs through labor
policies that make it difficult to match workers to jobs and prevent the
economy from leveraging the labor force at hand.
اضافة اعلان
One of these destructive policies has been the labor
segmentation policy (dividing the labor market into separate segments that are
distinguished by different characteristics and behavioral rules), which had
been a favorite of almost all recent labor ministers.
One of the main features of the labor market vagaries
observed over the past 50 years throughout the world relates to labor market
segmentation. If it exists, it should be based on educational attainment or
skill endowments. It should not be based on nationality, gender, sector, and
legal status.
Studies since the 1970s have addressed, with a variety of
tools and theorems, the many negative effects of segmentation. The negative
economic and social impact of the latter segmentation types are numerous: wage
gaps among segments, variances in access to training and social security,
different working conditions and tenure; restricted access to jobs; absence of
promotion to better jobs; lower productivity; higher unemployment; employment
instability; and greater informality. Many of these are present in the labor
market in Jordan.
It is not necessarily true that Jordanians would want to or are able to replace the guest workers in some of the closed segments. Research has shown that Jordanians seek working conditions that provide regular and timely payment, compensation for overtime work, predictable working hours, and jobs that require skills rather than manual labor.
In Jordan, the creation or the expansion of a new segment in
the labor market is done without any serious study of the economic or social
impact. And while economic reform efforts under the purview of the IMF have
focused on removing distortions (segmentation) in the tax system, discord and
mayhem in the labor market continues unabated through distortionary
segmentation policies.
In fact, a former minister of labor boasted (as have others)
that by closing certain professions to foreign workers he was creating jobs for
Jordanians, which was a bogus claim at many levels, as unemployment continued
to rise even after.
It is not necessarily true that Jordanians would want to or
are able to replace the guest workers in some of the closed segments. Research
has shown that Jordanians seek working conditions that provide regular and
timely payment, compensation for overtime work, predictable working hours, and
jobs that require skills rather than manual labor.
Impromptu closure of sectors makes it difficult for
employers to guarantee one-year, full-time work contracts for foreign workers,
which encourages the growth of the informal sector.
A formally segmented market makes it difficult for labor to
move across markets, and thus increases the cost and reduces the productivity
of labor. Segmentation by driving away guest workers from certain professions
also leads to increasing costs for producers at a time when the high costs of
energy, high interest rates, transportation and taxes (direct and indirect)
stifled businesses in Jordan and chipped away at their competitiveness — the loss
of around 3,000 industrial companies in three years is ample testimony to this.
“Insanity: doing the same thing over and over again and
expecting different results,” Einstein once said, Labor market policies have
been unchanged for decades, and the unemployment rates have not ebbed. but
increased to previously unseen heights. Is it not time to change the thinking?
The writer is CEO of the Envision Consulting Group and former minister of state for economic affairs.
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