Somebody tame the employers’ appetite for layoffs, pay cuts

Hard data on the layoffs, salary cuts and furloughs that companies have implemented as they continue to respond to the impact of Covid-19 are still hard to come by.

We have neither unemployment benefits nor a system of safety nets that can enable us to track trends on job losses and pay cuts implemented by companies in real time.

But what can be discerned from anecdotal evidence is that pandemic-induced layoffs, pay cuts and furloughs have become the order of the day in this economy.

Critical voices are beginning to question whether the pay cuts and layoffs are inevitable or companies are merely using the pandemic as an excuse to throw workers into the streets.

I recently read an article in the Washington Post that articulated the contradiction in the fact that big companies in the United States still paid their shareholders handsome dividends even as they continued to implement pay cuts, layoffs and furloughs.

REWARDING SHAREHOLDERS

Media reported that they were rewarding their shareholders with millions of dollars in cash despite the fact that thousands of workers continue to file for unemployment benefits.

However, I am yet to come across facts that show our listed companies are shipping out billions to shareholders while causing workers to bear the brunt of the pandemic.

Profits should be shared with workers, who actually are the ones who create the wealth. I don’t believe that jobs must be protected at all costs. Jobs must, first and foremost, be productive.

Yet there is a sense in which contemporary society in Kenya no longer questions or reacts angrily to job losses. Which is why, even as the coronavirus tightens its grip on the living standards of the ordinary worker, the only thing you are likely to see is fired workers being advised by the usual suspects in the therapy industry.

In the past, individuals thrown out of work or forced to take pay cuts would resist. Today, they receive advice on how to cope with their misery.

I don’t support controlled labour markets. Until 1994, employers wishing to declare redundancy had to seek the authority and approval of what used to be the immensely powerful Office of the Commissioner of Labour. Employers had to send audited accounts to the commissioner and present the evidence justifying the intended job cuts.

LIBERALISED EVERYTHING

We liberalised everything during the transition from the ancient regime and command and control. Yet, the impression you get today is that employers will jump at every opportunity to implement pay cuts or staff retrenchment, behaving as if staff reduction and pay cuts were the only remedies to their financial difficulties.

Our corporates seem to have prioritised paying dividends to shareholders over the welfare of their workers.

The most telling deficiency of policymaking in this country is failure to register the singular importance of work and jobs. Any policy document you come across will acknowledge the problem. At every opportunity, the determination by the government to solve the joblessness problem will be proclaimed.

Yet the government lacks even rudimentary capacity to register the number of pay cuts and job losses by employers on a real time basis.

I found it surprising, indeed, that one of the conditions put by the Competition Authority of Kenya for the proposed merger between Telkom Kenya and Airtel is that jobs must be protected.

We are in a situation where even the public sector is eager to send people home. In the past, a job in a parastatal such as the defunct Kenya Posts and Telecommunications, the old Kenya Railways Corporation and the defunct East Africa Cargo Handling Company, were a sinecure for life.

LAST RESORT

Indeed, the public sector in this country was the employer of last resort. These sources of decent jobs with benefits such as housing, medical cove and pensions evaporated into thin air during the liberation years.

In theory, an employee forced to take a pay cut can go to the High Court to seek redress. But most of them choose to go home quietly instead of spending their meagre savings on protracted litigation.

Right now, the trends I see in the new media industry are worrisome. Literally, all news media companies are struggling. We are confronted by widespread financial distress across all major media companies. Which begs the question: Considering the role the media plays in promoting democracy, is it proper for us to have widespread financial distress within media companies?

If we want strong vibrant media, it is, perhaps, time we started to debate the appropriate policy responses to the economic challenges of the news as the country goes through the pandemic.

Financially weak media companies are a risk to the health of our democracy.

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