Open up the job market to survive

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We haven’t yet clocked how quickly technological change will hit us. Software makes appointments, generates presentations, diagnoses illnesses, predicts your e-mails and guides machine hands.

It has hit the rich world. You can ask those who couldn’t adapt. Jobless, hopeless opioid addicts teem the American rust belt.

The Caribbean has been slower to adopt new technology. These changes still seem fuzzy on the horizon. But they are on their way.

How will we meet this greatest upheaval of our time? We have two paths.

The first path, and the first instinct, is to hunker down and protect jobs.

We still have the powerful instruments of government and the law. That law, with its awesome power, can reach into the world of work and prevent companies and technology from making positions redundant.

The law, as some have suggested, might force a company that creates a new position to re-hire old workers made redundant. It might force companies to retrench newer employees over senior ones (“last in, first out”), even if those newer staff are the ones with the skills that the business actually needs. It might ensure that even the most briefly-employed contractor can claim for severance. It could even make all these changes retroactive.

At first glance, this last-ditch effort to preserve livelihoods seems right. These policies are driven by sound motives, after all. But they are a small dam against a great river. That dam provides a small sense of comfort for the village beneath. Secure in that sense of safety, the villagers won’t bother to abandon their houses, or build newer ones on higher land. But the river of change is huge and its progress inevitable. It will break the levee and drown everyone beneath.

Eventually, companies will have no choice but to cut workers who will then be totally unprepared for newly relevant jobs. Adaptation is not only the necessary but the compassionate path.

Our work consumes a large part of our lives. Many are trapped in jobs which we hate. Many more are trapped in a dull torpor of repetition overlaying an undercurrent of discontent. This is particularly true of the young and ambitious.

But right now, there are few opportunities for the dissatisfied, restless or jobless.

The problem is that current labour laws make it difficult for companies to retrench staff. Retrenchment may be painful, but it paves the way for the creation of new and meaningful opportunities. Our laws slow and impede that process. The World Economic Forum ranks our hiring and firing practices 106th in the world. It ranks internal labour mobility 94th.

Over the years we have tried to throw up a dam against change.

That has come at too high a human cost. Companies have retained zombie positions because the cost of retrenchment is too high. The people doing those jobs are deprived of a sense of fulfilment but feel forced to stay because there are so few opportunities elsewhere. It is a dispiriting cycle. Outside, many more are shut out from new jobs; with neither fulfilment nor pay cheque.

The costs and complexity of hiring and firing also makes companies uncertain. They delay or stop investing. This arrests growth.

But there is another path: embrace change.

We can first redefine what it means for a job to be redundant: and stop trying to restrict that definition. If a business no longer requires a role to be performed; if the need for that role is shrinking by the day, then the business should be allowed to make the role redundant.

That is the UK’s position. Barbados, Jamaica and the Bahamas have adopted it wholesale.

Secondly, the government currently calculates severance benefits, mandating just over five months of salary. This should not be mandated by the state. Employers and employees should be able to negotiate this themselves. That is how the US does it. It is part of the reason they are still one of the most powerful and dynamic economies in the world.

Third, we should allow companies fighting for survival to temporarily lay off workers (though this should be for a sensible amount of time – no longer than three months). That can give straightened companies some breathing room and rescue jobs that otherwise would be gone for good.

Growth and evolution are the surest protection against the turbulence of change. The good news is that smart folks at the Ministry of Labour have recognised this and are more open than ever to reform. As the great Italian novelist Giuseppe di Lampedusa put it: “If we want things to stay as they are, things will have to change.”

Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh