Flat economy blamed for rise in retrenchments

Both business and labour lamented a lack of activity in the TT economy, speaking to Newsday on Sunday about a recent jump in job losses.

Gabriel Faria, TT Chamber of Industry and Commerce CEO, saw many possible reasons for a 27 per cent jump in retrenchment over the past year as stated in last Friday’s Monetary Policy Announcement by the Central Bank.

He saw high labour costs coupled with low productivity, but also blamed hard times being seen by some businesses. “I’m aware what is happening. It speaks to a number of issues.”

Faria said, “In the current environment, businesses can’t subsidise operations that are not globally competitive or maintain operations where consumer demand might not be consistent.

“Some businesses have made the decision to pull back. The economy grew but consumer demand has been flat so businesses are making this hard decision.”

Faria said it is clear that most businesses including automotive sales have not seen any turn in the economy, despite the Central Bank reporting more natural gas production. “That (gas boost) sits on a different level to the man in the street.”

He said supermarket owners have told him people were buying less than before. “It is the reality of an economy that has been flat at consumer level for the past four years. Most businesses said Christmas was relatively flat, with some pick up in the last week.” He said businesses like Unilever will make decisions that are right for themselves and their shareholders, in a global environment.

“In a high labour-cost environment, the cost to produce in TT is high. Cost is relative, as you can have high cost yet also have a high efficiency, but TT is not known as having high productivity.”

Faria viewed retrenchment against the need for businesses to be competitive in a global environment. “Many businesses make decisions because they are in a high labour cost environment and have challenges with efficiency and productivity.” He said if the economy were growing, businesses could subsidise the unprofitable areas of their operations until better days, but cannot do so in this present environment. Now, due to the flat economy and high labour costs, businesses have had to make hard decisions, leading to retrenchment, he said.

Faria hoped more public agencies would follow Trade Minister Paula Gopee-Scoon’s lead in being facilitative to businesses.

Clyde Elder, Communication Workers Union head, was not surprised by the announcement of retrenchment but only by how long it had taken to release those figures. He said the data originated at the Labour Ministry which he said was late and out of touch with reality. “We have seen that since last year, with TSTT, Petrotrin, Tourism Development Company, GISL, Caroni Green and a whole lot more. There seems to be no end in sight to the slew of retrenchment.” Saying Ansa McAl had recently announced a restructuring, he reckoned this would entail retrenchment. “When will it end? There is nothing happening in the economy to see jobs are created. The Keith Rowley Government has to take the blame. They’ve got no plan. All we hear about is Vision 2030 and that is ten years away.” Elder said the Government is not ready to lead TT for another five years, but also said the former People’s Partnership had also blown its opportunities despite also coming into office with the labour movement’s help.

Despite being in this difficult period, the labour movement has not given up hope, and wants new jobs to be created. Elder said. “We are approaching things differently. For example, who would ever have thought the OWTU would bid for a refinery and be chosen? So 2020 brings renewed hope and renewed visions.”

David Abdulah, former trade union leader and MSJ head, reckoned the Central Bank retrenchment figures were actually an understatement of the actual numbers of people put out of jobs in the past 12 months. "In smaller companies many persons have lost jobs where there is no reporting requirement to the Ministry of Labour under the Retrenchment and Severance Benefits Act," he said.

"It is really as a result of the policies of austerity implemented by the Government and supported by big local capital and foreign capital, which policies are resulting in more and more inequality.

"So even as companies have reported increased profits to their shareholders and I am sure company CEOs have paid themselves larger and larger bonuses, more and more people are without a job and are suffering. That is wrong. Both the PNM and UNC have supported the austerity policies of neo-liberal economics but the MSJ opposes that which is why we continue to fight for social justice and equity." He reckoned Ansa Mc Al and Agostini will send home workers but asked whether the heads of these companies have taken any reduction in their living standards.