Notes From The Margin

March 18, 2008

Welcome to the 5 year long election campaign!

When the dust settled on January 16th the two parties ended up being quite far apart on number of seats but actually quite close on total number of votes cast. With only an 8% difference in terms of total votes, it means that the current government is vulnerable to a 4% swing. This means that despite a comfortable majority in Parliament, the Thompson administration must politically plan from now with an eye to elections in 2013. It also means that the Mottley opposition is already keeping an eye on that year.

As a result of this we are likely to see Mr. Thompson trying to attack what has long been perceived as the BLP’s strongest point; it’s management of the economy. The BLP for it’s part will pick at every flaw in the government’s actions.

This leads to the  ludicrousness of things such as Government suddenly becoming skeptical about unemployment statistics despite never having said a word about it before or during the campaign. It certainly was not a part of their platform. They are not releasing those figures because it will reinformce the BLP’s perception of good governance.

For the BLP’s part, this whole “We don’t know why the government won’t work with our consultants” is laughable. They damn well know why and they would do the same if they were in office as well.

What it amounts to is that we are in for a five year long election campaign, with the cut and thrust of January continuing at a lower intensity until 2013

Strap yourselves in, it’s going to be a wild ride!

Marginal

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February 23, 2008

Once Again Stn. Sargeant Reid We Disagree!

One of the more disturbing stories in the media this week comes from statements made by Station Sargeant Hartley Reid who is the First Vice President of Congress of Trade Unions and Staff Associations of Barbados (CTUSAB). We’re sure that Sargeant Reid is a committed individual who is passionate about his job and his Union affilliation, but these comments left us shaking our heads.

“The problem we have in Barbados is that not even half the workforce is unionised . . . . As low as 30 per cent of all workers are unionised, this is true.

“You could understand the struggles which the unions have in this country because they have 70 per cent of the workers who are benefiting from the subscriptions and the work of only 30 per cent,” first vice-president of the 14-member Congress of Trade Unions and Staff Associations of Barbados (CTUSAB), Station Sergeant Hartley Reid, said in an interview.

“I am happy that this issue has come to the fore at this early stage of the new Democratic Labour Party administration because they will now have to take a position on unionisation and the rights of the workers.

“I have long called for legislation which says that every worker should be unionised. There is a reason for it. When a worker is not unionised you have a situation
where the employers take advantage.

“They are offered whatever salary there is and the workers have no recourse. Workers are exploited left, right, and centre; late payment of their salary or
wages; shifting of their employment conditions; sometimes they have no conditions at all,” he said.

The CTUSAB vice-president argued that with “all the anti-worker practices by unscrupulous employers” any legislation enacted by Government regarding mandatory signing up would mean that it would no longer be a requirement that “50 per cent plus one” of a company’s employees for the union to be recognised.

“It would mean that even if one person is unionised in employment that the union of their choice would come in and bargain on their behalf,” Reid said.

He said that this move would also strengthen the ombudsman’s role because he would be responsible for overseeing the operations of the trade unions.

“That can easily be done. Governments must stop hiding behind democracy, by stating every worker has a democratic right to be a member of a union or not. They are perpetuating a system where persons are continuing to live a parasitic life where they would benefit from the contributions and efforts of a few,”
he said.

We on the margin have to admit that we never thought we would see the day that a trade unionist would argue for doing away with Freedom of Association! The question that we would have to ask Sargeant Reid is as follows:

If all employers are as bad as he says in the above quote, why have trade unions not been as successful in attracting more members?

Now we aren’t denying that there are employers out there whose management practices date back to the plantation era, but surely if they were all as bad as this…

“They are offered whatever salary there is and the workers have no recourse. Workers are exploited left, right, and centre; late payment of their salary or
wages; shifting of their employment conditions; sometimes they have no conditions at all,” he said.

Then we would be seeing a much higher proportion of Unionization in the population.
Perhaps what is even more disturbing about the above statement is that it comes not just from a trade unionist but from a police officer. If this is the thinking of someone who is charged with safeguarding our democracy, perhaps we should all be concerned.
Marginal
For our earlier comments on Stn. Sargeant Reid see below:
With Respect Sargeant Reid… We Disagree

February 19, 2008

STRIKE OFF – Picking Up The Pieces….

At the eleventh hour the Barbados Workers Union deferred the strike action after taking the country to the brink of a National industrial action. Sir Roy Trottman, indicated that the action (or deferment of action) was taken due to the “newness of the current administration” . This dramatic climbdown came after a week of deadlocked talks, where both sides became more and more entrenched in their respective positions.

We on the Margin always felt that the Union had painted itself into a corner by reaching for the “big gun” prematurely. The lateness of this climb down also has several knock on effects that may be more long lasting.

American Airlines cancelled flights today and tomorrow into Barbados, stranding some Bajans in Puerto Rico. It is not clear how many tourists this has affected.

Cruise ship handlers had indicated that in the event of a strike the cruise ships scheduled for Barbados calls on Wednesday would divert to other nearby ports.  At the time of writing, it is unclear if they have diverted or if they will make their regularly scheduled call.

Certainly in looking at our WordPress data we can see that much of the traffic we have picked up is be people looking for informaition on strikes. We believe that many of these queries originate outside of Barbados and we have to wonder if the uncertainty will result in potential tourism business going elsewhere.

In short, even though the strike action is off, we on the Margin are deeply concerned about the impact the strike will have. We are concerned that this matter was allowed to develop to this stage and was not resolved earlier. Even though we may have dodged the strike we still stand to be affected.

This whole sorry episode will do nothing to enhance the reputation of the Union, or the new administration for that matter, who we think should have intervened in some form far earlier than they did.

We can only hope that this issue (which is still ongoing) will now be resolved in an amicable fashion.

Marginal

BREAKING NEWS – Strike Off – Union Backs Down

“Due to the newness of the government” BWU defers the pending strike action. However talks continue.

We’ll publish more details as we get them.

Marginal

February 18, 2008

Down to the wire….

A national strike does seem to be about to happen in Barbados, (barring a last minute settlement by the intervention of the  Prime Minister) In both cases of dispute (Sandy Lane and the Royal Shop) no one seems to be shifting their position. The intervention of the Chief Labour Officer does not seem to have moved the disputes closer to any form of resolution and that leaves only one other arbitrator available the Minister and Prime Minister David Thompson.

 

 

 The entrenched nature of the positions was highlighted by a story in today’s Nation which highlighted comments by Sir Leroy Trottman:

Sir Roy added: “Why could they not have said before, that it is indecent to fire these numbers of people for what is an everyday occurrence in this country, which the BWU helps to resolve in a matter of hours, but always in less than a day.

The Union’s position is an absolute, they are pressing for full reinstatement of all the workers in both cases. The mood in the private sector is considerably at variance with that expressed by Sir Roy. The BHTA has thrown it’s full support behind Sandy Lane, who seems to have taken the position that can be summed up in saying that if the workers do not honour the collective agreement in place there are consequences.
While Sir Roy may consider wildcat strikes to be an “everyday occurrence” to an employer a wildcat strike is incredibly disruptive and costly. One of the reasons for entering into a collective relationship is to ensure the incidence of strikes is minimised.
In the case of the Royal Shop, there appears to be a hardened resolve NOT to rehire the workers. The company is offering full severance, but is not budging on its position.
To us here on the margin, it appears that the Union may have erred tactically in going for a general strike. The Royal Shop and Sandy Lane may both take the position that the Union will suffer more loss of good will than they will if the strike goes ahead. Indeed, for Royal Shop a national strike will hardly make a difference to their current situation.
To stretch a metaphor we used in an earlier post; national strikes are like atom bombs, they are great weapons to threaten with, but actually using them makes both combatants losers.
It is unfortunate, but it would seem that we are about to see that played out before us.
Marginal

 

February 17, 2008

Does Barbados Need An Industrial Court?

I run a small business (approx. 10 employees) if this general strike comes off next week it will cost me a significant amount of money. I have no part in this BWU/Royal Shop/Sandy Lane, and yet I will suffer a direct economic consequence of what is a Union action! In theory the Union must carry some civil liability for this cost, but in reality there is no way that I can recover this cost.

Why should I (along with everyone else) be penalised for one company’s perceived intransigence? The threat of a general strike is irresponsible and shows why we need to have an industrial court in this country.

Small Business Owner

Above is a comment by a small business owner and he asks what in our opinion is a valid question.

Historically industrial relations in Barbados has relied on a system of volunteerism. That is that collective agreements aren’t actually legal contracts but are considered to be more along the lines of “gentlemen’s agreements”; that is that either side can breach the agreement at will. Collective agreements are usually enforced by the relative power of the union and the business owner. Now here’s the funny thing… as INSANE as this system may sound, in Barbados it has actually worked! While industrial courts are well established throughout rest of the Caribbean, we in Barbados continue to function on a volunteerism basis, and have had a relatively stable IR climate for a long period of time. ‘

Now of course there are certain features of the Barbados system that make this workable, you have a very small number of very large powerful unions, and you also have a relatively homogeneous private sector. This has meant that historically, everyone knew the rules and how the game was played and everyone was prepared to give and take to make the overall system work.

Now in 2008 we still have a small number of large unions, however the private sector is no longer as monolithic as it was in the past. We have new international investors, we have regional investors, we have relatively new local players. In short we have people who are accustomed to functioning a more “rules based” industrial relations culture. They don’t know how we play the game “’bout here”

This of course leads to all sorts of complications, issues of recognition, issues of wildcat strikes. The Sandy Lane Showdown is a prime example of this. Is there a penalty for workers breaching the collective agreement? Where historically local employers have accepted the occasional wildcat strike as par for the course, someone accustomed to an environment where collective agreements are contracts will expect to be able to terminate wildcat strikers for “abandoning the job”.

Issues such as this will continue to come up. So we on the margin ask the question

Is it time that we retired the volunteerism system?

Do we now NEED an industrial court?

We think it deserves serious consideration.

Marginal

February 14, 2008

The Royal Rumble…..

Well after simmering for a few weeks the Royal Shop Vs. Barbados Workers Union is beginning to bubble. On the one hand the owner of the Royal Shop insists it is a straightforward case of a worker refusing to follow a reasonable instruction on the other hand the BWU is maintaining that the worker in question was fired for trying to organise the Royal Shop workforce.

The drama has rolled on through several acts, with allegations of untruths and insults being thrown around, the parties have met several times and there has been no shifting of positions. The latest salvo in the firestorm has the union reaching for perhaps its biggest gun, that of a national strike.

Now the Union actually doesn’t have many cards to play against the Royal Shop, there is no other unionised workforce there that it can call out, so it can’t stop the store from working. Further because of the smallness of the operation it can be run by literally a few people, so in a worst case scenario the owner can run it with friends and family. The stock of the store is high value, and brought in by individual courier so the union can’t say it’s not handling cargo consigned to the Royal Shop at the port. The shop’s main customers are tourists so it’s business is unlikely to suffer from a withdrawal of custom from Barbadian customers. That leaves the Union pretty much in the position of having to use the labour relations equivalent of an atom bomb to squash the proverbial cockroach.

However the Union should exercise some care with the idea of a national strike, while Bajans will support the idea of freedom of association in theory and in practice while it costs them nothing, the Union may well find that their support wavers if it suddenly starts becoming personally inconvenient to the average man in the street.

A national strike is in no one’s best interest, we on the margin would urge both sides to return to the bargaining table and let cool heads prevail.

Marginal

January 31, 2008

Economic Advice From Prof. Howard

Local Economist Prof. Michael Howard who has become a regular commentator on Government’s economic policies today wrote an guest column in the daily Nation offering his views on the way forward for Prime Minister Thompson’s government and Owen Arthur’s stewardship.

His comments on former PM’s Arthur are interesting:

Whether he knew it or not, Arthur was also influenced by Rostow’s misleading “catch-up” notion of Barbados becoming a “developed country”. We may have already reached there since we are now in Rostow’s stage of “high mass consumption”.

Arthur’s expansionary policies eventually led to “overheating” of the Barbadian economy. Overheating was caused by heavy expenditure on the World Cup, the bunching of lumpy capital projects, and high levels of conspicuous consumption. The positive aspects of overheating were increased employment and economic growth.

The Barbados model has now reached a critical turning point where serious decisions have to be made to reduce high levels of spending, maintain capital controls, and curb illegal immigration. Without capital controls the exchange rate will come under significant pressure, as the economy faces a possible recession.

( If you want a quick overview of Rostow’s Theory click HERE.)

The point on the removal of capital controls we have spoken about on the margin already. It does seem to be a judgement call. As we said in our post “Capital Account Liberalisation – Good or Bad? ” it seems that no one REALLY knows what will happen when capital controls come off. Prof. Howards view that the world economic situation is less favourable MAY be right.

Interestingly his other points include tax policy:

It’s likely that it may happen in a cosmetically changed format and Thompson may claim that it was his idea! Arthur’s tax policy seemed logical to us on the margin, and it favoured gradual incremental change over a period of years rather than sharp adjustments. In lowering the income tax rate he was able to address the issues with the NIS pension fund without the population feeling poorer. With his policies he began moving the economy away from income taxes which inhibit investment and towards VAT. Arthur had indicated publicly on more than one occasion that he considered moving to one tax rate for both onshore and offshore sectors to be desirable.
On the issue of VAT Prof. Howard had this to say.
We on the margin agree with the professor on this point, and are concerned that once exceptions are made to the VAT tax, it becomes easier to make further exceptions. “You zero rated sports equipment so why not this?” Also the more zero ratings the more loopholes there are for abuse. (Are rally cars sports equipment? How about clothes to train in?) The objective is socially laudable, but we believe that the Government should find another way of achieving it.
 .
We aren’t sure that we agree with Prof. Howard on one of his later points on the cost of living.

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“Reliance on imported food is a major cause of the high cost of living in Barbados.”
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We believe this argument ignores the fact that (1) Many of the input into local agriculture are imported, (2) Much of the imported food is so subsidized that it lands at costs BELOW the cost of local production. While the lack of competition in the distributive sector is definitely a factor it is in our view simplistic to view them as a major part of the problem of local agriculture withering, without a full examination of ALL of the factors involved.
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That said we are happy to see input from some of the best brains “On The Hill”. Barbados is at a stage of it’s development where precious few countries have gone before. Input such as Prof. Howard’s is invaluable in helping both policymakers and the public understand the issues of the day.
Marginal

January 22, 2008

Our Thoughts On The Cabinet

PM Thompson showed the first inkling of his plans for the new term by naming a cabinet which is bolstered by some of the brightest brains in the island. We on the margin are particularly pleased to see Darcy Boyce being named to the cabinet as his skill set fills the most obvious hole in the qualifications of the elected cabinet.

Another interesting move was divorcing the International Transport ministry from the Tourism ministry and placing back with Transport and Works. The previous BLP administration had considered international transport to be the handmaiden of tourism with a focus on attracting new airlift. It will be interesting to see what new direction this brings.

International Trade, Foreign Affairs, and International Business have been joined under one Minister and one Junior minister. While we can understand the linkage, given the importance of International Business to the economy, we would have been more comfortable with it being given the exclusive focus of one minister. However we will have to see what results this brings.

Perhaps the most surprising omission was that of a Deputy Prime Minister while we have seen comments on Barbados Underground that the post exists only in tradition (let’s be clear it was the opinion of a commenter not David or one of the BU family) we on the margin view the post as having considerable importance. The Deputy Prime Minister runs the country in the absence of the PM. This is true when the PM travels or (God Forbid) becomes incapacitated or dies in office. It would be easy to dismiss the latter scenario as unlikely except for the fact that it has happened twice already.

However apart from the above comments we think that Mr. Thompson’s first cabinet appears to be a credible, well thought out team. The most obvious weakness has been adequately supported and it is clear that he has put his best brains in charge of the key ministries.

We wait to see what changes in policy will come from this new configuration.

Marginal

January 10, 2008

Politicians, It’s One Week Before Elections, Do You Know Where Your Vote Is?

With one week left to go before elections, Barbados is in the grips of one of the most intense election campaigns in recent memory. The two parties’ campaigns appear to be evenly matched, and evenly funded, and to a certain extent evenly supported. We on the Margin have been watching the silly season unfold in all its glory, and we have to admit we are unable to predict a winner at this stage.

Yes, if you listen to Waiting In Vain and Royal Rumble and the other party hacks that inhabit the blogosphere, they all predict a resounding victory for their particular party. But having spent the last week talking to many people, we think that both parties are “Whistling past the graveyard”. For as much bluster as either side makes we’re not sure that either of them has captured the hearts of the electorate.  Barbadians are looking at both parties with a skeptical eye and the hard truth is that this election could go either way.

What we have noted that this campaign has been more about accusations and counter accusations rather than issues. We would like to see some serious discussion about both parties’ visions for the next five years. While we wish that we could say that we thought we would get such reasoned debate in the next next week, we really don’t think so. We think that this next week will get wilder and dirtier with each passing day.

We on the margin would urge Barbadians,  think long and hard about both parties before you go into the polling booth. Whoever you choose is entirely up to you, but be sure to participate, be sure to cast your x. Be sure to treat that decision with the seriousness it deserves.  Hopefully we will all be better off for your doing so.

Marginal

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