Saturday, 7 February 2009

Twin Brothers

7th February 2009
The Malta Independent on Sunday

John and Joseph Borg are twin brothers in their early fifties and both have accumulated a quarter century of working experience in their respective jobs.

They have kept their strong twin brotherly bond even after their parents passed away and their families are like one big family that share experiences and get through life together wherever possible. Their children attended the same schools, moved in the same circles, and quite often enjoy life together sharing their free time and often travelling abroad together.

Their residences are on the same plot and quite often the brothers help each other with maintenance and with whatever home improvements are demanded by the new exigencies of growing up, maturing and ageing. They have been lucky in that their respective wives get along together like sisters; in short their families are there for each other through thick and thin.

John has been working at the shipyards for more than 27 years, moving from apprenticeship to fully licensed tradesman and had reached the grade of chargeman when finally, after refusing many early retirement schemes offers along the years, he was forced last year to finally accept the cash bonus offered to retire voluntarily as part of the process for privatisation of the shipyards. He has already collected his substantial redundancy payment, stashed it away as part of his eventual retirement investment plan and so far he is still earning his salary from the shipyards, which have kept him on board to service the contracts in hand. He has already found a job as a maintenance technician with a private firm, so far being paid on an hourly basis. Eventually, he will have to decide whether to work in this new place full time or whether the new owners of the shipyards will offer him his old job back.

At 51 he feels he is too young to retire and once he settles in his new employment, he means to start investing part of his retirement funds, enriched by the recent generous redundancy payment received for continuing in the same job (so far), to buy into real estate at the more sensible prices now in the markets, purchasing a couple of shell apartments and doing all the necessary work to bring them to finished state in his spare time. Hopefully, they will be rented out, thus providing both regular income and long-term capital accretion better than any financial investments he finds hard to understand.

Joseph has been working for more than 25 years at ST. His experience has been very job specific and if he happens to be one of the 450 employees that ST will declare redundant, he will find it hard at his age to carry the knowledge gained in his job to a new employment.

Joseph believes that ST has been a very good employer, providing him with a good salary and benefits. He always felt part of a successful team with management informing them that efficiency levels at the Malta plant were among the best in the world and seeing ST renewing its investments to keep at the cutting edge of technology. Joseph always felt proud when his employer invested in his regular training and never in a million years did he think it possible that circumstances could arise where ST would be forced to cut down its work force.

Joseph knows that the unions are in a rather weak position to negotiate a fair redundancy package, beyond the meagre provisions of the law. He fears that both the government and the union would be more interested in securing the jobs of those who remain in employment rather than secure benefits for those who are discharged. He knows that at this delicate stage, where it feels as if the world economy has suddenly shifted from growth to recession at the flick of a switch, any undue pressure in favour of redundancy benefits would probably quicken the pace of relocation of ST’s operations bringing about more redundancies.

On a per capita basis, Joseph along with his colleagues at ST, has for the last 25 years been contributing to national economic progress more than most other workers, certainly more than the workers at the shipyards where his twin brother works. By any measure, whether value added per employee or exports per employee, Joseph has contributed to the national GDP multiple times more than his brother and without ever making any claims for State support, as his brother’s employer organisation has consistently done.

Who is going to explain to Joseph now that the Maltese nation could afford to be generous with its least productive employees but there is no assurance, indeed no likelihood, that similar treatment will be reserved for its most productive employees who are being forced into redundancy by the exogenous forces of globalisation and certainly not by any internal inefficiencies or lack of productivity?

This is the apartheid we have built in our labour market. We have turned the simplest of management policies on its head. We reward the least productive and punish the over-performers. Instead of taking care of our best and ensuring that they can move from job to job without pain, we have kept them fully exposed to the risks of globalisation. On the other hand, we have given expensive overprotection to those who, without exposure to the pressures of globalisation, have never been able to reach the level of efficiency as that achieved by employees such as those at ST.

Before we solve this riddle the country can never reach its full economic potential and we will continue performing below par. And whoever performs below par even when the going is good cannot expect to be spared when the harsh economic winds of international recession starts blowing from all directions. The government remains in a state of denial, that we are going to be hit hard and that our economic performance could even turn negative this year. It takes one bad summer tourist season and one ST with a shrinking order book to push us over from growth to recession. And the die seems cast while the government has been doodling.

The private sector needs help by the creation of subsidised training pools where they can shed labour resources which have been rendered idle by the falling order book but keeping such employees on tap for reinstatement as soon as the economic fortunes turn, as we hope they will later this year, as the mega monetary and fiscal policy measures being taken by world governments start taking effect.

We must ensure that ST’s misfortune is a short bracket on a long ascending trajectory and not the first in a series of downsizing leading to eventual total relocation. ST’s case cannot be considered as a healthy exercise of creative destruction when it is our technology flagship and we are basing our economic future on becoming a technological centre of excellence.

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