Opinion: Flexible labor market

POSTED: 02/14/13 12:46 PM

There was a time when a workweek of 48 hours was pretty much standard. That was in the time that children still went to school on Saturdays. But with the introduction of the 5-day work week the numbers dropped to 40 and kids got an extra day off on Saturday. Okay, so those days are gone. Here and there countries have nibbled on those 40 hours and gradually brought them down to 35.

And now there is the trek of Asian companies to Eastern Europe where they, as was to be expected, are introducing Asian labor practices. Somo, a foundation that researches multinationals, took a closer look at four of these companies in Hungary: Samsung, Flextronics, Foxcomm and the finish company Nokia.

The results of this survey are not pretty: employees in these companies have to work 12-hour shifts and they have to go on vacation when the employers want them to.

Hungary is the most important electronics producer for cell phones in Europe. The investment climate is favorable to companies but the flexible labor market is the cream on the cake. A labor law called time bank makes it possible for companies to endlessly vary the length of the working day.

At peak moments, for instance before Christmas, employees can be ordered to work 12 hours a day, 60 hours a week. The extra hours are compensated during less busy periods with shorter working hours or obligatory vacations. The advantage for companies is that they become less dependent on temp workers. But older employees complain that the long days, which they often spend standing behind a machine, are too much.

Not everybody is dissatisfied with this system though. After three full shifts workers are three days off, something that appeals to young employees. But in the long run, the system has a devastating effect on people’s health.

A good thing that we don’t have electronics producers in St. Maarten, so we won’t easily encounter companies here with a need for such brutal schedules. But what happens in Hungary, may in the long run have its effect on labor relationships elsewhere. Think about the already flexible labor market: Hungary wants to make it even more flexible.

Previously the unions had to agree with flexible working hours. Now the Hungarian Parliament has approved legislation that gives employers the freedom to make individual agreements with employees, while the rights of the unions have been limited. A company-appointed council suffices these days as the representative of the employees.

Companies are no longer obliged to keep paying salaries when machines stop working due to power cuts, it is possible to fire employees that fall ill and those who do not perform will risk losing up to four months of their salary. Maximum overtime went from 200 to 300 hours per year.

And it’s not like the Hungarians are not working. On average they work already 1,959 hours per year – 230 hours more than an employee in Japan. After the Greeks, the Hungarians have the longest working hours in Europe.

Compare this to the labor markets in Curacao and St. Maarten that seem to be set for becoming increasingly inflexible. The disastrous 80-20 rule in Curacao for instance that obliges companies to hire at least 80 percent locals, will stifle the islands economy. In St. Maarten the labor market is bogged down by a needlessly complicated work permit system that is driving employers up the wall. Ah well, moving to Hungary does not seem to be an option for most companies here.

Did you like this? Share it:
Opinion: Flexible labor market by

Comments are closed.