Opinion: Participation

POSTED: 01/15/13 12:59 PM

Curacao intends to put its doomed 80/20-rule into practice – obliging companies to have at least 80 percent locals on their staff. It is the surefire way to increased unemployment for the very people politicians think they are going to protect this way. It’s not something the economy is waiting for – not in Curacao and absolutely not in St. Maarten either. We’ll get back to this in a minute.

In the Netherlands the government also has designed a positive discrimination law. This one is designed to help handicapped people find employment. Like with the 80/20-rule, the intentions are good. The so-called participation law obliges Dutch companies with at least 25 employees to have 5 percent handicapped workers on the payroll. That’s 1.25 workers for every 25 employees.

Kees Cools, a professor in business economics and Nelleke Cools, an adviser for strategic communication write in an opinion piece in Trouw that a quota-system comes down to rigid coercion. They note that economic research has established that coercion, for instance in the form of rigid rules, leads to lower performance.

As an example they refer to a company in Delft that produces household appliances. In one production hall 160 handicapped people from a social workshop find employment. They begin every weekday at a quarter past seven and they get paid per piece they produce. If the company has to place these 160 workers on its payroll, it will increase production cost. That way the company will price its products out of the market, so it will lead to dismissals.

But coercion also leads to hanky-panky, the authors note. Companies that are not used to work with handicapped people will start by looking through their payroll to find employees with minimal handicaps; they will explore the limits of the legislation and offer employment to workers with very light handicaps. Those with more serious handicaps will be left on the sidelines.

Only 5 percent of Dutch companies currently employ young handicapped workers under a law called Wajong. The authors furthermore point out that handicapped workers need supervision. That was available: 15 percent of the hours a handicapped employee works. But within three years that supervision (provided by an external organization) will be limited to 3 percent – 1 hour and 12 minutes on a 40-hour work week and proportionally less for those who work fewer hours.

Supervision is not only crucial for the integration of handicapped employees. It will also come into play it Curacao decided to rigidly enforce its 80/20-rule. The main reason why companies employ foreigners is because they are looking for expertise and skill. If they don’t find it on-island, they start shopping around elsewhere.

This does not mean that locals are unable to learn those skills or to acquire that expertise. That is again a matter of supervision, or, as the islands want, of working with counterparts.

It is easy to see that forcing companies to abide by such an 80/20-rule will lead to disaster, if not to Greek situations.

Under the old George Papandreou, the Socialist Party (Pasok) in Greece gave away jobs like they were candy to their voters for more than twenty years. It resulted in a bloated civil service payroll and in a system wherein it was hard to find somebody who actually knew what he or she was doing. The system bankrupted the country, the way Curacao’s system will bankrupt its economy.

There is nothing against creating employment opportunities for the local population. On the contrary, this is a mission every government ought to take to heart. But the approach has to be smart, and it has to be geared towards taking those locals to the next level.

A good system would be to give preferential treatment to locals if their skills match those of a foreign candidate. But skill, not place of birth has to be the leading argument.

If companies are forced to hire employees based on the fact that they were born in a certain place, productivity is guaranteed to go down and in the end companies will go out of business. Smart companies may not even wait that long: they will take their business elsewhere. Altogether, this will result in fewer jobs and in more unemployment. Exactly what politicians do not want – or so they say.

 

 

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Comments (2)

 

  1. dakota says:

    well it gives the local a chance to work if you look now what is happening in Aruba all the minimarkets and average size supermarkets are chinese and they employ only chinese. how is this possible? somehow they keep filtering in to the system. in sxm all the stores are indian owned and most have majority indian workers. at least Korsow is trying to curb this problem.

  2. Brown,J says:

    Wednesday, January 16th 2013/03:37
    With respect, this is the most patronizing and selfserving
    article I have come across. Comparing the locals to hanidacapped people. Fysical handicap as you are probably referring to in your example does not mean that
    there is also a mental handicap. I quote
    “”There is nothing against creating employment opportunities for the local population”” When seeking to make a point please consider the intelligence of your
    readers before choosing an example to clarify your point
    you will then do justice to both yourself and your readers
    who you want to convince, or else you put yourself in the same category you are now critisizing for their lack of
    comparable knowledge to the foreignor and I bet anything that you are referring to our European counterparts in which continent the majority of St.Maarten’s students have to apply to and comply with
    for further education in a language that is not their daily
    own. The effort on their part is remarkable till now. Sir,/Madam please consider this in your future observations/opinions and take notice of the number of years the relationship( of having to seek education away from home) has taken place.
    Regards, J. Brown, The Netherlands.

    Editor’s Note:
    The article wasn’t about handicapped people but more so about the forced character of both regulations