Political parties in developed countries win elections when the electorate is convinced they will create jobs. Those in office lose elections when during their expiring term there has been a good deal of unemployment and more jobs have been lost than created.
As a country undergoes economic transformation from predominately agricultural to one with mixed economies of secondary and tertiary industries the job situation becomes a matter of grave concern both to an individual and to the State.
A job defines the status of a person in the community. Those with jobs are likely to have food, shelter and clothing. Those without jobs are likely to have problems with regard to these basic necessities of life. In times of dire necessity the surest way to alleviate a person’s poverty is to give him or her a job.
Jobs are created by governments, firms and the self-employed. In a democratic country the government is likely to create more jobs than the public service needs, sooner or later the salary budget balloons and is then in deficit. When the government approaches donors for assistance in the payment of civil service salaries usually the donors including the International Monetary Fund (IMF) and World Bank demand that the applicant for assistance should retrench the civil service as a condition for receiving the assistance.
The governmet of the United Democratic Front (UDF) which took office in 1994 had to comply with this conditionality. Many civil servants were laid off, though most of them went off with substantial compensations for redundancies. One only hopes a follow up was made on how the retrenched staff coped with life thereafter and how they used their money for planning purposes. Such information ought to be compiled from time to time. For those laid off it is not a matter of shauri yako it is up to him. It is up to those who run the affairs of the State as well.
In developing countries the State is the main employer though in the case of Malawi, most people are not in salaried or wage jobs. They work on the land or engage in small business.
In developed countries jobs are created by companies which employ thousands. Most governments of such countries have enacted legislation which restrains major corporations from readily laying off thousands of their employees. This is because the thousands who are laid off become a social problem. Some engage in crime in order to survive, others join organisation that are anti-government.
Dismissal of thousands of people usually follows a recessions in the economy. That is when business are failing to find customers for their products or services.
Sometimes, lowering a tariff lets in foreign products which snatch the market from the local company which lays off some of its employees. This is the reason that when government representatives discuss questions of promoting free trade, each government is anxious not to expose its companies to dumping goods. That is goods which are so priced as to give cut-throat competition to the local firm. Officials, economists and business people therefore, carefully scrutinise proposals about facilitating imports. Cheaper imports are welcomed by consumers but they may destroy jobs at the same time. This is one of the dilemmas in the free market system.
Another dilemma is encountered in giving employees adequate wages and creating jobs for the unemployed. When workers are organised into powerful trade unions usually they demand a minimum wage to enable them to buy the basic and conventional necessities. Such pressure is more persistent in times of inflation.
If the minimum pay granted is seen by employers as too high they will be reluctant to employ more workers. Instead, they may have to lay off some of the workers. The minimum wage has in this case caused job losses. The employer may retain all the employees especially where legislation penalises unwarranted laying off of workers. Instead the employer may raise prices of his products or services thereby contributing to cost push inflation. Life poses dilemmas all around and most of the time.
The ministries of labour and economic development should monitor problems small businesses face in the course of a creating a job or two. The taxes, the rents and the licences. Do these help or hinder?