Jamaica’s BIG 2017 Opportunity

Opportunities for the Government and Opposition – the Minimum Wage Act and reducing income inequality

Ahead of its 2016 Annual Meeting in Washington DC, the World Bank called for a new push to tackle inequality after warning that the gap between rich and poor risks thwarting its ambition of eliminating extreme poverty by 2030.

Of note, in a World Bank ranking of 141 countries, Jamaica is ranked at number 106, with only 35 countries more unequal than Jamaica.

working poor

The University of the West Indies economist Dr Andre Haughton argues that Jamaican government policy directs resources towards supporting firms rather than supporting households; this trickle-down approach is a source of inequality in Jamaica, so much so that over the years, up front and in your face Jamaican government policy has increased inequality, which suits those in power.

Nowadays Jamaica’s inequality seems normal, but only because we have got used to it, just like we have got used to our yearly 4th highest murder rate per capita in the world.

Jamaica’s inequality ranking shows clearly why we are where we are, a country on the edge of a cliff, with successive administrations doing very little to alleviate the conditions of those on minimum wage.

The review for an increase in the minimum wage [National Minimum Wage Act; National Minimum Wage Act (Industrial Security Guards)] is one of the greatest opportunities for the JLP government to show the poor in Jamaica, and the world at large, that we are serious about reducing this inequality. After all, when in opposition the now Minister of Finance had stated clearly that it would go to JMD$8,200 for a 40-hour week, representing a JMD$2000 per week uptick. NOTE, minimum wage was last raised at the beginning of 2016 and nearly 2 years later the people of Jamaica are still waiting. In the meantime everyone has seen and felt the increases in the cost of living. Not only that, but the Poverty Index stated that 21% of our people live below the poverty line [just over JMD$3,100.00 per week].

For this administration to accept the flawed [YES, they are flawed] recommendations of the minimum wage review committee for an increase of only JMD$434 per week [JMD$86.80 per day – not even one way bus fare], would demonstrate clearly their actual lack of caring/compassion for those on the minimum wage, and show a self-centred desire to ensure that they can continue to have their army of helpers, gardeners, nannies, cheap workers et al.

One of the JLP’s tactics at the last elections was the tax break [I will not discuss the “no new taxes” promise here]. At the end of the day the tax break actually benefited less than 300,000 [actual data shows 251,792] working people. Yet a just and fair increase in the minimum wage would benefit over 500,000 people easily, improving the lot of the marginalised in our split society.

money imageAnd for the PNP opposition? Your silence on what the review committee has proposed in the mainstream media is deafening. You need to wheel and come again, and do so quickly. Your history is the party of the poor, for the poor and with the poor. Your lack of public communication to date on the review and recommendation of a JMD$434 per week increase will effectively help to keep the people in poverty, those same people whose rights you claim to champion; thus you are supporting and perpetuating the income inequality that exists in Jamaica.

And before I hear that an increase of JMD$2000 per week in the national minimum wage will create unemployment, I state without hesitation or apology that this is a fallacy, regardless who you are – whether economist, financial guru, believer in market forces, supporter of state intervention, owner of a security company or a householder.

A fair & just increase in the minimum wage will create greater consumption, productivity and a boost in morale and self-worth. What it will also create is a slightly better off population, some who will be able to work 4 days a week instead of 5.

Raising the Minimum Wage Boosts the Economy
• Raising the minimum wage does not kill jobs. Leading US economists have found that increases in the minimum wage have no discernible effect on employment, including employment in high-impact sectors like restaurants and retail.
• Recent experience in US cities that have raised their minimum wages provides further support. San Francisco increased its tipped minimum wage to USD$12.25, before tips, and experienced positive job growth in the leisure and hospitality industry the following year.
• Raising the minimum wage increases consumer spending and boosts the economy. In the US a study by Doug Hall and David Cooper estimated that a USD$2.55 increase in the minimum wage would increase the earnings of low-wage workers by USD$40 billion and result in a significant increase in GDP and employment.
• A raise in the minimum wage predominantly benefits low-wage workers, precisely those most likely to put additional income directly back into the economy, kick starting a virtuous cycle of greater demand for goods and services, job growth, and increased productivity.

What does it mean?

For households, you may have to reduce your helper’s/gardener’s/nanny’s hours/days per week while ensuring they are no worse off than before, without the raise making you miss your monthly car payments/supermarket shopping trips/bar bill payments/extra curricular activities/holidays etc.

For firms utilising security personnel, ensure you only use registered security companies [registered by the Private Security Regulation Authority], and understand that a good and decently paid guard will have far more interest in the security and safety of your employees, contractors, visitors and assets than one who is struggling to make ends meet.

For those who have not read Maslow’s Hierarchy of Needs, please feel free to Google and learn. His pyramid is below, where too many people sit in the larger red base.



The argument that a JMD$2,000 increase will create unemployment is also one perpetuated by the registered security companies, who are already under siege from the many illegal and unregistered cheap firms operating in the industry, firms who do not even pay the present minimum wage or the legislated allowances.

min wage photo

As someone who has worked in the security world for the last 22 years, it may create temporary unemployment [I should say temporary contract breaks/shortened hours per week, as security officers are for the most part individually contracted to their security firm and are not employees]. One of the resources that short sighted companies cut after a wage increase is security. But the cut is short lived, as shortly after a minimum wage increase and the corresponding reduction in security personnel, most firms go back to the numbers that are adequate and effective for their operation. Or they suffer from losses far greater than if they had kept the right numbers of personnel.

And thus, both the JLP Government and the PNP Opposition have a great opportunity:

  1. To show Jamaica that it really is prosperity for all and not just for a few;
  2. To push for a greater equality of income for some of the marginalised in our society.

What will it be?





Outsourcing labour

When a company outsources labour, is this corporate greed? Or corporate survival?

What is ‘Outsourcing’

Outsourcing, also known as contracting out, is a practice used by some companies to reduce costs by transferring work to third party contract suppliers rather than completing it with employees. It is regarded as an effective cost-saving strategy when used properly. It is where a business process (payroll processing, claims processing), operational processes, and/or non-core functions (facility management, distribution, security, safety) are contracted to another party.

Labour photo 3

Outsourcing results in cost savings from lower labour costs, taxes, insurance premiums and reductions in the cost of production. Outsourcing can also be a way for a company to avoid government regulations or mandates, such as those around the environment or safety.

Where a local Jamaican company is also part of a global entity, there are set benchmarks that have to be achieved, whether in waste reduction, reduced water consumption, energy minimisation, safety incidents & breaches, and the all-important and topical official company headcount.

And a lot of global entities use production per employee, exclusive contractor numbers, to determine the benchmark for the ‘right’ headcount based on the size of the business.

This in itself seems a fallacy, as ultimately the management of the company dictates what the contract worker does, regardless of the third-party contract supplier providing the labour and a ‘supervisor’ [creating the illusion that contract workers are being managed externally].

For global public limited companies who have now to report on corporate social responsibility in annual accounts, international standards speak to the numbers of Full Time Equivalents [FTEs]. And as per the standard, apart from regular employees on a company’s payroll, FTE numbers include contractors.

  1. Temporary [including 1-day temps], contractor, sub-contractor, agency, seasonal and migrant workers, drivers, service providers, and vendors or other workers who receive day-to-day supervision by the company.
    • Day-to-day supervision exists when the company supervises both the result of the work and how the work is done. In other words, day-to-day supervision exists where the company directly manages the individual or supervises both the output/product [i.e., the result of the person’s work], and the means, methods, sequences, and processes by which the work is performed [i.e., how the work is done].

What I have learnt over the years is that it is certainly not open to debate that outsourcing/contracting out provides lower labour costs, even when contractors are doing the same jobs/tasks/processes as employees, and without any benefits that accrue to employees.

The Jamaican Context

Labour photos 1

  1. Many contract workers sign an annual agreement and are forced to take a 2-week contract break every year, without pay. This is so the company can claim they are ‘contractors’ and not employees, as per requirements of local Employment legislation. Some of these ‘contractors’ have worked for many years, some for a couple of decades, with the same third-party contract supplier. Should they really be considered a contractor?
  2. For most contractors in Jamaica, there is no vacation leave with pay, no sick leave with pay, no redundancy payments if the firm collapses, no company pension scheme, and very little human resource intervention by the company paying the third-party contract supplier for the labour.
  3. For the most part [there are a few exceptions], each contract worker is expected to file and pay their own statutory deductions as self-employed individuals. There are therefore no company contributions to NHT, NI etc.
    • Of note, there is a massive loss of tax revenue in outsourcing. If the Tax Authority wanted to collect this revenue, then an audit of those third-party contract suppliers [just request a list of contract firms from all major local & global {operating in Jamaica} companies], would show the millions lost over the years.
  4. If a third-party contract supplier loses the contract, there is no legislation to safeguard their contractors by ensuring they transfer to the new company now awarded the contract – in the UK, TUPE [Transfer of Undertakings (Protection of Employment) regulations], exists and is very clear on the process to be followed and the preservation of employees’ and third-party contractors’ terms and conditions when a business or undertaking, or part of one, is transferred to a new employer.
  5. Where meals may be subsidised for employees, most companies do not subsidise meals for their contract staff, or ensure in contract agreements that the contracted firm does so [though contracted office staff may be an exception to this in some cases].
  6. Uniforms and safety equipment [safety shoes etc.] are normally provided to employees; the majority of contractors have to buy their own.
  7. Contract workers are easily terminated due to the absolute lack of interaction/involvement of most company’s Human Resource Departments. All that is required is a verbal communication/email/letter from the responsible company representative managing the contract firm stating they do not need 10/20/30 people the next day or the next week. What happens to the 10/20/30 contract workers selected to stay home? No pay.
  8. Outsourcing can easily create a two-tier system amongst employees and contractors [even those working side by side], with a number of employees regarding their contractor colleagues as inferior, second-class citizens, perpetuating a classist work environment that should have no place in a modern day developing economy.
  9. There are firms who have nearly as many contracted workers as they do employees.
  10. There are some, especially within the single largest grouping/type of contract service, where 99% of the workforce is comprised of contractors.
  11. A lot of the principals of third-party contract suppliers are not respected by their workers. They are perceived as negotiating cheap wage rates to get contracts, paying inadequate wages while enriching themselves from the sweat and labour of others.
  12. Most contract negotiations [especially in large and globally linked companies] are conducted and championed by trained procurement specialists. A part of their role, and sometimes their salary/incentive package, is contingent on negotiating with suppliers so the company pays as little as possible for contracted services/supplies. And though best value does come into the equation, procurement specialists are trained to start with least cost.

Labour photo 2

So back to the questions about outsourcing or contracting out labour.

Is it corporate greed?

Is it corporate survival?




Clear, Hold and Build – Jamaica’s last chance?

Clear, Hold and Build – what does it mean, and will it work in Jamaica?

With the 4th highest per capita murder rate in the world [once at number 1], the island of Jamaica and its 2.7 million population are about to experience a crime plan just approved by the Government, the Opposition and the Senate called Clear, Hold and Build.mountain-view

And no matter what anyone may want to say, Clear, Hold and Build is foremost a military plan. The plan has the support of many in the island, people who are frustrated at what is taking place in this ‘land of wood and water’, and the seeming inabilities of past & previous administrations to tackle the root causes. Not to forget our image abroad as the “Two Jamaica’s”, an island awash with corruption in both the public and private sector.

The seriousness of crime in Jamaica cannot be underestimated, as in one recent 24-hour period, 20 people were treated at the Kingston Public Hospital for gunshot wounds, causing the hospital administration to go public with the costs to the economy and the scarce resources that were no longer able to cope with the slaughter that is taking place.

I thank Wikipedia and David H. Ucko, associate professor at the College of International Security Affairs, National Defense University, and an adjunct fellow at the Department of War Studies, King’s College London for their writings on the subject matter.

I also hope that the Government of Jamaica, the Opposition and the Senate have read and fully understand about Clear, Hold and Build, as if all three elements do not work hand in hand, then Jamaica will have lost its chance for real development and growth. We will continue as we have always done, at the edge, with a sharply divided population with one of the highest income disparities in the world.

Clear, Hold and Build.

Clear, Hold and Build is above all a military strategy that has been used in conflict zones, and where opinions on its success are divided.

Clear and hold is a counter-insurgency strategy in which military personnel clear an area of guerrillas or other insurgents, then keep the area clear of insurgents while winning the support of the populace for the government and its policies. As defined by the United States Army, “clear and hold” contains three elements: civil-military operations, combat operations, and information warfare. Only highly strategic areas are initially chosen for “clear and hold” operations; once these are secure, the operation gradually spreads to less strategic areas until the desired geographic unit [county, province, nation] is under control. Once an area has been cleared, local police [rather than military] authority is re-established and government authority re-asserted.

The clear and hold strategy was first developed by Sir Robert Thompson and the British Army during the Malayan Emergency from 1948 to 1960. It was also widely employed by the British during the Mau Mau Uprising of 1952–1960. The strategy was also implemented by General Creighton Abrams as part of the “pacification” effort conducted by the Republic of Vietnam and the U.S. Army during the Vietnam War (at which time the strategy became widely known) and was used as a counter-insurgency tactic in Algeria, Greece, the Philippines, and South Korea. The strategy was used extensively by the United States and its allies in the Iraq War.gas-riot-1

Several critical elements of the clear and hold strategy have been identified. One element is to secure support for the strategy at all levels of the traditional military forces. Experience in Vietnam has shown that traditional military forces dislike the limited role they play in the clear and hold strategy, and may successfully advocate for a more traditional war-making role. Another challenge is that the strategy takes time, which a government may not [for various reasons] have. The strategy also requires significant numbers of on-the-ground “clearing” combat and “holding” police forces. Thompson and others have also argued that clear and hold operations can only be successful by isolating the population from insurgents, but some strategists point out that this can have deleterious effects on public support for the government and its policies.

Counterinsurgency theory underlines the uniqueness of each insurgency, yet also advances an approach that is to apply across time and space. Termed clear-hold-build, the approach involves clearing contested territory through security operations and then holding that territory so as to isolate and defend it from insurgent influence. The build phase, finally, involves economic, developmental or governance-related activity intended to increase the legitimacy of the counterinsurgents and the government they represent. Done successfully, clear-hold-build allows the government to increase the territory under its control. The insurgents, meanwhile, lose both physical space and their link to the population, without which they are gradually rendered irrelevant or are simply defeated.

On a very abstract level, the sequencing and logic of clear-hold-build are sound. Yet implementing this approach is anything but easy.

Often, it is assumed that with the insurgents gone, a harmony of interest naturally prevails around the good cause of the counterinsurgents. In reality, each locality brings a unique web of competing interests, which unless carefully understood, are likely to thwart attempts at peace. The complexity is compounded where the government at the heart of the counterinsurgency campaign is viewed as corrupt, unaccountable or predatory – in such environments, clear-hold-build may not be viable, at least not without concerted reform.

What is really at stake is nothing less than reversing societal breakdown, all the while in the midst of ongoing war.

Wherever this approach is to be tried, its implementation must be suffused with an understanding of the political economy of armed conflict: the patronage networks, the functions of violence, and the distribution of privilege and power, both at the local and state levels.


In other words, proponents of clear-hold-build have a tendency to wish away the very problems that cause insurgency in the first place: a lack of government legitimacy, split loyalties among the population, and contested governance among a range of armed political groups.

Clear-hold-build has emerged as an antithesis to the “conventional” approach typically adopted by militaries facing insurgency —an approach dominated by the use of military force, raids, and body counts. Clear-hold-build challenges this approach by framing counterinsurgency as a fight for the support and loyalty of the relevant populations. Yet, beyond its exhortation for a secure environment and cooperation with local communities, it can provide few specifics. It is inevitably – as theory – more relevant for the questions it raises than for the answers that it cannot possibly provide. It is a subtle distinction, but one with fundamental consequences for how this approach is used and for the results that it may yield.

Where does this leave clear-hold-build? Some might argue that its problematic track record is itself grounds for its dismissal. Still, it is difficult to envisage a successful counterinsurgency campaign that would not in some way involve the steps of clearing, holding and building, probably in that order.

The key lies in not mistaking the approach for more than what it is. Clear-hold-build is not a strategy and must not be confused as such—arguably this has been the tendency in Afghanistan. As Hew Strachan notes, “as soon as strategy allows the expectations of theory to lessen its grasp of what is really happening it has allowed theory to be its master rather than its tool.” As a framework for analysis, clear-hold-build is an empty shell that must be filled with the specifics of the case. Only when suffused with this type of knowledge can it be the foundation of a campaign plan, one informed by available means, local opportunities, and a theory of victory.

Jamaica, can we make this work?