Another Look at Casualization

By Neo Simutanyi

July 19th 2011

The term 'casualisation' describes the practice of hiring employees on short-term contracts, where such individuals are paid low wages and denied the benefits enjoyed by permanent employees. This practice is said to favour employers, as it reduces labour costs and maximize profits, but to disadvantage the affected workers with low incomes, poor conditions and lack of job security. The debate on casualisation has focused on the key issue of employment conditions versus employment creation, on quality versus quantity. This essay offers some thoughts on the subject, and argues that casualisation needs to be analysed in the context of a liberalized market economy and the global trend towards labour market flexibility. During Zambia's 2006 general election campaign some opposition parties took issue with the idea of casualisation of labour, especially by foreign-owned firms. They argued that multinationals had resorted to hiring casual labour for jobs that would ordinarily be permanent. The impressive performance of the Patriotic Front, which campaigned on labour issues, reinforced calls for government to outlaw casualization and introduce minimum employment standards.

The anti-casualisation debate, spearheaded by the trade unions and some NGOs, suggests nostalgia for the full-time, unionized workforce with guaranteed social security, which characterized the state-dominated economy of the 1980s. For example, trade unions and organisations such as the Jesuit Centre for Theological Reflection (JCTR) have suggested that any worker on a contract of more than six months should be placed on permanent terms so as to enjoy a higher income and guaranteed job security and terminal benefits.

Weighed against the need for providing incomes and employment to a greater number of people, the position of trade unions and some NGOs is unrealistic. It assumes that employers have the capacity to engage workers on a permanent basis and with generous benefits. The reality is that many employers, including government, are unable to do this. The practice of casualisation should be considered, not just as an economic necessity, but as a requirement of labour market flexibility, which contributes to employment creation. It is part of a package of the development of a capitalist market economy.

While it is desirable that all employees be guaranteed a minimum wage to meet basic needs, many employers, especially those in the formal small and medium enterprise sector (SME) and the informal sector, are unable to afford this. But by providing casual work, firms provide employment to thousands of people who would otherwise lack an income. While casual employment tends to be low paid, and of inferior quality compared to permanent jobs, permanent employment increases labour costs and thereby limits overall employment creation.

In a labour surplus economy such as that of Zambia, arguments for high wages and guaranteed benefits and social security for all employees go against sound market principles. We need to avoid confusing and misrepresenting the employment problem. Pay and conditions are not the issue. People need employment and a regular income to meet their needs. Working conditions and job security depend on the overall performance of the economy and the ability of firms to pay. When considering demands to prohibit casualisation in Zambia there is need to recognize that labour market flexibility is an important prerequisite to employment creation in a labour surplus market economy. Facilitating employment to the thrust of public policy in this area. The quality of that employment should come later. China adopted this employment policy very successfully, and is today the second largest economy in the world.

This article is written by the Zambia Institute for Public Policy Analysis syndicated through http://www.africanliberty.org

Author: Neo Simutanyi is Executive Director, Centre for Policy Dialogue, Lusaka. Email: neo.simutanyi@gmail.com

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