COMMISSIONER FOR LABOUR

1. COMMISSIONER FOR LABOUR

2. 8/17/2012 LABOUR MARKET POLICIESTraining for Development By Dr Ogaram David Commissioner For Labour, Employment And Industrial Relations

3. Chinese Proverb Give a man a fish and you feed him for one day. Teach a man to fish and you feed him for a lifetime. Confucius

4. INTERESTS:BASIC INTERACTIONS

5. CONCERN Skills have become increasingly important in determining an individual's ability to secure a job, retain employment and move flexibly in the labour market.

6. OUTLINE OF PRESENTATION Where are we? Do we like where we are? Where do we want to be? How do we get there? What are the challenges?

7. EXTERNAL FACTORS Operating Socio-economic Environment Structural Adjustment Process Currency Reform Trade Liberalisation Privatisation Public Enterprise Reform Civil Service Reform Globalisation, Regionalisation, Technological. HIV/AIDS.

8. 8/17/2012 POPULATION Total 25.2 Million Sex ratio Women 51% (13,000,000) Men 49% (12,200,000) Growth rate 3.4% (390,000) Urban population 11.3% (2,900,000) Fertility Rate 7.1 Labour Force 15-64 yrs 11.3 Million

9. POPULATION DISTRIBUTION

10.  GROSS NATIONAL INCOME PER CAPITA ($US) 2002 

11. NET INCREASE IN LABOUR FORCE by region (millions), 2000-2010

12. LABOR MARKET CONDITIONS BY REGION

13. INCIDENCE OF CHILD LABOR, % of 10-14 year-olds working, 1980-2002

14. TECHNOLOGY: Access to Information and Communication Technologies, 2002per 1000 people

15. YOUTH ILLITERACY RATES, 1990 and 2002 as % of 15-24 year olds

16. INFORMAL EMPLOYMENT BY REGION (selected countries), mid-to-late 1990s% of non-agricultural employment

17. ENGINE OF GROWTH Links between IC and growth: Not just about level of investment--real driver of long-term growth is productivity improvement. A good investment climate needs to encourage both. While the WDR looks at many country case studies, China, India, and Uganda are referred to throughout the report to illustrate some basic propositions. China: Unprecedented growth. Many commentators have had difficulty explaining this, and suggesting that policies were “heterodox”. WDR shows that growth largely explained by IC improvements, and strategy was pragmatic rather than eclectic. India: Also strong growth performance -- albeit still not in the same league as China. Again, IC improvements dating from 1980s provide most of the explanation). Uganda: Included to show that strategies not limited to large countries. Uganda has had growth rate 8 times the average in SSA -- mostly explained by IC improvements.Links between IC and growth: Not just about level of investment--real driver of long-term growth is productivity improvement. A good investment climate needs to encourage both. While the WDR looks at many country case studies, China, India, and Uganda are referred to throughout the report to illustrate some basic propositions. China: Unprecedented growth. Many commentators have had difficulty explaining this, and suggesting that policies were “heterodox”. WDR shows that growth largely explained by IC improvements, and strategy was pragmatic rather than eclectic. India: Also strong growth performance -- albeit still not in the same league as China. Again, IC improvements dating from 1980s provide most of the explanation). Uganda: Included to show that strategies not limited to large countries. Uganda has had growth rate 8 times the average in SSA -- mostly explained by IC improvements.

18. UNDERLYING TRENDS Population Rapidly rising population Employment Rapidly rising unemployment Worsening Terms and Conditions of service Informalisation: Informal Sector is increasingly dominant in employment. Labour Relations Increasingly conflictual.

19. FOUR UNDERLYING TRENDS AFFECTING LABOUR MARKETS Changing economic structure Globalization Technological change “Informalisation” of employment

20. IMPACTS OF GLOBALIZATION AND RELATED REFORMS ON LABOUR MARKETS Long-term benefits to workers, but painful shorter-term adjustment costs especially for unskilled labour Increasing labour and job turnover Labour migration For us the poor: “Race to the bottom”?

22. SKILL-BIASED TECHNICAL CHANGE Berman and Machin (2000), “Skill-biased Technology Transfer: Evidence from Developing Countries”. Striking increase in skills demand in 1980-1990s in middle income countries, Due to within-industry skills upgrading rather than restructuring from low to high-skill industries Same type of industries increasing skills as in high income countries in 1960s-1980s, ie. Suggesting transfer of skill-biased technology to developing countries But 10 years later. But No strong evidence of technology transfer to low income countries

23. THE CASE OF MALAYSIA Tan (2003) “The Skills Challenge of New Technology: Training and Productivity Growth in Malaysia” Rising trend in employment share of skilled workers (from 9% to 15% between 1977 to 1996) Use of new technology is biased towards use of skilled professionals, technicians and managers, but neutral or skill-replacing for less skilled groups Only highly skilled workers are responsible for adoption and use of new information technologies (ICT), resulting in higher productivity growth and wages especially when accompanied by training.

24. As an introduction, it is going to be useful to know that, with important differences across countries, the ICT sector has made significant contributions to the three economies, particularly over the past decade. This doesn’t mean, however, that these technologies came out in the last years. Strictly speaking, the so-called Information Revolution started when the electronic computer started replacing mechanical machines by the end of the 50’s. Since then, there has been a shift from industrial economies to knowledge-based economies, that accelerated during the 90’s, with many implications for the labor market opportunities for qualified and less qualified workers. Now, why precisely the 90’s mark an inflexion point in this sector? And why everybody started talking about the New Economy, the Digital Revolution, and the like? Well, because it was in the post-1995 period when ICT spending increased as never before, changing the trends in the composition of investment and capital formation in many countries.As an introduction, it is going to be useful to know that, with important differences across countries, the ICT sector has made significant contributions to the three economies, particularly over the past decade. This doesn’t mean, however, that these technologies came out in the last years. Strictly speaking, the so-called Information Revolution started when the electronic computer started replacing mechanical machines by the end of the 50’s. Since then, there has been a shift from industrial economies to knowledge-based economies, that accelerated during the 90’s, with many implications for the labor market opportunities for qualified and less qualified workers. Now, why precisely the 90’s mark an inflexion point in this sector? And why everybody started talking about the New Economy, the Digital Revolution, and the like? Well, because it was in the post-1995 period when ICT spending increased as never before, changing the trends in the composition of investment and capital formation in many countries.

25. Notas: Población empleada total cubre a aquellos de 16 años en adelante. Incluye a los trabajadores familiares sin pago. Se refiere al uso de computadora o Internet en el único o principal trabajo. El uso de Internet en el trabajo se refiere al acto de conectarse a Internet y al uso de correo electrónico.Notas: Población empleada total cubre a aquellos de 16 años en adelante. Incluye a los trabajadores familiares sin pago. Se refiere al uso de computadora o Internet en el único o principal trabajo. El uso de Internet en el trabajo se refiere al acto de conectarse a Internet y al uso de correo electrónico.

27. TOP INNOVATIONS – LAST 25 YRS Internet Cell phone Personal computers Fibre optics E-mail Commercialised GPS Portable computers Memory storage discs Consumer level digital cameras Radio frequency ID tags (checkout lines in shops) MEMS (microelectromechanical systems as in cars) DNA fingerprinting (crime + indentification) Air bags (as in cars of today)

28. TOP INNOVATIONS – LAST 25 YRS ATM Advanced batteries (nickel metal lithium iron) Hybrid car OLEDs (Organic light emitting diodes) Display panels HDTV Space shuttle Nanotechnology Flash memory Voice mail Modern hearing aids Short range high frequency radio

29. WHAT IS COMMON? The modern day technology is 2% raw materials 98% thought or brain power This has significant implications for us who are still exporting raw materials as basic exports. We are less significant. We must focus on the production and deployment of the best brains for survival.

30. WHERE ARE WE? We are in an unpleasant situation We are not creating enough jobs. (While we need 390,000 jobs/year, we are creating only 8,120) The labour force is under-utilised. (65% of the labour force is underemployed) The youths are most unutilised (Their share in employment is only 19% yet they are more - 56%) Technology and skills have not permeated Child labour exists affecting at least 1.2 million children).

31. WHERE ARE WE? What kind of jobs have been created? Low paid, low quality, in informal sector Low skilled private sector jobs in manufacturing and agriculture Jobs in the SMEs Where can new and good jobs potentially come from? ICT in managerial, professional and service sectors.

32. KEY CONCLUSIONS Major differences in economic performance across countries and regions; gaps not narrowing (except East Asia). For poor countries - race to the bottom Size of labor force is increasing significantly in developing countries including Uganda (migration) High unemployment and working poverty in developing countries (except East Asia) (migration) Wage levels are diverging between and within countries. (migration) The demand for high skilled labour is increasing and demand for low skills is decreasing.

33. WHY HAS THIS HAPPENED? Globalization, technology and trade? Technological change, and capital-skill complementarily increase returns to skills and creates demand for skilled workers Is there international evidence? Skill-biased technological change is more important in job creation than trade liberalization. But trade facilitates imports of equipment—with technology complementary to skills—and can raise relative skills demand Country-specific factors? Quite important Status and change over time in growth, economic system, trade regime, labor markets conditions, unions, labor regulation, education and training systems.

34. UNIVERSAL POLICY PRIORITIES Enabling job creation Business environment to be improved. Skills development to be carried out Balancing flexibility with security Labour institutions to be strengthened Supporting workers Active and passive policies to be made Addressing needs of vulnerable workers.

35. MAIN MESSAGES We started on the journey in 1987 (SAPs) but must pull up Improving the investment climate is critical to faster growth and deeper poverty reduction Reducing policy related risks, costs, and barriers to competition helps Action for more/refined changes in formal policies is required.

36. MAIN MESSAGES Consistence and persistence rather than perfection are key to progress Marathon not a sprint Focus on delivering the basics We, on our own, are not helpless to change the course of events International communities can do more but we must do our part well.

37. MAIN INTERVENTIONS Development of a skilled and healthy workforce Improvement in the investment climate go hand in hand with enhancement of human energy and capital Provision of secondary and tertiary education should be crafted for the mass poor (not for the few non poor) Craft the training and skills system to be relevant to the labour market needs (local and international).

38. MAIN INTERVENTIONS Do an audit of skills supply and demand, review skills and technology institutions Address regulatory burden and make improvements with simplicity Ensure active partnership between Manpower planning Labour market planning. Economic planning,

39. MAIN INTERVENTIONS Increase public investment in infrastructure Improve administration of commercial legislation Reform labour legislation to ensure fairness Continue privatisation of large public enterprises in order to boost efficiency Open new sectors to private sector competition. Work on the markets For people to produce goods, it must make economic sense (quality fairness).

40. IMPROVE THE BASICS Stability and security Peace – and more peace Macro economic stability Secure property rights Regulation and taxation regimes Balance economic and social goals Fair regulation and taxation (not necessarily less).

41. IMPROVE THE BASICS Finance and infrastructure Watch out on traditional approaches They have poor track records There is a need to re-craft them Continue improvements on the investment climate Focus on sectors with high job yield and high job multiplier effects Workers and labour market Ensure, skilled, healthy and motivated workers Regulate to benefit all workers not just formal employees Assist workers cope with change (social security).

42. MONITORING+EVALUATION Monitoring Important for implementing and following up on measures: data on expenditure, participation and labour market information in general Located usually with PES: at decentralised units and HQs Not enough to assess overall (macro) impact but absolutely necessary for efficient labour market administration: benchmarking and feedback important

43. MONITORING+EVALUATION Evaluation Assess overall micro and macro impact To assess impact on labour market: integration effect and earnings effect Different methods of evaluation: aggregate impact, non experimental, quasi experimental, experimental, cost/benefit, qualitative asessments Programme vs. target evaluation Cross section or longitudinal.

44. MONITORING VS. EVALUATION

45. BASIC CHALLENGES How to do more and more with less and less resources Marginalisation in the face of globalisation, liberalisation, free market economy, and technology changes. The “globalisers” are benefiting. The “globalised” are racing to the bottom.

46. 46 BASIC CHALLENGES Protection of Vulnerable Groups (social protection) – a lot more has to be done Persons with disabilities Women workers especially in entertainment and tourism working environment Children, and youth in employment The elderly.

47. 47 BASIC CHALLENGES Data: collection, processing and dissemination Essential information on the enterprise Responsibility for the collected data District or local Government responsibility (administrative data) National responsibility (national manpower, labour force and household surveys) Employers and workers.

48. LESSONS Happy workers work better-Therefore: Ensure social justice Watch out for unfair regulation on both sides, ensure real best legislative practice, balancing, etc Be mindful of the legitimate rights (workers, employers, communities) Recall the Basics Modernise.

49. LESSONS Half measures do not work Progress only when we all work together No “one size fits all” solution We are not powerless to change the course of events.

50. THE WAY TO GO – The Way Of The Ants:Simple Agents, Simple Tasks, Simple Rules

51. THEIR THEORY? More Is Better

52. THEIR CONTROLS? Indirect – Specialisation and Coordination