Clem Sunter

Decent work means decent business

2011-02-02 13:00

I fully support calls by the unions for decent work. I have worked for 42 years for the same company and now serve as a non-executive director on one of its boards. Work has been a major part of my life; and I can count myself very lucky that it has always been decent and challenging and I have been decently remunerated. My work has immeasurably improved my quality of life.

If that applies to me, I have to argue that it should apply to everyone else as far as it is reasonably possible. Put another way, if the purpose of our existence is to create the greatest happiness among the greatest number, then decent work should be high on the list of any society’s priorities. We all know that life is unequal and harsh at times, but that should not stop all of us striving to create a better life for all – however long it takes. Progress is about taking incremental steps towards an honourable goal.

Now comes the reality check. Decent work depends on three factors:

1. The organisation you work for is financially sustainable. In the case of a business, that means the annual value of the products and services generated by the business exceeds the cost of providing them through all parts of the economic cycle. In the case of an NGO, it means your donations consistently exceed your costs and you have sufficient cash reserves for serious downturns. In the case of a civil servant, it is the knowledge that the government is practising sensible fiscal policies and not indulging in large budget deficits. In short, job security which is an essential aspect of decent work rests on working for a soundly managed enterprise with people who know what they are doing.

2. The environment within which you work is conducive to your fulfilling your aspirations as a human being and leading a balanced life. The management style is fair and supportive and you are able to mix work with fun at work. Comradeship binds you and your senior and junior colleagues into an effective team. We all know how hard it is to satisfy this condition when the tasks are arduous and require an exceptional amount of physical exertion, but it can be done. Ask any marine commander.

3. As far as enterprises are concerned where life is risky, decent work is about having the ability to grow your business if you succeed and the ability to try another venture if you fail. It is about being financially rewarded for the risks you have taken and being held up as a role model for young people of a similar disposition to follow. Above all, it is the thrill of being your own boss – free of the hierarchy and bureaucracy that always accompany organisations beyond a certain size.

So what should we do to create more decent work? Unlike other articles which only deal in generalities, I am going to offer my personal list of specific recommendations:

1. We should change the grand objective of creating five million jobs by 2020 to creating one million new businesses by 2020 that will lead to at least five million jobs if not more. The reason for doing this is to recognise that decent work of any kind flows from the growth in number of enterprises. Even civil servant jobs and public works programmes are financed out of the taxation that comes from increasing the number of transactions (VAT), boosting the number of companies (company tax) and raising the number of employees (income tax) working in the additional businesses.

2. We should optimise the environment in which small business growth can take place, and particularly in which informal sector champions can graduate into the formal business sector and maybe one day into becoming world class players with an international customer base. This will require a revolutionary approach to tax, micro-lending, angel and venture capital investing, business school entrepreneurial programmes and slashing bureaucratic red tape surrounding business formation so that entrepreneurs have the flexibility to survive the uncertainties of start-up.

3. We should have an Entrepreneurial Economic Empowerment Programme (EEE) where scorecards of large companies, banks and others have a substantial number of points riding on their contribution towards the development of small business and a more participative, democratic economy where economic power is more widely shared.

4. In order to ensure that large companies are decent businesses in the second meaning of offering a decent environment in which to work, we should make it obligatory that they publish in their Annual Report a corporate Gini Coefficient. This would measure the remuneration level of the top salary earners (including all bonuses and gains from share options) versus that of the bottom wage earners. One could then make comparisons across companies and industries, but more importantly judge whether a company is behaving decently in a Hard Times economic scenario by spreading the pain across the entire workforce including the Board of Directors. If the workers are asked to exercise restraint, so should the directors in order that everybody keeps his or her job.

These actions more than any others will lead us down the New Growth Path.

Send your comments to Clem

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