By Shadreck Zangairai
Employment relations climate is largely inclined to ideologies adopted in a given country. Behaviour of the parties in the employment relationship in most cases is driven by implications posed by embraced philosophies. Like any other principle, state or neo-liberal corporatism have own effects on employment relations. In this article I will discuss the main inferences of neoliberal corporatism on employment relations, and further to that, I will identify the doctrines of neo-liberal corporatism system and how this thinking has impacted on employment relations in the Zimbabwean context. Neo-liberal corporatism is a new economic theory which favors the free market principles. I give reference to George Bush Senior’s quote in November 1992 when he said that neoliberalism is not a collection of theories meant to improve the economy but a strategy of “class struggle” (in Marxist terms) designed to redistribute wealth upward toward an increasingly narrow fraction of population (top 1%) thus it is the continuous consolidation of money and power into higher, tighter and righter hands.
NEOLIBERAL CORPORATISM IN ZIMBABWE
Zimbabwean government discarded State Corporatist controls in 1990 and adopted neoliberal policy called Economic Structural Adjustment Programme (ESAP), an economic reform based on free market principles. ESAP was prescribed by IMF and the World Bank who preached that the programme was aimed at stimulating growth based on higher productivity and competitiveness. To borrow Raftopoulos and Phimister’s words, its main elements are trade liberalisation, fiscal and monetary policy reforms, public enterprise reforms, and budget deficit reforms, deregulation of investment, labour market and price controls, devaluation of the Zimbabwean currency, retrenchments in private and public enterprises and cost recovery measures in social services and ending of subsidies. However, according to Labour Unions such as the ZCTU, Neoliberal corporatism did more harm than good to the Zimbabwean economy which impacted on employment relations.
Over the past 30 years, state intervention to reshape employment relations has become a generalized feature of contemporary capitalism. A broad neoliberal reconstruction of the market order has gone hand in hand with a more active state. I am of the view that liberalization in the sphere of employment relations could not have taken place without a more active state. Building on a regulation theory framework and an elaboration of the concept of neoliberalism as the regulatory infrastructure of emergent growth models, the author examines how the widespread shift from wage-led growth to other forms of growth across the advanced capitalist world has encouraged changes in the role of the state in the regulation of employment relations. These roles include market making, individual employment regulation in place of collective regulation, state-directed social pacts, and redrawing the boundaries between work and non-work. The article concludes with an explanation for continuing variations in employment relations.
While corporatism poses some serious dangers for labour, it also offers the prospect of making some headway towards economic democracy. Corporatism has three key advantages over other industrial relations systems. First, by requiring workers to overcome collective action problems, it maximizes their strength and enables them to have a sustained power advantage over the employers. Second, it enables workers to pursue income policies, social contracts, and other forms of society‐wide bargaining, in which they exchange goods, such as wage rises, over which they have a lot of influence for goods, such as greater control, over which their direct influence is weaker. And third, it enables the goods that are obtained to be distributed to all workers.
IMPLICATIONS OF NEOLIBERALISM ON EMPLOYMENT RELATIONS
Trade liberalisation: – This principle intensified market competition and opened floodgates of cheap imports such as clothing which crippled local textile and clothing industries, the likes of Cone Textiles, Chicago, Edgars, among others. Productivity and profitability levels in most industries went on the low. Faced with this pressure, most companies re-assessed their management systems and labour cost structures and introduced measures meant to curb further losses. Measures introduced included salary increase freeze, labour rationalization which led to massive retrenchment and jobs losses and untold industrial unrest. Most Companies folded arms because of operational difficulties. Trade liberalisation also led to job insecurity due to company closures and Trade Union numbers were also affected.
Fiscal and monetary policy reforms: – Neoliberalism called for introduction of tighter fiscal discipline which meant that government was to shift its focus from the socialist ideology it preached for all along. Tighter fiscal discipline has a number of implications for employment relations. Fiscal and monetary policy favoured the free market system which spearheaded classes in the workplace. Employees kept on demanding salaries in line with the increased cost of living. However salaries did not keep pace with the increasing cost of living thereby affecting relations at work.
Public enterprise reform: – Neoliberalism led to a number of state owned or controlled enterprises privatizing. For instance, PTC was unbundled into Telone, POSB, the Department of Civil Aviation was abolished and replaced by Civil Aviation Authority of Zimbabwe in terms of the Civil Aviation Act [Chapter 13:16]. Such privatization led to job losses in some cases. This led to retrenchments due to less complement requirements in the new entities and companies also struggled to raise retrenchment packages.
Devaluation of local currency: – Neoliberalism also pushed for the devaluation of the local currency leading to the currency loosing value at a faster rate. In November 1997, the Zimbabwean dollar depreciated in value by 74 per cent in four hours (Bond 2010), reflecting a deepening economic crisis and growing unrest in Zimbabwe. This led to fall in real value of employee income and loss of purchasing power and the pressure to increase salaries was always vented on the employer. Price of commodities kept on going up beyond the capacity of the individual worker. Subsequently the country encountered a number of industrial unrest with the greatest being the mass stay away from 1996 to 1998. From the employer side, neoliberalism brought inflation which eroded the real value of employer’s returns thereby making it difficult to operate and meet employee demands.
