Undeniably, labor is one of the four factors of production, essential for the growth of the economy and the wealth of the nation. We need to grow all four factors (land, labor, capital, entrepreneurship) for the growth of the country. To expand labour productivity, we need to increase both the quantity and quality of labor. The quantity of labor in Myanmar is abundant. It is the quality issue that we have to address.
Labor is typically separated into professionals, skilled, semi-skilled and unskilled labor. Even though each of them have distinct issues, supply and demand, economic regeneration initiatives, minimum wage policies, education and skills training and the size of working population determine the conditions within the labor market in general.
These conditions in turn determine the major risk of labor market in economics: the unemployment, typically categorise into four categories; structural, frictional, cyclical and seasonal. A lot of youngsters cannot be gainfully employed in Myanmar and this has in some way contributed to the sudden surge of NNCP terrorists during the upheaval a couple of years ago. Nearly all of these terrorist activities were carried out by those between the ages of 20-35.
Hence, ensuring that unemployment is kept at a minimum, would deter those wanting to brainwash and recruit and sacrifice youngsters for their political agenda. One of the main tool is skill development, which directly addresses the quality of labor issues. Myanmar workers are short on hard skills such as a second language proficiency, IT skills and presentation and public speaking. Soft skills such as problem solving, collaboration, innovation, self learning, speedy action, etc are lacking too. Skill development would directly contribute to labor flexibility to excel in a variety of fields and at the same time increase wages as the employees have the skills demanded by employers. This would automatically provide a stronger incentive to work, reducing voluntary unemployment and increase both occupational and geographical mobility of labor. The last action that the government could do is to create higher demand for labor through provision for incentives for private sector investments and economic development and regeneration activities, to help create new jobs.
Another way to increase labor productivity is through technology. There are so many productivity tools available freely in the market, from free messaging and group collaboration to conference calls and Ai. Division of labor and effective motivation of employees would also do the trick sometimes.
Without productivity and the skills development, the wages here would continually lack behind those of our regional counterparts. It is simply a question of supply and demand. Employers demand those who have an acceptable level of both hard and soft skills mentioned prior. We simply cannot supply, making those who have these skills demand a wage premium.
The majority without those skills, however, including some of our graduates from universities, are left for scraps, trying to fit into low paying semi-skilled jobs, unable to achieve satisfaction in their careers. Thus, easier for indoctrination into anti-social activities.
Labor law is another area which could lower frictions in the labor market. A major drawback of the current law is that there is no distinguishing between white collar and blue collar workers. If one strictly follows the law, the company even has to pay overtime to a CEO, CFO or a senior manager, even though they are earning huge monthly salaries. These people are so vulnerable in dealing with their respective employers that they do need the protection of the labor law?? Incredible! The law is there to protect workers who are unable to effectively negotiate or argue with employers. Hence, a wage cut off point would be appropriate for its application, just as in Singapore. The second weakness is in the employer protection. The law does do its job to protect employees, yet it does little vice versa, subjecting the employers to the consequences of dishonest and unscrupulous employees.
Rome was not built in a day. But we better start building it so that we would have Rome in the future. We need to quickly start addressing these issues through continuous and incremental improvement so that we can achieve what every worker is yearning, to turn their pipe dreams into reality – through HIGER WAGES!