The government recently proposed the dissolution of the Ministry of Labor and dispersing its functions among various ministries. The government’s argument for such a directive is that it would enhance efficiency and reduce costs. The proposal has been met with an overwhelmingly negative response from laypeople and pundits alike.
Labor ministries have been around for over 100 years. The
first form of labor ministries was statistical and research
centers that provided policymakers with data on the labor market and social situation to support
the making of labor and socially relevant legislation. Examples are the German
Commission for Labor Statistics (established in 1882), the British Statistical
Office (1887), and French Office (1891), among others. However, by 1910, 22
European countries had such entities, which later became ministries.
Crises, economic depressions, high unemployment rates, and social
conflict have led to the promotion of labor departments to ministries of labor,
such that 23 countries had ministries of labor by 1938. Currently, most
countries have labor ministries.
Ministries of labor have a pivotal role in terms of influencing governance at
the workplace, specific labor markets, and the national labor market. This does
not negate the fact that other ministries and government departments may have a
role in labor administration.
Depending upon the development goals of the country and the strength of the
ministry of labor, the role of the ministry itself can fluctuate between
leadership and coordination to simply following and participating.
Given that high unemployment rates have brought about
ministries of labor, does the unemployment rate in Jordan warrant the
dissolution of the Ministry of Labor and the scattering of its functions among
the ministries of education, industry, and others?
The unemployment rate in Jordan, at 23.2 percent, is the
highest it has been in over three decades. Unemployment among women stands at
30.8 percent, and women’s labor participation at 14 percent places Jordan at a
rank of 179 out of 181 countries, ahead only of two countries that suffer from
political turmoil: Iraq and Yemen. Moreover, unemployment among youth is 49
percent; that is, one out of two youths is unemployed.
Based on the current labor data, the role of the Ministry of Labor as a
labor policy setter should be enhanced, not diminished.
How about the performance of the Ministry of
Labor? Can one, based on the data, assert that the ministry is not performing
well and warrants doing away with it?
The answer is no! The labor situation in Jordan,
as elsewhere, is affected by social, economic, and political factors. The
government has been repeatedly stating that the economy has been adversely
affected by regional turmoil. If this statement is true, then the Ministry of
Labor, like the other ministries, should be blameless. Moreover, raising energy
prices leads to higher unemployment; raising taxes contributes to stagnation
and economic downturns; etc. Therefore, the performance measure cannot be used
as an excuse for fragmenting the ministry.
What if the breakup of the functions and their
integration into other ministries leads to greater effectiveness and
efficiency? Actually, for greater effectiveness and efficiency to occur, the
government would have to demonstrate great coordination among the various
ministries and departments. Given that each ministry operates vertically and in
a seemingly independent manner from other ministries (I mind my shop and you
mind yours), Jordanian Cabinets have not been known to be coordinated. As such,
increased efficiency and effectiveness are not likely to happen.
In fact, inefficiencies may occur as mergers
typically ignore the differences in the working culture of various
organizations. Such disregard for working cultures had been estimated by
McKinsey to lower performance by 14 percent. In addition, the various salary
scales applied by the merged institutions will play havoc with the human
resources departments.
Let us not rush to fragment any ministry before
careful study and analysis. Jordan is not unique in the world. Other countries’
experiences and research should be used to avoid the blunders they made. Jordan
is not inventing the wheel.
Published on Jordan News
https://www.jordannews.jo/Section-36/Opinion/No-need-to-rush-to-dismantle-Ministry-of-Labor-20542
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