The Middle East Tribune

Centered on Civil Liberties & Political Issues, Human Development & Socioeconomic Matters

Inflaming the Bushy Joblessness Problem

 

The financial crisis of 2008 has crippled most economies of the developed world to which insolvency spread out, liquidity dried out, credit crunched, joblessness soared up and so forth. In principle, high levels of unemployment usually creates a deflationary trend in the markets. Accordingly, in the United States and Europe, inflation rate declined when unemployment rates rose above the “natural rate of unemployment”.

Though Lebanon was–and still is–suffering from political instability, chronic high levels of unemployment and high inflationary prices, yet the impact of that global economic crisis was mild on the Lebanese economy. However, several years after the crisis, market prices are in continuous increase irrespective of the rising levels of unemployment.

Actually, Lebanon’s market prices have been inflammatory and unreasonable for some time, thanks to the incompetence of the so-called General Confederation of Lebanese Workers (CGTL) and irresponsibility of Ministry of Commerce. The mere fact is that neither the government nor the CGTL made any tangible effort to pin down the continuous increase of prices.

This dual inefficacy has resulted in creating a common conception among business cartels that Lebanese consumers have to go through any price increase, as there is no reliable government or efficient labor unions to protect the interest of low-income classes.

By and large, the current economic downtrend coupled with government’s inappropriate regulations (four Salary adjustments laws in 65 days) and Lebanon’s inequitable taxation plan have agitated the ongoing increase of prices and thus led to the shrinkage of consumer spending, especially among low-income classes, which will create further pressure on the economy in the near future.

Besides this unheard-of chaotic management of wage increase, the government could not restrain the price increase of living essentials and indispensable services such as foodstuff, fuel, schooling, medication and hospitalization–just to name few of many. In fact, should the government has fulfilled its obligations to bring down the profit margins of private businesses, prices should have fallen of which Lebanese citizens and the economy would have been in better shape.

The lack of government will to uproot trade monopolization and corruption, and to stonewall the current political patronizing of its incompetent economic officials and irresponsible supervisory offices is aggravating the downturn of this ailing economy. It is the duty of the Lebanese authorities to deflate the current prices, control profit margins of private businesses, favor competition over monopolization, readjust its taxation policy and prudently adjust the cost-of-living allowance so that to help in restarting the process of economic growth.

Economic experts emphasize that alongside the degree of economic growth, inflation and unemployment rate are the basic indexes of economic analysis of most modern economies. Yet, only few Lebanese officials and economic analysts stress on the importance of combating inflation and unemployment in their public lectures on economic progress.

Fears of job loss and unemployment in Lebanon’s labor market are alarmingly high. This is because government officials and economic magnates alike necessitate the downsizing of the workforce in tandem with the injection of new blood in the veins of private and public sector—their disguised term for dismissal of aged employees—with their proposed reform and development plans.

Earlier downsizing experiences, like the layoff of around 1200  employees of Middle East Airline (MEA) in 2001, show that almost all of those dismissed employees continue to be unemployed—probably, forever—as the majority were around 50 years of age, which destroyed the economic and social situations of four thousand citizens or so, let-alone the future of their dependents.

Under the circumstances, the applicability of any downsizing design is null, unless the country has a well-established social safety net that provide unemployment benefits, retirement pension, comprehensive health care coverage, quality public education along with other free public services. Otherwise, the government and economic clubs are inflaming the bushy joblessness problem to become a raging inferno.

Job loss and long-term unemployment create instability and intensify insecurity even in developed countries; look at the euro zone, for example. However, in a developing country, like Lebanon, similar joblessness problems, especially among the underprivileged, would bring catastrophic effects on the socioeconomic and political situations of the state.

To avoid that, the government should annul any redundancy designs from their reform plans to solve the issue of overstaffing as long as there is no lifelong retirement pension scheme. With urgency, the government has to address the problem of youth unemployment, especially non-graduates, by reducing the outsized number of cheap foreign workers, for instance, so that Lebanese day laborers and wage earners can have adequate paying jobs to support their needs.

The authorities have to upgrade its investment and tax laws to encourage and facilitate the establishing of foreign and national investments and joint ventures through which the Lebanese youth, especially graduates (more than 30,000 fresh college graduates each year), can capture good paying jobs in their homeland, instead of transforming them into expatriates and immigrants.

By all odds, the chronic presence of high levels of unemployment and high inflation rates are problematic enough to undermine Lebanon’s economy. However, adding other problems, like inefficient governance, political instability, lawlessness, corruption, insecurity, inordinate monopolization, inferior public services, absence of real social security and health care services, to that dilemma will drain the country out to poverty.

The Lebanese government has no choice but to find quick-fix remedies and long-term answers to the severe social and economic problems of this country. Otherwise, only God knows what will happen later.

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3 comments on “Inflaming the Bushy Joblessness Problem

  1. Welcome to Lebanon
    May 17, 2012

    You say, “the fear of job loss…” however, one would think that the fear of job loss would spur those with jobs to perform them better, e.g., provide better customer service. Unfortunately, I have found the concept of “excellence in customer service” in Lebanon to be fairly non-existent. Whether it is eating out, or shopping at a retail store, or visiting a pharmacy, whether you are Lebanese or foreign, the customer seems to be an annoyance rather than something to be valued. There appears to be a HUGE market for customer service training in Lebanon, if only you could convince business owners that they, and their employees need it! (Less nepotism might help too. Hard to fire your niece or uncle if you have to answer to family for it.)

    Like

    • M. Moussalli
      May 17, 2012

      There is no purpose of denying that Lebanese customer service has been degraded to an unsatisfying level. Besides nepotism, there is a long list of reasons, like the presense of low wages, lack of specialization, employment of untrained foreign labor, lack of real quality control, absence of human capital for this unfortunate actuality.
      The fact remains that as long as the country is politically unstablized, we won’t arrive at real reform and development before that even in the private sector. It is a contagious case.
      Having said that does not mean that we don’t have hope to develop our country and business communities. It’s the contrary, I’m sure that once this black story comes to an end, we will take off again to a better destination.
      Thank you for your valued comment

      Like

  2. GGM
    March 16, 2012

    Thank you for this valuable contribution.

    Like

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Mohammad S. Moussalli

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© 2017 Mohammad S. Moussalli; www.middleeasttribune.wordpress.com ------- Sharing, reblogging, excerpts and republication of this material, or part thereof, are permissible PROVIDED that it's clearly attributed to the author with reference to the original publication.
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