The World Bank is concerned that there are too many protections for workers and that this is threatening the future growth of the business world. It is calling for lower minimum wages and stronger powers for employers in a shake-up of the current labour laws.
Greater powers for employers
The World Bank wants employers to be able to hire and fire people more easily and to have the minimum wage lowered. This is all in a drive to enable businesses to hire workers at a lower cost with the main target being developing countries.
Trade Unions are shocked at the suggestions, which would decrease the rights of workers and reduce salaries. Workers would be adversely affected by the new proposals by the shared prosperity agenda set out by the bank’s president, Jim Yong Kim.
These future proposals by the bank would mean employers would not need to contribute to social security and that they would be free to pay the lowest wages possible. The employer would also be able to fire people with ease and with little recourse for the worker. Unions would also have diminished powers.
Lower minimum wages
Workers would have very few rights in the new world envisioned by the World Bank as people could be fired quickly and paid low wages. The opt-out of minimum wages would apply if a company offered a profit-sharing scheme.
Critics point out that this would mean that people would be more easily exploited, forced to take poorly paid jobs and possibly unable to afford basic necessities. It would also mean prejudices and unfair dismissals could increase unchecked, as companies could hire and fire on a whim.
Protection against robots and AI
However, the World Bank says that its ideas are to make employees more competitive and thus more attractive to companies in the face of increasing technology use. If employees continue to be expensive to hire and to keep on with high wages and employment rights, companies would be more likely to favour robots and AI.
Another area of interest for the World Bank are zero-hour contracts, which have come under severe criticism in the UK over the past few years. The World Bank is keen to look at increasing the number of working relationships that are not traditional employee/employer relationships with the aim of decreasing the overall cost of labour to a business.
The World Bank’s hypothesis is that increasing numbers of zero-hour contracts would produce a more dynamic labour market as part of an overall programme of deregulation of the labour market..
Although critics state that this would result in wide-spread lowering of workers’ incomes, the World Bank insists that this would be off-set by a basic level of social insurance that would be paid for by ‘regressive consumption taxes’.
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