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Life after ArcelorMittal - When Giants Fall

Posted by Bhushan Singh on Wednesday, 13 April 2016 in General

History is awash with examples of economic paradigm shifts. I don’t want to go too far back, but one can easily recall the dismantling of the British Empire. There are always those who will benefit and those who will not with each paradigm shift.

With the failure of Arcelor Mittal in Trinidad and Tobago and the retrenchment of so many employees in other companies we often hear about the statistics. We look at the numbers and wonder what the effect on the GDP would be. How will that affect my business? What is the country’s unemployment rate? What is the effect on foreign exchange earnings? Will the price of steel now be higher? Etc. etc.

Does anyone take the time to determine the socio-economic effects on the communities and the lives of the retrenched workers? Behind the numbers are real people, with real lives and all the commitments and responsibilities that go with that. Mortgage payments, car payments, school fees, medical expenses, dreams of a vacation, retirement income, savings goals, rent and the list goes on.

How does life continue for these people especially given the fact that in the case of insolvency they are last on the totem pole? How many lives are shattered and dreams destroyed in the process? Is there any type of psychological counselling to help these people rebuild their shattered lives? Many of these people as in many other industries would have built their lives around a company that they thought would see them through until retirement.

While we talk about finding a new job and skill transferability we must again remember that these are not computers or machinery that we are speaking about but human beings with emotions that have been traumatized. There must be some type of help to bring closure to a significant chapter in their story. Some of these people have support from family members, religious groups and friends, but make no mistake, many don’t have any support. In fact I might dare to say that even those who try to provide the support, though well intentioned, may not be fully equipped to deal with the psychological trauma. How many of these people will be thrown into depression and all the ill effects that goes with it?

A similar effect would have happened with the demise of the sugar industry. Up to this day we hear of stories about the closure of Caroni 1975 Limited and the fallout after.

Treating people like statistics can have disastrous consequences as we have seen many times throughout history but have yet to learn any lessons from. According to research done by Professor George Rachiotis, tough financial austerity measures in Greece have led to a 35% jump in suicide rates in a little less than 2 years. Professor Rachiotis stated that there was a significant correlation between suicide rates with an increase in unemployment in Greece, where unemployment has almost doubled since 2009. God forbid that to happen in Trinidad and Tobago.

So what is a job? Well, it all depends. From a legal standpoint in Trinidad and Tobago, a worker’s job is his/her property and can only be taken away by due process of law. From an economic view, a worker rents his labour to an employer in exchange for a fair wage thereby contributing to the GDP of the country. From the psychological perspective a job is more than a person’s income. It provides the person with a certain status in society, it provides them with a personal and professional network. A job is also part of the person’s self-esteem, part of helping an individual with a sense of self-worth and sense of accomplishment. A job is part of a person’s role in society.

Don’t believe me? Well, have you ever spoken to someone who while working constantly complained and lamented about the trials of the job? However when they retire, they reminisce with pride about when they were working? Human beings are complex creatures.

I am in no way purporting that we should prop up failing industries. Supporting a failing company or industry also comes at a phenomenal price (State companies are you listening?) We would have also learnt that lesson many times before. However, we must prepare the worker of today’s world for the change of pace, especially disruptive change that can happen fast. The size of the company or the industry does not matter. The bigger they are the faster they fall.

Between 2008 and 2015 there were over 500 bank failures in the United States. At home, yesterday it was Caroni Ltd, today it is Arcelor Mittal and Centrin; whose turn will it be tomorrow? We are not immune to international market shocks. In fact we are more vulnerable because we are heavily dependent on one sector. You would recall the IMF stating that as a country, we have under-saved and under-invested in our future. Norway, who has been in the oil industry has a stabilization fund that is valued at around $800 billion US as of January 2016 and they have been in this sector mainly since the 1960s; in Trinidad we have been in oil for about 100 years.

Whilst fortune favours the brave there must be some safeguards for example personal savings or insurance etc. that the worker of today should have, to mitigate against the often harsh truths of the global economy. At the same time we must be sensitive to our fellow man and the circumstance, because after all who knows what tomorrow brings?

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