Beware of the iron curtain governing labour

Dock workers at Mombasa Port have reason to celebrate after the Competition Authority of Kenya (CAK) allowed them to fix their own fees.

But before they begin to flex their muscles and triple their fees as the Kenya Ships Contractors Association (KSCA) Chairman Richard Jefwa seems to suggest, it would be prudent for them to take note of the iron law of unintended consequences.

This is the law that has governed relationships between owners of labour and capital since the industrial revolution in the 1800s and 1900s. During this period, industries — and agriculture — that employed large numbers of people replaced the workers with machines.

Interestingly, the machines — with minimal worker supervision — increased productivity exponentially earning owners of capital huge profits. Today, the digital age and robotics technology poses an even greater threat to organised labour in all sectors of the global economy.

This leaves owners of labour with only two options either reduce the costs to a level that denies owners of capital an economic justification for investing in new technology or raise costs in tandem with productivity.

New fees

A proper understanding of this proposition by both the Kenya Ports Authority and Kenya Maritime Authority would guide them as they work with KSCA to fix new fees.

It would be useful for the trio to also remember that Mombasa Port does not enjoy a monopoly as Dar-es-Salaam and Tanga ports are busy modernising their operations and increasing their competitiveness with Mombasa.

This means their customers – especially those carrying regional cargo - will shift base as soon as it is no longer competitive to dock at Mombasa Port.

Perhaps, this lesson is applicable to the local unions some of which are preparing to sign new Collective Bargaining Agreements with their employers.

The workers on strike or those planning to withdraw their labour may need to know that they might push their employers to a level where they can’t afford.

This would give the employer the option of either hiring other workers or mechanising functions. Kenya needs to up productivity by improving the skills set of the already employed workforce. A structured programme would lead to minimal job losses and reward the most productive.