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Ricardo Mateo, Professor of Law School , University of Navarra, Spain

How to increase the economic value of our work

Fri, 05 Nov 2010 12:03:04 +0000 Published in Expansion

Registered unemployment increased by 68,213 people in October 2010. According to the Ministry of work and Immigration, unemployment has increased again to 4,085,976 unemployed people. Unemployment figures are extremely high and dangerous for any Economics, but especially for the Spanish one that works by burdening workers with the social and pension costs of the whole system.

When unemployment rises, they are telling many people that their work is no longer competitive in the market and that it is better for them to do something else, because the business is not able to make their effort profitable, with the products and services it offers. In addition, they are telling us all to take care of our work, since companies must obtain resources from the market. There is an exception for people who work for the administration, since they receive their salary from the taxes collected by the State, many of which come from workers' income.

Clearly, there are two urgent measures to solve the problem. The first is to reduce the costs borne by companies as a result of the welfare system and which make work less competitive with respect to other economies. The second is that everyone works better and manages to get the most out of their performance.

The work in an organization, understood as the result of a paid human activity, must generate an economic value greater than its cost, regardless of whether I do it for the business Private or for the State.

The economic value is composed of a series of standardized activities performed by the person and the improvements that can be incorporated into the organization. In any Economics, but especially in one like ours, if a worker performs the standard with perfection and is able to improve the standard, we will have a worker of great value. In addition to working well, he will allow us to improve and this will generate economic value for us in the future. It is difficult for a business to do without such a worker. On the contrary, if we have a worker who finds it difficult to go to work, complains regularly, does not contribute improvements and makes many mistakes, it will be difficult for business to make his performance profitable. Evidently, when unemployment increases permanently, the market is telling us that we work worse than others, that we do fewer or less valuable things but that our work is undervalued.

We need to work better, we need to do it with perfection and we need to do it with the end customer in mind. Anything away from this will lead to more unemployment, except for people who are guaranteed employment by law. However, for them, there are also problems, since the state only guarantees that it has the capacity to extract from the market the necessary resources to carry out its activities, but it cannot guarantee that the market will generate the resources it needs.

Here comes the second problem of the labor market, the amount of costs that companies must assume to give work and that are inefficient and independent of their activity. For example, the social security contributions are very high because they go to pay the costs of a society that is very supportive but that taxes the work and thus makes it less competitive. It is necessary to take care of the cost of work as well as its economic value. The combination of both can generate improvements in competitiveness. The health care costs of people who have not contributed or the pensions that do not correspond to contributors should not be borne by work. It is essential to make work profitable so that it can be competitive.

Considering that the goal of any organization is to satisfy its customers better than its competitors do, and that to do so, it seeks to produce and serve with quality, reducing costs and time submission. We can affirm that it is easier to achieve this goal, when people have understood that work is, in reality, a means to seek and achieve perfection in their daily activities. But also, when the State has understood that it cannot burden the social invoice on the people's work , since this, in the end, harms everyone.