A business rescue proposal

We are living in particularly difficult times, atypical times that require extraordinary transitory solutions. The Government has a titanic task to save private enterprise as the engine of the Colombian economy. This task is not easy and requires speed and determination.

In the last few days, multiple circulars from the Ministry of Labor have become known, stating that the suspension of labor contracts and collective dismissals are prohibited and inviting companies to make use of other extraordinary mechanisms to preserve work such as telework, flexible working hours, early vacations (accumulated or collective) and unpaid leaves of absence. In addition, it has said that labor decisions made by employers will be supervised during the health emergency presented by COVID-19.

It cannot be claimed that, in the face of this economic and social calamity, the responsibility for the preservation of employment should fall on private enterprise, especially when it is the one that has been most harmed by the closure. If it is to be preserved, the Government has to allow the substantial reduction of the labor force so that the companies can reach a sustainable cost level that allows their preservation. Otherwise, all companies in Colombia would be destined to disappear and only chaos and misery would remain.

The proposal then is as follows: that private enterprise be allowed to massively suspend or terminate labor contracts and that these suspended or dismissed persons immediately become employees of the State with a salary that allows their subsistence (minimum living wage). Given their status as employees of a state agency, their job would be to remain in their places of residence (to contain the contagion), educate their children in their place of residence, take care that public order in their neighborhood is preserved by permanently alerting the control authorities and serve as community leaders to overcome this calamity.

Of course, this massive hiring will cost a lot of money, but for this the State has reserves and international credit lines and can, as a contingency measure, make use of the resources collected to date by the Family Compensation Funds, the Chambers of Commerce and other entities that receive and have received (during normal times) payments from the business community.

Big problems require big solutions. It is useless to place private industry as the guarantor of the preservation of labor if this will necessarily lead to its extinction.

The president of El Salvador contracted all the restaurants in the country to continue operating and supply food, via home delivery, to the neediest people. This measure leads to the preservation of employment and the containment of hunger, which would be a source of chaos.

We need urgent and shock measures, and this may be one of them.