Management of Pay in an Ailing Economy: The Impact of Wage Fragmentation on Industrial Conflict (1975– 2000)

Copyright © 2013 by Gladstone F. Greene, Ph.D.

Library of Congress Control Number:               2013906645

ISBN:                 Hardcover                      978-1-4836-2477-8

                           Softcover                        978-1-4836-2476-1

                           Ebook                             978-1-4836-2478-5

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Rev. date: 09/03/2013

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Contents

Introduction:   History and Development: A Brief Background

Chapter 1:       Review of Literature

Chapter 2:       Planter Strategies and Their Impact on

Pay Practices on the Sugar Estates

Chapter 3:       Work: The Production Process and Elements

of the Wage Payment System within GuySuCo

Chapter 4:       Worker Discontent and Managerial Response at GuySuCo

Chapter 5:       Reducing Industrial Conflict through Incentive pay in GuySuCo

Conclusion

Bibliography

Index

Introduction

History and Development:

A Brief Background

The history of sugarcane in the Caribbean and indeed in areas in which it was cultivated has been associated with successes, failures, and slavery (Webber 1931). According to this writer, the earliest crop was first grown in the South Pacific islands. From there, the writer records that migrants carried the plant to India, to the North Pacific, and then to Hawaii around 1,400 years ago.

There is some agreement among some writers, including Webber and V. T. Daly (1974), on two main issues. First, that India was the region in which sugar, in a dry granular state, was first prepared. Webber records that the Chinese learned the art of sugar making from India about AD 600-650 but developed the art of actually refining sugar (using ashes) from the Egyptians at a much later date. The second area of agreement among the authors is how the sugarcane crop reached the Caribbean area. Da Costa (1994) records that in the period of Portuguese and Spanish expansion, the crop was taken to the New World in 1493 during the second voyage of Columbus. Webber argues that it was the Spanish conquistadors and Portuguese donators who were mainly responsible for the propagation of the crop in the New World.

Payne (1976) suggests that, during this time also, the increasing use of sugar spread throughout Europe and increased the demand for the product tremendously and placed it at the top of the list of staple foods. At precisely what point was sugarcane introduced into Guyana is not quite clear. Vere T. Daly (1970) refers to 1637 as the year when a certain Jan Van der Goes sent two kegs of sugarcane syrup to the Netherlands. However, there is evidence (in Daly and others) that the techniques of large-scale sugar production did not come to Guyana until 1658. The historians seem to agree that settlers who remained brought these techniques in the Pomeroon and Essequibo regions of Guyana in the late 1650s (Daly 1970, 67-68).

It could be argued from the evidence contained in these works that the Guyana sugar industry had its early beginnings around 1658, when, under the aegis of the Dutch West India Company, four plantations were established in the Essequibo region and later in the Berbice and Demerara colonies. Payne notes that in 1661, the first consignment of sugar was dispatched from the Guyana colonies destined for Holland.

Da Costa (1994) observes that due to the unsettled times, the early plantations progressed slowly. Portugal, Holland, France, Spain, and Britain were all competing for colonies in the West Indies, and apart from the continuous movement of settlers, colonies frequently changed hands.

Estates were often attacked by privateers who would sail up the rivers and hold the estates to ransom. Thus, new settlements were confined to riverbanks, about thirty to fifty miles from the coast. This was due partly for fear of the pirates and also because of the high costs of emboldering and draining the fertile but low coastlands—a cost that the early settlers were not in a position to bear (Farley, 97).

In the more peaceful years following the Treaty of Utrecht in 1773, extension was more rapid, and settlements were encouraged on the islands in the mouth of the Essequibo River and the Ituribisi and Superaam Creeks. About 1741, during the Dutch occupation, Essequibo and Demerara were opened to all nations, on favorable terms, which included free land and ten years of freedom from taxes. This action attracted a number of British planters from Barbados and other West Indian islands to settle in the country and contributed to speeding the development of the sugar industry (Farley, 98).

According to Payne, by 1759, there were 120 plantations along the Demerara River and 200 on the east bank of the Essequibo. The main crop was sugar, but there were smaller areas under coffee and ground provisions. However, Payne contends that the inland plantations became increasingly unproductive, owing to years of continuous cropping with little or no attempt to maintain the fertility of the soil. The river soils therefore began to be worked out, and the labor became more plentiful; the river estates were gradually abandoned, and the planters began to invest in and settle on the coastlands. By the close of the eighteenth century, there were some 380 estates from the Corentyne to the Pomeroon—the original names, of which many of them are Dutch, persist to the present time (Payne 1976, 121-123).

In 1841, Berbice, Demerara, and Essequibo were eventually ceded to the British, and under their rule, the sugar industry in Guyana progressed so that ten years later (1851), these colonies produced some 12,214 tons of sugar (the maximum production of sugar under the Dutch was 4,152 tons in 1778) (Payne, 124). According to Daly, by the beginning of the nineteenth century, there were approximately four hundred plantations in what is now Guyana. The writer notes that the development of the sugar and its subsequent success were due mainly to the importation of large numbers of African slaves. The slave trade, which developed, provided the estates with cheap and plentiful labor and thus enabled the planters to increase production and profits (Daly 1974, 13-16).

The abolition of slavery in the Caribbean (1838), however, created a labor vacuum on the sugar plantations. This the planters attempted to fill by first importing small quantities of Chinese and Portuguese laborers, but these groups proved unsuitable for plantation work and failed to satisfy the planters’ demands. East Indian laborers from India were tried next, and they proved so successful that by 1851 organized immigration from India began in earnest (Nath 1970, 43; Mangru 1999, 11-12).

By the end of the century, sugar from the West Indies, which had been covered by a colonial reference agreement, came increasingly under a great deal of pressure. Prices began to fall because of the overproduction of beet sugar. Mandle (1973) observes that in 1896 the price of colonial sugar was barely half of what it had been in 1881, and the sugar industry, facing a crisis only paralleled by that following the abolition of slavery, was on the verge of extinction. Many estates in Guyana ceased to be profitable and were abandoned, while others were amalgamated into larger units to reduce costs of production.

Prices Received for Sugar during the Century 1835-1935

Prices Received for Exports of Sugar, Five-Year Averages

Source: J. Mandle (Temple University Press, 1973), 39.

Mandle records that there were 230 separate estates in 1829, by 1849 there were 180, and by 1896, the number had reduced to 64 (Mandle, 40-43).

A measure of prosperity returned to the industry especially during World War I, when Britain was cut off from its chief sources of beet sugar supply. However, the high war prices stimulated the production of this sugar in other countries as well, and faced with this additional competition, sugar prices declined again, reaching twelve pounds sterling per ton by 1929 (see table 1). But by the time the Commonwealth Sugar Agreement was signed in 1951, some security and prosperity had returned to the industry (Payne 1970, 97).

According to Payne, the period between 1960 and 1976 was characterized by increased agitation by active trade unions and intense political struggle, culminating in the 1962-1963 racial disturbances. These events have not left the sugar industry unmarked. The writer notes further that the main ownership of the industry during this time was concentrated in the hands of two London-based companies—Jessels’ Securities, which owned two factories and accounted for approximately 15 percent of total sugar production, and Booker McConnell, controlling 80 percent of the total sugar production. In 1976, pursuing a policy of owning and controlling the resources of Guyana, the state nationalized the sugar industry and set up the Guyana Sugar Corporation or GuySuCo (Collymore 1984, 67).

Booker Brothers, McConnell

& Company in British Guiana

Source: McDonald (Stabroek Press Ltd., 1987), 10.

Trade Union Development and the Sugar Industry

This subsection provides an overview of the development of trade unions and labor organizations within the sugar industry. It focuses on the nature of industrial activity and their consequences of industrial relations and production success of GuySuCo.

Together with political organizations, trade unions and other labor organizations have had considerable influence on the work attitudes and behavior of Guyanese. This influence, according to Despres (1967), operated on two levels. The first level involved the impact of trade unions on the plural character of the Guyanese economy, and the second relates to the extent to which trade unions have been used as a base from which union leaders have launched political careers.

With respect to the first, Despres observes that the organization of trade unions has reflected, quite naturally, the differential involvement of Afro-Guyanese and Indo-Guyanese in the urban and rural sections of the economy. Typically, the writer contends that industrial unions and those organized to represent urban workers have a large Afro-Guyanese membership. Afro-Guyanese leadership usually dominates these unions. Agricultural unions, on the other hand, have a large East Indian membership, and they tend to be dominated by East Indian leadership (Despres 1967, 115-117).

This scholar argues that under these circumstances and in conjunction with the political aspirations of union leaders, most unions have extended their activities to include the collective interests of these sections of the population from which they tend to draw their membership (Despres, 118).

The trade union movement in Guyana may be dated from 1919, when H. N. Critchlow, an Afro-Guyanese waterfront worker, organized the British Guiana Labor Union (BGLU). This was primarily to represent the interests of workers in Georgetown (capital city of Guyana), most of whom happened to be Afro-Guyanese. Soon, however, the union was taken over by Afro-Guyanese professional workers (e.g., doctors, lawyers, and civil servants), most of whom returned from overseas. These were active in public life, and their connections and education better equipped them to guide the union’s activities. Chase (1964) submits that it was generally accepted that officers of a Trade Union, particularly the president, ought to be big men with knowledge and experience gained from public life (Chase, 37-40).

Whether for these or other reasons, the trade union movement in Guyana, as in most underdeveloped countries, has been a major platform from which political platforms were launched. Three cases, which were identified earlier, were Edun, Latchmansingh, Cheddi Jagan, and Forbes Burnham (former presidents of Guyana) (Chase 1964, 75).

In 1937, Edun, an East Indian idealist with a political vision of a New World order based on the philosophy he called Rational Practical Idealism, founded the Man Power Citizens’ Association (MPCA). This was the first union organized to represent the interest of East Indian sugar workers. Edun became extremely critical of working conditions on the sugar estates, and his constant agitation, which included encouraging industrial strife, enabled the union to win recognition from the Sugar Producers’ Association (SPA) in 1940.

Trade Unions in the Sugar Industry