Who Should Pay for the Expenses of Port Labor Rationalization?
The expenses associated with downsizing could amount to millions of dollars depending on the number of workers, levels of set compensation, and safety net components such as training and outplacement assistance. Many countries have recognized the convenience of reducing the workforce prior to private sector participation in state-owned enterprises, but offsetting the expenses related to labor reduction has been a difficult task for many governments, especially in view of pressing budgetary constraints. For the government of Mozambique, for example, the staff rationalization component, which included staff reductions of approximately 14,000, pension fund payments, staff redeployment, and social mitigation as part of the Mozambique Rail and Port Restructuring Project in 1999 was estimated to cost the government $50 million. Compensation paid to workers laid off in Chilean ports as a result of the deregulation of dock labor in 1981 amounted to a total of $30 million. Payments per worker a
