By Dashan Hendricks
The latest report on the state of Jamaica’s labour force is out and it brings both hopes and challenges for the new government that took office in March.
The big number everyone looks at is the unemployment rate. The data which the Statistical Institute of Jamaica (Statin) says contained information based on data collected during the period April to June 2016, show unemployment at 13.7%. That's an uptick from the 13.2% it was for the April quarter of 2015. There is however more behind the numbers.
Unemployment did not tick up because more people are losing jobs than those who are finding them. In fact, the data show that more than 40,000 net new jobs were created between April 2015 and April 2016. The reason the jobless rate went up despite thousands of new jobs being created is that more people decided to become active seekers of jobs. In other words, the labour force grew faster than new jobs were created. A rough calculation shows that, if the labour force had remained static, with the same number of new jobs being created, the unemployment rate would have declined to 10.1%. But nothing remains static. The only constant is change.
But what has led more people to seek work presents the challenge that the government should relish. The plain and simple fact is that people who previously snubbed seeking a job will only do so if they believe they can get one. In other words, the labour force grew because people believed they will be able to get a job. That much was shown in the last business and consumer confidence reports which show confidence in the economy at historic highs. Recall, you are only counted as being part of the labour force if you are either working or actively seeking a job. Those who were actively seeking a job numbered 185,000. That is how many people are counted as unemployed. The number of persons employed amounted to over 1.1mn.
So what must the government do to ensure people who exude confidence in the economy are not disappointed? It must create the opportunities for jobs to be found. It is for that reason I believe Prime Minister Andrew Holness created the super Economic Growth and Job Creation Ministry and appointed an Economic Growth Council. While that ministry remains a misnomer, because the purpose of the whole cabinet should be economic growth and job creation, the specific naming of a ministry to do so, shows he's keenly aware of what's at stake.
Targeting the tourism and the business process outsourcing sectors will create numerous jobs. It is not a bad target. People need jobs and not just the 185,000 who are unemployed, but a good chunk of the 735,000 people who decided that it was not worth seeking a job and so are not counted as part of the labour force. In the campaign leading up to the election, Mr Holness promised to create 250,000 jobs. His success will be the success of the country. But it must be the first stage. The next stage must be creating jobs with living wages. For the most part, however, that won't be realised until the mass of unemployed is reduced to more "tolerable" levels. It won't be realised until the skill sets of Jamaicans are improved to make the persons holding those skills more valuable. It is for that reason that the Ministry of Education must become active in helping to direct people to the jobs of the future. Too many are reading for degrees, for which, according to some studies, there will be no job in the next few decades.
That's another discussion though which I will pick up on in future articles. Suffice it to say that, while I do not believe in encouraging people to study things they are not interested in, many will benefit from being advised about their future job options. It will also be imperative for the country to decide what kind of future it wants and advise students to study subjects in that area. That will go a long way in solving the unemployment problem in Jamaica.
Dashan Hendricks is RJR's Group Business Editor