Wed | May 27, 2020

Jaevion Nelson | The Jamaican Government’s stimulus package

Published:Saturday | March 28, 2020 | 12:12 AM
Minister of Finance and the Public Service, Dr Nigel Clarke.
Minister of Finance and the Public Service, Dr Nigel Clarke.

The Government will give $9,000 per fortnight to individuals who lose their job due to COVID-19 for a period up to June, but some people are not pleased with the amount being offered.

On Tuesday, March 24, 2020, Dr Nigel Clarke, minister of finance, announced during the closing of the 2020-2021 Budget Debate that as part of the Government’s $10 billion stimulus package, they would pay $9,000 per fortnight to individuals who lose their job as a result of COVID-19 once they submit an application by the deadline.

Some persons, including Member of Parliament Dr Dayton Campbell, have raised concerns about the amount being offered in relation to the minimum wage. In a tweet, he remarked: “minimum wage is $7,200 (per) week. We all agree that is too low and the people need a livable wage! How then can the government offer $9,000 per fortnight and how can that be celebrated? What am I missing?”

It is critical that all of us understand that the money that will be given is not a replacement for the salary lost but simply an allowance to assist with some basic expenses as a kind of unemployment benefit to help people manage during this difficult time. Typically, these benefits are paid to individuals who are out of work and are looking for work and are largely available to those who would have contributed to the scheme.

Jamaica, as I understand it, does not have any formal arrangement for unemployment benefits. The 2006 National Employment Report, produced by the Planning, Research and Monitoring Unit of the Ministry of Labour and Social Security, highlights that under the NIS (National Insurance Scheme), workers are entitled to employment injury, disablement and disability benefits, but it does not make provision for unemployment benefits.

It would be good to know if this is the first time this is being done in Jamaica, and I would love if such a scheme could be finally institutionalised. In 2012, Richard Lumsden, head of the Planning Institute of Jamaica (at the time), said that the Government was considering providing unemployment benefits “for workers who are unemployed through no fault of their own and who are able to work, available for work, and looking for employment”.

WAS IT DONE?

The issue of unemployment benefit/insurance was to be explored by the Labour Market Reform Forum in 2012, and a steering committee was to be set up subsequently. In 2015, the Labour Reform Market Commission, a year after its establishment, said that it would submit such recommendations in 2016. Perhaps Minister of Labour and Social Security Shahine Robinson could apprise us as to whether this was done.

According to RJR News, the commission’s recommendations would be “a follow-up on the earlier efforts of the Labour Market Reform Committee, chaired by Professor George Eaton, which submitted its interim report in 1996”. The committee’s report, popularly called The Eaton Report, proposed 10 areas for reform. These included restructuring of the Ministry of Labour and Social Security, flexible work arrangements, training and education, occupational health and safety, and gender, among other things.

I agree that $9,000 is not a lot of money, but I am confident that it will go a far way for many persons who will be affected. Importantly, unemployment benefits are not equal to what someone was being paid when they lost their job. How much one is paid differs by country. The allowances in Canada, the United States, and the United Kingdom illuminate this quite clearly.

In the United Kingdom, the government provides a job seekers’ allowance to eligible persons of up to £57.90 for persons 18-24 years, up to £73.10 for those who are 25+ years, and up to £114.85 for couples. The maximum amount one gets for minimum wage there is £8.21 per hour or £328.4 for a 40-hour work week, but it can be as low as £3.90, which is the rate for apprentices (i.e. those who are under 19 years or 19 and over but in the first year of apprenticeship).

In New York, the minimum wage is US$15 per hour, or US$600 for a 40-hour work week. Unemployment insurance (as it is called in many places) ranges from US$104 to US$504 per week. In Canada, you get a maximum of Can$573 per week for employment insurance (EI). “EI benefits is 55% of your average insurable weekly earnings, up to a maximum amount”. As is the case in the US, minimum wage varies across provinces, but if you live in Toronto, you earn Can$14 per hour or Can$560 per week (40 hours).

Unemployment benefit provided

I was intrigued to learn that in the Caribbean, Barbados and The Bahamas provide unemployment benefit/insurance to individuals who are without work as well. Barbados provides 60 per cent of your weekly earning for up to 26 weeks, and the maximum you can get is Bds$603.72 per week. Minimum wage there is Bds$6.25 an hour. It was difficult to find information on what is provided in The Bahamas. However, according to NIB-Bahamas, “it is paid at a weekly rate of 50% of the unemployed worker’s average weekly insurable income” for up to 13 weeks. I am not certain what the maximum payment is.

Again, it is important to note that unemployed persons have to meet certain criteria to qualify for unemployment benefits. It is not usually given to everyone. You also have to contribute to it, and in some places, if not all, for a period of one year before being able to access the benefit.

The Government must be commended for the depth of consideration to the needs of the poor and vulnerable in our society. It is remarkable that though the stimulus for businesses will be for those who, according to the minister, “play by the rules”, the benefit to be provided to individuals will be for everyone who lost their job due to COVID-19, whether they are in the formal or informal sector and are marking statutory contributions.

A raft of measures has been announced by the Government over the last couple of days by a number of persons and entities. Some of them have missed many of us – even parliamentarians it seems. May I recommend that the Government put together a document that outlines these very clearly and disseminate it to parliamentarians, councillors, religious leaders, principals, youth empowerment officers, NGOs, community-development officers, and other stakeholders who can help in apprising people regarding the opportunities that are available to them.

Jaevion Nelson is executive director at Equality for All Foundation Jamaica and a human rights, social and economic justice advocate. Email feedback to columns@gleanerjm.com and jaevion@gmail.com or tweet @jaevionn.