Editorial | Behind the labour force data
In this COVID-19 recession, last week’s labour force report that unemployment in July had slipped to only 12.6 per cent – territory in which it is familiar and from which it had only recently escaped – may have suggested that Jamaica may have dodged the bullet.
We are, however, inclined to mute the celebration and hold the applause. For behind that headline number lurks other data that should probably cause the Government to think seriously about how it might recast its coronavirus safety net for individuals and businesses, especially small ones. The pandemic, the numbers indicate, has a stinging impact on those who can least sustain its brunt.
Since the outbreak of COVID-19, the island has lost over 80 per cent of its income from its near-US$4 billion-a-year tourism industry. Bauxite mining and alumina refining, soft before the global recession, are limping worse. And the partial lockdown of the domestic economy aimed at slowing the spread of the disease has taken a toll on output and jobs. Many firms have furloughed employees or made them redundant. The Jamaican economy is expected to decline this year by almost eight per cent.
Against that background, the July unemployment figure – which was 4.7 percentage points worse than the 7.8 per cent for the same period a year earlier – doesn’t seem all that bad. Rather, it could have been a lot worse. The 12.6 per cent jobless rate, however, isn’t the whole picture.
What the unemployment figure of itself doesn’t tell is that in July, there were 81,000 fewer people in the labour force than a year earlier. It went down to 1,279,600, or six per cent less than the 1,360,800 in July 2019. Put another way, six per cent of those who wanted, and were seeking, work a year earlier had, for whatever reason, dropped out of the market.
At the same time, the 1,118,300 people who had jobs in July represented a decline of nearly 136,000, or 10.8 per cent less, than July 2020. Viewed differently, the 161,300 Jamaicans who were without jobs in July were 54,600, or 51 per cent, more than the 106,700 people who were jobless last year. Further, the participation rate in the labour force, the proportion of the working-age population in jobs or seeking work, dipped 3.9 percentage points to 61.3 per cent.
Neither Prime Minister Andrew Holness, Finance Minister Nigel Clarke, nor their key economic advisers could have found it pleasurable analysing this report. They would be particularly concerned about where many of the jobs have been lost and the implications thereof.
The ‘elementary occupations’ group, which encompasses many outdoor and often informal jobs, lost 39,000, or 23 per cent, of its workforce, which fell to 130,000. The ‘service workers’ and ‘shop and market sales workers’ shed 45,100 jobs, down 15.8 per cent to 244,000. These are sectors where employees are often own-account workers or independent contractors, with little or no employer safety net.
It would not be surprising if these groups are among the 35 per cent of Small Business Association of Jamaica (SBAJ) members that the organisation’s president, Michael Leckie, reported last week had gone bust under the weight of the pandemic. Several hundred of their employees have lost their jobs. Leckie called for a “stimulus” to help “boost the sector because working capital has been eroded and savings have been eroded”.
In May, after the Government offered a one-off J$100,000 grant to some small businesses with sales capped at J$50 million, this newspaper suggested that a follow-up round of accountable payroll support would probably be necessary, perhaps a government-guaranteed, efficiently managed special programme of loans for small businesses delivered via the Development Bank of Jamaica and the Export-Import Bank. Further, the administration must urgently consider what can be done, and in partnership with whom, to kick-start other sectors of the economy, which is important if the workers knocked to the curb by COVID-19, such as those highlighted in the labour force report, can find their way back without lasting damage.