Graphic on unemployment pattern in Jamaica
Local statistical reports have highlighted employment creation as an important achievement, especially as it has supposedly taken place against the backdrop of low economic growth (1.4 per cent in 2006), a chronic current account (amounting to US$925 million for 2006) and a huge public debt load (debt to GDP ratio of 131.5 per cent in 2006).
Others, however, remain skeptical and still identify unemployment as the most pressing socio-economic problem plaguing the country. It is to these individuals that Portia Simpson Miller and Bruce Golding owe an explanation and a comprehensive employment creation plan that will propel us to greater levels of economic prosperity. Today we present some facts on conditions in the local and international job market, while questioning the manifestos of both political parties to find answers.
At the outset, we are pleased that there seems to be a clear understanding by the major political parties that a significant portion of Jamaica's labour force continuously fails to meaningfully contribute to growth and development.
In fact, during his 2006/07 Budget presentation, Dr. Omar Davies alluded to the reality that "... progress on construction projects will be constrained by the unavailability of adequate numbers of skilled workmen even whilst there remain significant numbers of unemployed or underemployed."
In other words, here was a situation where jobs were available but there were few people in the great swell of Jamaica's unemployed population who had the necessary skills to fill them. Another serious matter of concern is the disturbing demographic that shows the younger generation accounting for the largest share of unemployed individuals. Almost 60 per cent of the unemployed are between the ages of 14 and 24 years old.
Still another concern is an ever-evolving labour market that will continue to displace low-skilled workers employed in the agricultural sector (almost 1/5 of the employed population!). The questions then for the next government of Jamaica are: 1) how to train our young people for the jobs needed in today's labour market? 2) how to re-train those workers who will soon be displaced from their livelihood?
The answer to job creation in Jamaica has to be based on a number of factors some of which were identified by the Planning Institute of Jamaica in 2000. For the sake of space, however, we will look on three main factors: global trends, domestic trends and educational attainment.
"… the global market calls for employment creation predominantly for highly skilled individuals, especially in the fields of information technology, investment and financial services, engineering and general management."
It is obvious to us all that the local and global job markets have evolved considerably over the years. The new global economy has generally dictated a new pace to business, and all kinds of new needs.
An important development has been the introduction of E-commerce - a global electronic market where transactions occur 24 hours a day.
Telecommunications is another area which has restructured the needs of the labour market and is an ideal industry for Jamaica because of our proximity to North America, which draws on our advantages of language (we speak English) and low labour cost. It is estimated that investment in this area could see the creation of over 40,000 jobs in the near future.
The financial/investment sector in particular will likely see great changes in its services and delivery due to these changes in technology. Research shows that the medium term will see a reduction in equity financing as opposed to debt financing, a shift away from loan-based financing to other off balance sheet activities and a growth in customer base through improved services such as Internet banking and tele-banking.
In sum, the global market calls for employment creation predominantly for highly skilled individuals in the fields of information technology, investment and financial services, engineering and general management.
The domestic economy consists of a few sub-sectors which have contributed significantly to the Gross Domestic Product of the economy and have also employed a large section of the labour force. Most notable are the sub-sectors of the services industry which contributes an average of 68 per cent to GDP annually and employed over 728,000 persons in 2006. This is to be compared with Goods Production sector which only employed 394,000 workers for the same period. These findings give added impetus to the proposal that there needs to be more jobs in the services sectors or greater facilitation of micro business ventures for individuals who wish to operate within these areas. Further endorsement to this proposal is provided by the fact that Jamaica faces a high rate of displacement of jobs in certain industries and as reported, between 1991 and 1998, "… there appears to have been a redistribution of different occupational groups in self employment." Put simply: there is little if any future for unskilled labour in Jamaica.
Still, despite the appeal for further job creation in the services sector, the goods producing sub-sectors continue to offer numerous opportunities for small businesses in areas such as furniture manufacturing and food processing. Both political parties paid attention to the development of micro, small and medium enterprises. The Jamaica Labour Party wants to provide credit and technical assistance for these entities while the People's National Party plans to develop an extensive network of business development services through funding the Jamaica Business Development Centre.
Also, with announced plans for greater investments in health, education and training as development vehicles, the country could see the emergence of more jobs in both the education and health fields. Studies show that some of the main occupations that the country might need more of are: speech specialists, reading specialists, learning managers, special educators, educational psychologists and so on. The health sector could also see the creation of a number of occupations, particularly suited for the ageing population as well as those affected by lifestyle related illnesses.
Education and Training Patterns
The type and level of educational attainment is certainly important to the job creation process. It is, however, disappointing that over the last 15 years there has not been any significant increase in the number of students enrolled in primary and secondary schools. The most notable increase in educational enrolment occurs at the tertiary and university levels, which has been increasing steadily since 2000/2001. Over the last 16 years, the country has increasingly produced individuals who fall within the skilled and semi-skilled occupations. These findings indicate the need for ongoing job creation, especially for individuals that are semi- and highly-skilled.
What seems to be missing from both manifestos is an acknowledgement that job creation is neither easy nor cheap. There are over 100,000 individuals currently unskilled and unemployed and this does not include the present numbers of underemployed, which largely account for Jamaica's employment problem.
Neither manifesto offers persuasive answers as to what will be done for these people.
At CaPRI we have been engaged in a modelling exercise to estimate what it would cost to retrain Jamaica's unemployed to make them ready for the kinds of investment the parties propose to attract as well as how much investment would be needed to employ them.
Retraining would likely cost over $1 billion; however over $1 trillion of investment would have to be attracted to mop up underemployment. Just where the parties propose to get this from is unclear.
"Putting people to work" makes for good rhetoric. Actually, doing it will be much harder than the parties are willing to acknowledge.
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