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Bleak jobs forecast - PSOJ

Published:Sunday | May 2, 2010 | 12:00 AM

Avia Collinder, Business Reporter

The Private Sector Organisation of Jamaica (PSOJ) is not holding out much hope that its members or the government will be able to create a significant number of jobs in the near future.

A PSOJ economist has thrown out the window the possibility of a return to the 1980s-style job spurt from the apparel export, construction and financial services industries.

But despite the gloomy outlook from the private-sector body, one member organisation, GraceKennedy Limited, is undertaking an agri-business initiative designed to channel laid-off wor-kers into their own business ventures, including in agriculture, no doubt as providers of services and raw materials for the company's global manufacturing and distribution business.

"This time around, it is difficult to say now which sectors will be the leading drivers of the economy in terms of job creation, though one expects that as the global recovery gathers pace, we might see some rehiring in bauxite mining and construction," Omar Chedda, the PSOJ's research and policy development adviser, told Sunday Business.

More job losses

The economist added that while most of the recession-induced job losses had already occurred - amounting to about 40,000 up to November 2009, according to government figures - the private sector is still poised to send home more workers.

But, this is likely to arise through attrition, Chedda said.

The good news, for Alrick Campbell, productivity specialist in the research unit of the government-run Jamaica Produc-tivity Centre (JPC), is that while more job losses are on the horizon this year, the employment downturn should be on a smaller scale than experienced in 2009.

He noted that the Government's lowered revenue target for the last fiscal year resulted in expenditure cutbacks which affected some capital projects and threw workers out of jobs.

"In closing the Budget gap, the Government has increased taxes, but this also has the ripple effect of slowing down the demand for goods and services further, constraining the possibility for economic growth even more," Campbell said.

But at least one big employer is upbeat.

GraceKennedy, a PSOJ member, is hopeful that agriculture could prove to be a possible source of significant employment in the medium term.

GraceKennedy is among companies which have created entrepreneurial opportunities for former employees in industries, including agriculture. Businesses have also been spawned by outsourcing services that may require technical skills and expertise in areas such as warehousing, distribution, customs and logistics, information technology and human resource advisory services.

Dr Cassida Jones, chief human resource officer at GraceKennedy subsidiary, GK Foods, and Orville Palmer, the conglomerate's food division's agri-business development manager, agree that recent reductions in interest rates, coupled with the Government's drive to substitute imported foods with locally grown crops, are conditions which now make the industry more attractive to investors.

"The recession has forced many companies to retrench their employees, many of whom are now turning to agriculture as a source of income," the GraceKennedy officials said.

"For agri-business to grow, much will have to be done beyond 2010-11, inclusive of the provision of more incentives for investors to put their money into agro-processing," Palmer said.

His colleague, Dr Jones, has pointed to the need for the reintroduction of academic and practical training in agriculture to boost the industry's employment prospects.

"We have lost a generation of young people in agriculture, and so there is the need to have this void filled. Since money can be an effective motivator, such programmes should be structured with a profit-sharing component so that the students benefit from their labour input on school farms."

Jones is suggesting that remuneration in the agriculture sector be performance based.

Improved profitability

"This should enhance profitability and ultimately generate further employment, as organisations expand due to improved profitabi-lity," he said.

But the low-income nature of agriculture jobs is a concern to the JPC's Campbell, who has acknowledged that the sector has experienced one of the highest growth rates since the onset of the global recession.

"Using 1996 prices, in 2007, the average worker in the agriculture sector earned around J$28,231, representing only 26 per cent of what the average working Jamaican earns," he said.

"What you don't want is a situation where a significant proportion of the labour force is employed in these low-income and low-productivity jobs. In such a situation, there needs to be a systematic way to reallocate resources to higher-productivity areas through education, training, and the adoption of new work practices."

With high productivity levels, he said, businesses are able to pass on productivity increases in the form of lower prices for goods and services to consumers, and higher wages to employees.