THE ISSUE: Direct link to job creation
ONE OF THE FEATURES of the protracted economic recession that Barbados has faced is increased unemployment.
As economic activity contracted, businesses found themselves under pressure. The longer it has lasted, the more difficult companies have found it to source resources to keep their workers employed.
So that in the last six years hundreds of Barbadians have lost their private sector jobs, essentially becoming casualties of hard times.
And then came last year when Government followed suit, reducing the public sector by 3 000. As Minister of Finance and Economic Affairs Chris Sinckler explained when he announced the measure in December 2013, this was mainly due to Government’s effort to slash its fiscal deficit.
Reducing the public sector wage bill was deemed one of the major areas the state could cut its expenditure. In totality, both the private sector unemployment and the public sector retrenchment were the result of severe economic pressures that have still not let up.
One positive spin-off from all of this, as observed by some analysts, is the increased focus on self-employment in Barbados, loosely referred to be some as entrepreneurship.
Barbadians, many of them young, some of them close to retirement, have been searching for ways, a number of them successfully, to make a living being their own bosses.
But there is a view that while entrepreneurship will in many instances be the way of the future, there will continue to be a need and an expectation for Government, but especially businesses, to provide work for the majority of the population.
Much of this is tied to the formulation of sound economic policies, leading to economic growth, and the creation of more jobs. Based on the Central Bank’s recently released 2014 economic review and 2015 forecast, unemployment continues to be a problem.
“The average annual unemployment rate at the end of September rose to 12.5 per cent, from 11.2 per cent a year earlier, largely because of job losses from the fiscal consolidation programme,” Governor Dr DeLisle Worrell reported.
Sinckler is one official who has linked sound economic policies and, more importantly, economic growth, with a rebound in employment.
Delivering a statement on the economy in January last year, the minister said: “Government does not believe that we can cut or tax our way to stability and recovery. As we cut current expenditure to reduce the fiscal deficit and save the Barbados dollar, we must simultaneously increase investment in the productive sectors and enhance the foreign exchange earning capacity of the Barbados economy. The return of growth to the economy is crucial if new job opportunities are to be provided for our citizens.”
In a recent report on the topic of global economic recovery and job creation, the International Labour Organisation (ILO) said since the “great recession” the global jobs gap had increased by 67 million and that “in spite of positive employment gains over the past years, global unemployment is still high and expected to approach 208 million people by 2015 and 214 million people by 2018”.
It added: “The incidence of long term unemployment (which lasts 27 consecutive weeks or more) has increased in the majority of advanced and developing economies, while labour force participation rates have declined in most countries.”
The ILO also said increased employment was dependent on a rebound in economic activity globally, especially in “advanced economies”.
*Researched and written by Shawn Cumberbatch.