Is unemployment still a major concern?
ncreased unemployment was one of the major negatives from the global economic recession that affected most countries, including Barbados.
The private sector has shed thousands of jobs since 2008. Government too, has reduced its workforce, most notably through the retrenchment of 3 000 last year. The negative outlook for employment is expected to continue for as long as the economy takes to return to a sustainable growth path.
While in some ways the unemployment situation is in Barbados’ hands, a significant factor contributing to the outlook is the unemployment of major trading partners like Britain and the United States (US). Any increased employment in these countries and resultant increased spending by consumers usually has a positive spin-off here – especially relation to tourism and investment.
In the case of Britain, it was reported this month that the jobless rate decreased to 5.4 per cent “in the three months to August”, down from 5.5 per cent in the previous period and the lowest since March to May of 2008. While the employment rate reached the highest on record, pay growth was slightly below expectations.
There were 1.77 million people employed,
79 000 fewer than for March to May and
198 000 fewer than the same period last year.
Tradingeconomics.com stated: “There were 31.1 milion people in work, 140 000 more than for March to May 2015 and 359 000 more than a year earlier.”
From a tourism point of view this could be good news for Barbados in the upcoming winter season. More employment in the UK means more disposable income for its nationals and possibly increased travel to popular destinations like Barbados.
In the case of the US, it was reported that employers cut back sharply on hiring last month and added fewer jobs in July and August than previously thought, which was seen as a negative for a labour market that was improving steadily.
In September, the US economy added
142 000 jobs, and the unemployment rate was 5.1 per cent. These figures were affected by the job cuts of manufacturers and oil drillers, but tempered by the fact that some Americans have stopped looking for work and hence are no longer counted among the unemployed.
The International Labour Organisation and United Nations Economic Commission for Latin America and the Caribbean have predicted that unemployment in Latin America and the Caribbean would be 6.2 per cent this year, compared to 2014’s six per cent. This, however, depends on how the regional economy performs by the time the year ends.
The two organisations said the fact that the region’s economic performance remained below pre-crisis levels meant job creation and labour demand would be weak. They also predicted a decline in urban employment for the third consecutive year. In light of these challenging conditions, they suggested a need to focus on poverty reduction and income distribution.
One of the challenges Barbados has encountered, and will continue to have to overcome, relates to provision of unemployment benefits through the Unemployment Fund administered by the National Insurance Scheme. The fund had to be topped up by Government earlier this year, via a supplementary.
All indications are that unemployment will continue to be a challenge facing Barbados heading into 2016, even if there is some temporary relief through the jobs expected to be created by construction projects mainly in the tourism industry.
The issue is expected to be addressed when the Central Bank releases its latest report on the economy tomorrow.
