EDITORIAL: Pursue policies for job creation

“FORECASTS of real GDP attract a lot of attention, but what matters more to the person on the street is how growth translates into jobs. Unfortunately, the mediocre growth outlook of recent years may lead to a disturbing outlook for jobs.”

 

This quotation is taken from a recently published assessment of the global economic recovery and what it means for job creation in both advanced and emerging market economies. The assessment was published on an International Monetary Fund (IMF) blog. Important enough is that it does not reflect the views of the Washington D.C.-based international institution. However, it has given enough food for thought and outlines what can be expected going forward where countries strive to emerge either from the clutches of the lingering recession or from the crisis affected by the falling oil prices.

 

One of the things that has bedeviled countries growing after a recession is that the growth is jobless growth: meaning that while GDP has expanded, unemployment remains either flat or is growing. It is very depressing when this happens and can be very frustrating to people who want a job but are unable to find one even when the economy is growing. Attention was focused in particular on Latin America and the Caribbean. It is revealed that in 2016 unemployment in this region is expected to be nearly eight per cent of the labour force, at least two percentage points higher than it was two years ago. This sharp rise is driven by recessions in large economies in the region such as Brazil.

 

Elsewhere many economies are growing modestly, thus limiting the labour market deterioration. As is further pointed out, restoring the labour market in Latin America and the Caribbean requires a return to stronger growth as well as more targeted measures to tackle barriers in the creation of private sector jobs.

 

If the case of Barbados is assessed, it will be shown that unemployment at the end of last year was 11.8 per cent based on data published by the island’s Central Bank. This is compared with the 12.3 per cent rate of 2014. A worrying sign that was also highlighted by the Bank was the fact that labour costs were estimated to have risen by one per cent per year since 2008, while there has been no perceptible increase in productivity. As a result, it added, the large gap between unit labour cost and output per worker persists.

 

In other jurisdictions across the Caribbean unemployment remains a worry. In Trinidad and Tobago there has been a spate of job losses. It is believed that situation stems from the hiccups which the economy in the twin-island Republic is experiencing. There are a couple other states which too are seeing unemployment trends increasing. For the Caribbean as a whole the job market is expected to increase once students have completed their schooling and training from educational institutions. 

 

The answers as revealed earlier seemed to be based on stimulating economies to the point where opportunities are being created for job creation. Governments alone cannot do it and the private sector will only do so once the climate is ripe for new investments. All that can be said therefore is that creative policies have to be pursued.