When the Jamaica unemployed fell to the lowest level on record to 4.5 percent in April this year, it was falling precipitously by more than six times from the levels that were at unhealthy and chronically high of 24 to just under 28 percent between 1977 and 1989.
Jamaica’s record low unemployment at 4.5% in April 2023.
The April 2023 outcome is down from 6 percent in April last year and from 6.6 percent in July 2022, while the number of persons employed is at its highest level ever, with the total number of employed persons at 1.313 million in April this year. The highest level of employment before was 1.27 million in January 2020. Knowledgeable persons have expressed their views on the numbers, with one suggesting that Jamaica has always had a low level of unemployment. That is entirely at variance with the facts; see chart.
The country has only experienced rates below 15 percent for a few years, primarily after 2007.
There has also been some focus on the number of hours used to determine whether persons are included in the employed pool. What has not been acknowledged by critics of the low unemployment level is the many businesses finding it more difficult to recruit workers to employ, as well as the need to increase wages to retain those they have. Finding workers going forward is going to be a real challenge and one that will cause companies to look carefully at their operations to see where they can employ cost savings methods to deliver goods and services with minimal dislocations. If the economy continues to expand, it will result in workers coming in from overseas.
When Jamaicans start to pump gas for their vehicles, it will dawn on us that things have changed and that development is only a few years away.
Jamaica’s employment rate has been pushed by the considerable focus on tourism expansion and the advent and rapid expansion in the BPO sector that now employs around 5 percent of the workforce, with the numbers employed said to be over 60,000 and addition a sharp increase in construction activity for residential and commercial demand lifted employment in that area.
Data compiled by ICInsider.com from the Bank of Jamaica, the World Bank and Statin show that unemployment averaged 25.8 percent between 1977-89. The rate fell in 1990 to 19.1 percent and 15.7 percent in 1992 and remained around 15 percent until 2006, then fell to 11.5 percent in 2007 and 11.3 percent in 2008 and 9.9 percent in 2009 before reversing back up to mid-teens up to 2015 and had slowly drifted down since with the exception of 2022 when it climbed to 10.7 following the economic fallout from the Covid19 pandemic.
The buildup comes against a huge selloff of US dollars by dealers in the market between January and March, but the bulk of the increase did not come from normal inflows, information provided to this publication by Bank of Jamaica (BOJ) indicates. BOJ, in response to ICInsider.com enquiry as to the source for the increase, states “the growth of approximately US$303 million in the NIR for the month of March 2021 was mainly influenced by government-related receipts of approximately US$217 million; of which, US$175 million represented multilateral loan inflows from the World Bank and the CDB. The remainder of the inflows were received from authorised dealers and Cambios, under the Bank’s Surrender Arrangement.”
