- RUDOLPH BROWN/CHIEF PHOTOGRAPHER
Recently, over 500 persons responded to a Sunday Gleaner advertisement offering job opportunities at a popular fast food chain.
Don Robotham, Contributor
THE KEY weakness in our current economic policies is not macroeconomic management. As should be obvious by now, the fabled alternative model of macroeconomic management has turned out to be just that - a fable.
International financial pressures are such that the present policies are the only ones which can be prudently pursued, no matter what any politician, government or opposition may claim.
Instead of wasting time on demagogic denunciations of macroeconomic policies, it is far more fruitful and important to discuss the questions of jobs. For, as Bruce Golding [the Jamaica Labour Party leader] has pointed out, for the past 15-20 years Jamaica has been experiencing a jobs famine. He says the People's National Party has only created 80,000 jobs in 15 years but he may be wrong. The net number of jobs created in the last 15 years is probably less than 80,000.
What to do about our jobs famine is the number one economic question in Jamaica today. It is also the number one social question since it is at the root of our crime problem. As pointed out in a previous column, male youth unemployment (rural and urban) is the chief cause of violent crime in Jamaica. In fact, Dr. Patricia Anderson, in one of her many studies, has shown that there is a noticeable tendency for these young males to leave the labour force altogether, which takes them out of the formal and even informal economy (and statistics) completely!
NOT BY GROWTH ALONE
The challenge facing us in the economy, therefore, is not simply one of economic growth. It is economic growth which generates a substantial number of jobs. Jobless growth is better than none but is not the answer to our problems. Investments, such as the current ones in the very welcome expansion of the bauxite alumina industry and the Spanish investments in tourism, make a major contribution to our NIR. They do not make a significant contribution to increasing formal sector employment. In a sense, they end up aggravating our social problems, actually increasing rural poverty and income inequalities while accelerating rural-urban migration to these job-scarce poles of relative prosperity.
Many approaches to the issue of generating more jobs in the countryside have been tried in the past, including the 'hundred village' (or was it towns?) programme of Edward Seaga, not to mention the Jamaica Welfare approach of Norman Manley and Land Lease under Michael Manley. In addition, various attempts have been made to develop manufacturing centres in the countryside. These have achieved some results but obviously have not got to the root of the problem. Indeed, in the 1980s Mr. Seaga seems to have implicitly conceded as much and shifted strategy to one of attracting low wage but job-intensive manufacturing to the towns while concentrating on high-tech but low employment Agro 21 in the countryside.
What this latter approach argues in effect is that the solution to the problem of rural unemployment and underemployment is, paradoxically, to be found in the towns. It is mainly by offering more employment opportunities in the city that rural poverty will be alleviated. This is not a matter of neglecting the countryside although it can lead to it. It is more a matter of recognising that the room for formal sector job creation on any substantial scale in any rural economy anywhere in the world, including Jamaica, is extremely limited. Therefore, while one must do all one can to improve rural infrastructure and services (education, health, pipe borne water, electricity, telephones, roads, sports, entertainment) this will never be able to stanch the rural-urban flow. We are back to the Arthur Lewis point about how to develop with unlimited supplies of (rural) labour.
JOBS CANNOT BE CREATED
The first thing we have to do is to disabuse ourselves of the popular notion that jobs can simply be 'created' and that what government needs to do is 'to build more factories.' In our desperation, these are the typical answers given by Jamaicans in polls which are not worth the paper on which they are written. As should be obvious by now, neither government nor the private sector can simply 'create' jobs out of nothingness. Jobs are a by-product of viable and profitable economic activities. Without the activities being viable and profitable any jobs so 'created' will very rapidly be uncreated!
The reason why we have not had much net job creation in the last 15 years is because of the need to deflate the economy after the massive inflationary burst of the early 1990s. But now that inflation is under control and we are on track to meet our budget deficit targets we must now pay detailed attention to jump-starting employment. This is not a simple issue and it requires detailed, careful and sober study.
I remain convinced that manufacturing must be part of the solution. Low skill (and therefore low wage) export manufacturing in Jamaica has run up against enormous obstacles, not the least of which are high costs and foreign competition from practically all over the world, especially China. In addition, some in Jamaica have argued against it for social and other reasons. Further there is the content danger of contamination with drugs and the ensuing red tape which combating this generates. On this basis some have come to the view that we must abandon manufacturing as a solution to our unemployment problems.
Of course, such arguments have merit but, as often happens, in Jamaica we may have taken them too far. If we do not seriously
re-focus on mass manufacturing for export how do we propose to address our high youth unemployment rate which is the economic and social root of our high crime rate? The emphasis being placed, all too fashionably, on developing a service economy will not yield the jobs on any conceivable scenario, unless these too are export services. We clearly need to revisit and rethink this issue as a matter of some urgency.
POOR MARKETING
Mr. Seaga rightly has raised the issue of poor marketing of our legendary agricultural 'minor crops' as they used to be called in the statistical publications. This is indeed a huge problem since many Jamaican businesses people have no idea how to make the strong export linkages overseas on a steady, firm and consistent basis. But there is an even bigger problem than marketing in the broadest sense. This is the problem of consistently high quality production supplied on time in the proper packaging to international standards. Chile does this sort of thing very well but we have not been able to do this in Jamaica, apart from a few well-known exceptions. The reason is that our technical level is too low and our supply of capable technical and management personnel too shallow. Being too thin on the ground with inadequate Jamaican technical talent was one of the problems in Agro 21 which was otherwise a valuable initiative.
BUREAUCRATIC COMPLACENCY
The dreadful bureaucratic complacency and red tape which any prospective investor faces also has to be experienced to be believed. Labour market reform, to make it easier to fire people, also must be considered seriously, despite the necessary resistance from the unions. Of course, another reason why our costs are so high is because our currency is overvalued. What about a devaluation to make our manufactured exports more competitive? These issues need to be soberly and factually discussed, minus the usual knee-jerk emotions.
The other issue is services, including export services (call centres and other outsourcing). One mystery in Jamaica is why there has not been a growth of more service sector employment in personal and related services. Why, with all the house construction, car imports and cell phone use, have we not seen a substantial growth in the number of plumbers, mechanics, electronics technicians and related occupations? Surely domestic demand for these services must be strong and growing?
A SUPPLY PROBLEM
This seems to be a supply problem. One explanation is the chaos in our education and training systems. The last time I looked at the data, the level of training of our employed labour force was abysmal, with more than 70 per cent not having any formal training in the job in which they were currently employed. The level of formal training and education of our employed labour force is no higher than the unemployed. This is a ridiculous situation which tells us a lot about why our productivity is so horribly low and why we had problems in Agro 21. We simply do not have an education system which is integrated into and responsive to our labour market in any systematic way. And this is our situation after more than 20 years of HEART!
If we are serious about improving the lot of our people, reducing poverty and getting a handle on the social roots of our crime problem, detailed attention to these tough issues is what we need. If a quarter of the attention which we pay to the Caribbean Court of Justice was paid to obtaining a detailed understanding of our employment bottlenecks we would be far better off.
Let us therefore shift the debate to this vital issue. Let us focus on the measures to relieve our jobs famine.
