Jamaica needs special employment tax

KEN CHAPLIN

Tuesday, January 17, 2012

IF there is anything the past JLP government and the new PNP government agree on, it is the need to create jobs, jobs and more jobs and maximise the condition for job creation by the private sector. The private sector has a responsibility to create jobs as much as government. It is in their interest. The sharp increase in unemployment, which can lead to increased crime, poverty and social instability - stumbling blocks to economic growth and social development - is one of the crucibles facing governance in Jamaica.

The problem of unemployment is not new. In the 1970s the administration, led by Prime Minister Michael Manley, implemented an employment programme which did not work well as many of the workers slept on the brooms distributed to

them to keep the thoroughfares clean, but it served the purpose of providing bread without butter to the unemployed and unemployables. In the ghettos, PNP dons who controlled most of the work shared some of the scarce benefits with JLP dons.

Some desperate young men and women who would not ordinarily sweep streets performed that function as Manley preached: "There is dignity in every type of work." I recall accompanying him to a slimy, rotten, garbage-filled gully in Central Kingston where he and hundreds of his followers did a massive clean-up. I remember one ghetto youth, desperate for work, telling me that he would even clean mess to earn bread. The need for jobs now is even more critical than in Manley's time.

Although one can understand the anxiety of the new PNP administration to provide jobs, it should not take money from the Jamaica Infrastructure Development Programme (JDIP) to provide jobs. The money has already been earmarked for much-needed projects in many areas, among them JLP constituencies. It is hoped that the government is not planning to repeat what the government of both parties did many years ago. The PNP administration stopped work on development of the Coronation Market and surrounding areas in the Western Kingston constituency of Edward Seaga. The programme was supported by an international financial institution. When the JLP became the government it stopped a housing project in Central Kingston, a PNP stronghold. I want to believe that the country has progressed beyond such partisan political oppression.

In any case, it is doubtful whether JDIP has the money left in its coffers to provide any significant amount of funds for the Jamaica Emergency Employment Programme, the vehicle the government hopes to use to provide jobs. Perhaps it can provide money for a start, but in the medium term there has got to be a sustainable employment programme, financed by a special employment tax.

Such a programme has to be well planned and approached in a methodical, scientific manner. For too long public works programmes have been undertaken in a disorganised manner. It is a long shot

from when public works programmes created such places like Tinson Pen and the Palisadoes Road. Briefly, what is needed is a survey in every community in Jamaica to determine how many young people are unemployed, what are their skills or lack of skills and their level of education. A system should be set up to channel those with skills into jobs with the support of employers. Those without skills should be placed in apprenticeship of their

choice. While they learn they should be paid an allowance. JAMAL should be reinstituted and those who are not functionally literate attend remedial classes.

A great deal of Jamaica's problems are caused by illiteracy. I once worked with ghetto gang leaders in trying to preserve peace in the Corporate Area, and the biggest problems in that exercise were caused by youth who could neither read nor write. Some of those without skills who could not be accommodated in skills training could be placed in labour-intensive work like road repairs. There are thousands of secondary and parochial roads in Jamaica that need to be repaired. In repairing roads they would be learning a well-needed skill.

Prime Minister Portia Simpson Miller opened herself to harsh criticism when she appointed one of the largest Cabinets the country has ever seen despite her fired-up criticism of the size of the JLP government's former Cabinet. The new government's Cabinet is 20, compared with the JLP's 18. In a time of financial constraints, it is my view that the Cabinet should not be more than 14. This was the first stumble by the prime minister. It is hoped that in the future her steps will be more measured.

PNP MP Fitz Jackson is one of the brightest and most experienced members of the House of Representatives and yet he was not appointed a full minister. Simpson Miller offered him a minister of state position which he flatly rejected. As usual, Jackson is not a man for controversy and would not give a definitive view on the issue. However, he appeared to have been kept in his place because he was a strong backer for Peter Phillips in the tussle against Simpson Miller for the presidency of the party which was won by her.

During a period of my journalism career in which I reported on Parliament, I found Jackson an outstanding chairman of one of the parliamentary committees. Fair and objective, he allowed everyone the opportunity to express his or her views fully.

It is a pity that Simpson Miller could not find a ministerial position for him. People in the PNP inner circle argue that Jackson is more capable than some of the appointed ministers.

POST A COMMENT

You must first register and then login to be able to post a comment.

HOUSE RULES

1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper – email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy, and before commenting you need to register, conveniently, by clicking the link above.

COMMENTS (22)

nervous investor
1/19/2012

We need to realize the difference between using smoke, mirrors and taxes within our local economy to move money from pocket A to pocket B (with consequences) and print money locally to make people "feel good" versus the more significant matter that we cannot print money that our trade partners will accept in payment for their goods and services. If we wish to continue to import food, clothing, metals, cars, oil and to make international phone calls - then we better EARN some trade-able gelt.

nervous investor
1/19/2012

... kind of like the Southern USA after the Civil War - cash money was a scarce thing - so people set themselves to operating on a shoestring rounding up cattle and gathering them into herds to send north to the rail heads to sell to markets in Chicago and New York where there was more cash money - those proceeds were not borrowed or printed they were EARNED through blood sweat and tears .... and in due course the West and the South grew ... and yes there was inward investment too ...

nervous investor
1/19/2012

.... as for Greece .... they have yet impose austerity (or even agree what it means) .... the cuts are yet to come .... they have been living fat and lazy borrowing the earnings of others to support their consumption ..... and here come Italy, Portugal Spain, Ireland and FRANCE right behind - and if the good old USA doesn't wake up it too will walk that path. Sooner or later there is no more money to borrow and people wake up to the reality that printing money is no solution .....

nervous investor
1/19/2012

One does not ONLY stimulate demand (for imports?) within an economy by borrowing money to spend; one leads that economy into a debt crisis down the road when the debt plus interest have to be repaid. The United States in the 1930s was a relatively debt free place I believe (I will research it further) so it doubtless seemed sensible to borrow large sums to spend into the economy on infrastructure projects for political benefit. For sure today's debt scene is VERY different here in Ja & there.

Meat Head
1/18/2012

Setting aside ideology, it is a tautology that private sector investment requires an expectation of demand. When unemployment is as high as ours, it shouldn't require rocket science to realize that demand will be low and that intelligent nervous investors will save their money. The stupid might invest - but they don't count. Therefore, the critical question for our economy is therefore, how to spur local demand. Govt. is best positioned to answer this question with their investments.

nervous investor
1/18/2012

The concept of Government creating jobs and looking after the masses is a derivative of paternalism (Daddy knows best and will provide all that we need). So the dependent folk look to "Daddy" to provide - and the argument is we NEED or we REALLY want it badleeee ..... or wouldn't it make things Soooo much better ........ Yeah right - but someone has to PAY for it ....
Don't you think it would be so much better to build a culture of "I WORKED AND EARNED it" as a nation ..... by exporting .....

nervous investor
1/18/2012

Govt being the provider of jobs has never worked - witness the former Soviet Empire, the uniform poverty (excluding the Politburo insiders of course) of Cuba and the resolution of China to (slowly) free up their former system which previously had resulted in the death of millions of people through starvation and otherwise - most starkly - witness the appalling situation in North Korea right now. Government CONSUMES it does not PRODUCE.

nervous investor
1/18/2012

One of the truest things that Reagan ever said was "In this present crisis, government is not the solution to our problem; government is the problem. From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? ..."

fall mouth
1/18/2012

@Tom Stroke, he might not stop the rastaman from burning coal, but he could encourage him to plant quick growing trees for the purpose and he could even foster the process by making hundreds of acres of unused government lands for the purpose, and provide help in whichever way. He could also come up with ways to ensure that the smoke is not let into the environment. Don’t tell me this cannot be done. A hundred years ago we couldn’t speak with people 1000’s of miles away.
And how come the snide remarks about loans from the Chinese and “handouts” from the Americans. I never heard this before from T.S..

Meat Head
1/18/2012

When the govt gives a tax break to people like me, I could buy an X6, which does little to stimulate local demand. I won't invest in a business unless there is an expectation of demand for the product. When govt. invests in the poor, they will buy food, clothing, etc., creating demand across a broad segment as @Bogle states, jump starting a dead economy like ours. In fact, we do know what happens when austerity is imposed on a bad economy - Greece is now in worse shape than before austerity.

diehardr sickheads
1/17/2012

I would prefer unemployment insurance the only problem is just like nht /jdip/jeep politician dip dem hand in it to mine the lazy hard core supporters.

Jair GM
1/17/2012

@nervous investor- Seriously you should do some research before making broad statements like "no
job program paid for by a tax is sustainable in the long haul." You are simply incorrect unless by long haul you mean a 100 years. I only need mention the WPA in the US circa 1940 but if you did some research you woudl find many others. Additionally, new research which coincidentally only came out a week or so ago shows the very opposite of what you said; Mark Wignal referenced it last week.

PL BOGLE
1/17/2012

The notion that "government can't create jobs" comes from the Reagan era and is now accepted as an indisputable "Truth" by conservatives. At the time it was a bit of political rhetoric, not intended to be taken literally. The point of that political slogan was that you have to focus on creating private sector jobs because those are the ones that produce the goods and services society needs. The bottom line is, the private sector does not generate sufficient demand to hire all those who are willing to work, and gov’t can’t raise taxes in a period of high unemployment, is not only counterproductive, it’s cruel.

PL BOGLE
1/17/2012

@Meat Head. I don't agree with you very often, but I must say you make some excellent points here. I'm 100% in agreement with you. "Silly me ..."

nervous investor
1/17/2012

@Meat Head II - Politicians and their politburo members ALWAYS enjoy disproportionate perks - that is all part of the Ponzi scheme - a couple people can tax a million people a couple dollars each and share it between the couple and they will prosper. sooner or later however the million taxpayers are so crushed that all will feel it. You seem to be one of those who think that if you take everything from the Forbes 400 that somehow the US deficit will be paid - WRONG.

nervous investor
1/17/2012

@Meat Head - tax comes from those earning money. As tax increases then prices paid by consumers increase, less activity takes place and there is less scope for expansion through internally generated earnings (aka profits). In due course the result is a collapsing economy with less and less entrepreneurial activity and fewer and fewer jobs. There are ways to fool the people for a time - one is by borrowing money and pumping it into the system - another by printing money like toilet paper; fail

Meat Head
1/17/2012

In the US, some Republican politicians are known to make stupid assertions when they think it is necessary to push their ideology of limited govt. So it comes as some surprise to see the same thing here, "no job program paid by a tax is sustainable ..." Interesting, but politicians/rulers have been paid from taxation for at least 10,000 years, what's not sustainable about that? I get it, it's only when the poor are the beneficiaries that there is a problem. Silly me ...

Tom Stroke
1/17/2012

Mama P has blundered badly with this large cabinet. What is clear is that positions were made available for the boys and girls. For example, what will Bobby Pickersgill do as minister of Land, Water, Environment and climate change? Will he be telling that poor Rasta man who burns charcoal for survival to stop the practice? Or, will he be lecturing the USA and China the big polluters in the world to cut down on greenhouse gases? In addition, if these countries do not adhere to Bobby, will he be leading a protest of not accepting another loan to fix roads from the Chinese or handouts from the Americans? Do we really need a minister solely for youth and culture? Also do we need a minister that is responsible only for mining?

Beresford Davidson
1/17/2012

All of them PNP politicians are good salesmen and women at pushing a six for a nine. They are incapable of developing any program of substance from zero.

Hotta Fire
1/17/2012

Ken Chaplin nuh have nutten fi seh

nervous investor
1/17/2012

What nonsense. NO job program paid for by a tax is sustainable in the long haul. Inevitably this would be yet one more nail in the coffin of the risk takers and thus one more rung DOWN the ladder into a pit.

wanda woeman
1/17/2012

Everybody deserves to be full minister or should have been minister and when the cabinet is announced then it is too big. Without doubt Mr. Jackson could have been full minister, so too could have Lloyd B who would have done well in the west with this responsibility.
This is one of the problems with such an overwhelming majority and so much talent . It is like having a wedding reception for 100 guests. There are always people who could have been included but are not, or were overlooked.

Do you feel buying into Facebook now is a good investment for the long-run?
	Yes
	No

View Results
Results published weekly in Sunday Finance

Username:
Password:

GCT to go down, white rum prices going up

Jamaica needs special employment tax