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A social and economic storm is brewing!

Vinnette Hall

Wednesday, January 13, 2021

WITH only just over a week into 2021 we look back on a year that saw many of us adapting, whether willingly or unwillingly, to what many phrased in 2020 as the new normal. The novel coronavirus pandemic has brought with it many challenges, yet, for those visionaries and risk-takers amongst us, they view this disruptive change as opportunities for the taking.

With some economists predicting that global economies are unlikely to rebound before 2022, it is clear to see that a social and economic storm is brewing.

Lockdown

The startling difference between the 2008 Global Recession and that of the economic fallout brought about by COVID-19 is one of lockdown. This extraordinary measure, used to curtail the spread of the virus, resulted in the closure of non-essential businesses. This was followed by rising unemployment, school closures, manufacturing deficits, reduction in passenger air travel, and many businesses shifting fully to an online platform as they steered through this new normal.

What is uncertain is how much longer governments across the globe can continue to impose such rigid measures as lockdowns and curfews before those most affected begin to challenge the very system that seeks to protect them.

Rising unemployment

Jamaica, like many countries in the Caribbean region, has not been spared. In January 2020 the country recorded a national unemployment rate of 7.3 per cent. By July this figure had almost doubled to 12.6 per cent. The global phenomenon has erased the growing downward unemployment trend in a matter of months.

The strategies put in place to reduce youth unemployment showed positive results in October 2018 at 24.1 per cent, and the corresponding year October 2019 at 21.1 per cent. However, youth unemployment did not escape the clutches of the pandemic and, in July 2020, rose to a staggering high of 30.4 per cent, as per reports from the Statistical Institute of Jamaica (Statin). This is two times that of Jamaica's national unemployment rate.

Unemployment

(1) The informal economy and the need for human development

The informal economy is frequently characterised by a lack of labour rights and social protection for employees with low education and skill training. President of the Jamaica Chamber of Commerce Lloyd Distant Jr pointed out that these workers are at greater risks of economic shocks in the marketplace.

Statin reported a total of 1,279,600 people being in the labour force, with 806,600 outside of the formal labour market in July 2020, as they typically make up the informal economy. With over 60 per cent of those of working age and employable classified outside the labour market, if Jamaica desires to compete as a serious contender in the global arena, significant emphasis is needed in the upskilling of those in the informal economy.

Notwithstanding, greater accountability should also be placed at the feet of those employers who elude compliance of the law. It is apparent that this long-standing issue should be tackled sooner rather than later.

Prior to the pandemic, the smooth transition of school leavers into the labour market was always a huge concern, with many school leavers having deficiencies in their education. Boys, in particular, from low-income communities are most likely to drop out of school. The global pandemic has exacerbated this issue, and with some schools still not cleared for face-to-face teaching and Internet access still not an all-island reality such vulnerable students are at even greater risk of dropping out, and this a grave cause for concern.

With there being a strong correlation between this and unemployment, as well as with crime and violence and low education/skills training level, a more strategic and collaborative effort is needed to reach these youth before they become unattached from the labour market and the education/training sector.

Changing of the guard

Like many Caribbean nations, Jamaica's economy is largely reliant on tourism, with almost 70 per cent of stopover arrivals coming from the United States of America in 2019, reports Jamaica Tourist Board figures. The fallout from the tourist sector due to the pandemic has led to significant job losses in the economy overall. Yet, what is needed at this time is not a wait and see attitude — as clearly, we have seen in the past few days that the USA is faced with its own internal struggles. But what this state of affairs requires are proactive steps in anticipating any further fallout that may come in the form of food shortages and that of vital goods and services to the island. God forbid it should come to that!

But the pandemic also provides a golden opportunity for Jamaica to position itself in scaling up its agriculture and manufacturing capabilities; hence, supporting our local fisheries and farmers in preparation for any serious economic shocks is paramount.

In defeating these social ills and economic challenges which have been worsened by the global pandemic it requires a concerted effort from all Jamaicans as we manoeuvre uncharted waters. It also requires a new mindset that challenges us to not just “think outside the box”, but to embrace new opportunities and seek out new strategies in finding solutions. And, finally, it will demand a united and resilient Jamaica if we are to be successful in 2021 and beyond. 

vinnette.hall.14@ucl.ac.uk