PORT OF SPAIN, Trinidad — While partial reopening of Caribbean economies is showing some immediate signs of socio-economic recovery from the novel coronavirus pandemic, reduced output, export and fiscal space continue to take a massive toll on regional labour markets according to a recently released report from the International Labour Organization (ILO).

Estimates produced in September 2020 (not necessarily robust following the fourth-quarter (Q4) developments in Caribbean and tourism-originating countries), suggest a gradual recovery for the Caribbean labour market during the third quarter (Q3) of 2020, although losses remained high. Despite a reduction between the second and third quarter of 2020, work hour losses were expected to remain high at 12.8 per cent (in line with the global average of 12.1 per cent). This is, however, substantially lower than the combined average of 25.6 per cent for Latin America and the Caribbean (LAC).

Similarly, 1.87 million full-time equivalent (FTE) jobs were expected to be lost in the Caribbean following the beginning of the pandemic (against a total of 345 million FTE jobs worldwide and 60 million for the LAC region).

Recovery can be imputed to the partial reopening of the tourism sector starting from June 2020, which provided immediate relief in certain countries. This reflected in an increase in hours worked and – most likely – the number of people employed. If the experience of past shocks is to be repeated, those who may benefit first from the recovery are longer-tenured workers who lost employment when the crisis kicked in

Survey and administrative data for the first quarter (Q1) and second quarter (Q2) of 2020 suggest that – depending on the country – both unemployment and the proportion of people out of the active labour force have increased. While differences by gender are not necessarily consistent across all sources, youth have most likely been impacted disproportionately relative to the rest of the working population (surveys from Grenada, Jamaica and Saint Lucia confirm a spike in their unemployment rate).

In any case, evidence suggests a polarisation of the impact: some workers bore the biggest burden while others maintained employment or at least a reasonable degree of labour market attachment. Self-employment seems to have not played the traditional role of buffering the impacts of the crisis. Additionally, there is not enough evidence to conclude whether informal employment provided a cushion. As expected, at-risk industries such as retail, trade, manufacturing, accommodation and food were the most impacted.

“Despite limited, available evidence it is important to have a clear idea of the number of people affected as well as the modality through which they were impacted. A reduction in the number of hours worked accompanied by a limited reduction in income has substantially different implications than, say, being dismissed and not being able to find any alternative employment opportunity due to plunging labour demand,” said Diego Rei, employment and labour market policies specialist of the ILO Decent Work Team and Office for the Caribbean.

LABOUR MARKET RECOVERY MEASURES PREDOMINANTLY SHORT TERM ACROSS CARIBBEAN

Across the region, government responses were usually quick and structured to provide mostly emergency or temporary relief. These included income support measures, financial assistance to economic units – at times accompanied by employment retention conditions – and a range of other measures. Interestingly, in several countries, workers in the informal economy were able to benefit from special concessions or ad hoc designed disbursement modality, thus facilitating access to available financial support. The report provides a systematic inventory of the policy measures implemented across the region, placing hem into three major categories: support measures to individuals, households and the self-employed; government support to businesses; and other measures with direct labour market impact. It takes an in-depth look into the dimension of special interest.

Steps towards longer-term recovery are seen in several countries. Some have begun to explore a wider variety of policies to move beyond providing financial relief and towards equipping businesses to better navigate the difficulties, adapt, or enter into new sectors, as the means of making the private sector more resilient. However, challenges do exist. The report argues that financial help has rarely integrated strategic components to address the need to have comprehensive social protection systems that will be ready to support shocks. Similarly, the financing of policies targeted at bolstering (labour) productivity is still mostly vague and seldom reflects a time horizon beyond the yearly budgetary one. By the same token, the flow of job seekers between different support measures remains vastly unorganised, with varied entities providing different assistance without necessarily exploiting complementarities and maintaining any sort of financial assistance that separates the job search from an educational offer.