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Let’s move our working class to middle class
Columns
January 21, 2024

Let’s move our working class to middle class

In 2020 the number of emigrants was six times greater than that of immigrants in the Caribbean region. Approximately 9.8 million people are leaving the Caribbean, versus 1.6 million people are coming.

These were the most recent figures presented by the Caribbean Policy Research Institute (CAPRI) in its report ‘Brain Gain: Solving The Labour Shortage and Competing For Global Talent’. This report is a deep and timely analysis of the potential global effects of increased immigration on economic growth, wages, and employment, and the possible impacts of liberalising the labour market to achieve higher levels of productivity. Most importantly, the report evaluates Jamaica’s migration trends and our immigration framework against the background of our existing labour market.

Currently, one out of every three individuals born in Jamaica does not live in Jamaica. Furthermore, according to International Labour Organization (ILO) figures, over 80 per cent of Jamaicans with tertiary level education living outside of Jamaica were trained in Jamaica.

Yet, immigrants make up less than 1 per cent of Jamaica’s total population.

Between 2015 to 2023 Jamaica created 164,000 net new jobs. The bulk of these jobs, approximately 73 per cent, were created in the construction and global services/business process outsourcing (BPO) sectors.

Still, Statistical Institute of Jamaica (Statin) reports that 720,000 people, one-third of Jamaica’s working age population, remain outside the labour force. That is “anyone who is 14 years or older and is neither employed nor seeking work. This includes full-time students and individuals physically incapable of working, who account for 40 per cent, or 288,000, of the group. The majority of this group, 60 per cent or 432,000, constitute the groups who “do not want to work” at all.

This is perhaps why, between 2015 and 2022, 82 per cent of the economy’s growth potential was not realised because of falling productivity.

Therefore, continued employment growth will require more people in the third category to enter the labour market to meet demand.

This leaves a significant gap and, as Jamaicans, we must begin the honest conversation about reorienting our education system to meet Jamaica’s need to create high-skilled jobs in industries we can compete in globally to drive local economic growth, mainly because automation and artificial intelligence (AI) have already taken low-skilled jobs in many sectors.

We must be more proactive and not leave things to chance if we want a growing economy. We all aspire for a better Jamaica, but this will only happen if we plan and work to compete in the global economy.

The Chinese and Indian governments planned for their future by investing heavily in higher education for their people. Today, they are reaping the benefits, with gross domestic product (GDP) growth of 5.2 per cent and 7.4 per cent respectively in 2023. By comparison, Jamaica’s growth rate averaged 0.59 per cent between 1997 and 2022, according to the World Bank.

It is no coincidence that the CEOs of some of the world’s largest companies, namely Google, Microsoft, Adobe, Oracle, Paolo Alto, Nokia, and Miron, are Indian.

There have been public calls from the Jamaican private sector and foreign investors that their businesses require specialised skill sets that don’t exist in the country and need to outsource labour.

Many sentiments I heard and read from Jamaicans surrounded hesitancy about importing labour through immigration. More formally, CAPRI captured three main factors that influenced negative public attitudes of X users towards immigration if Jamaica was to liberalise the importation of labour.

Wages were the predominant issue that contributed to negative sentiments expressed. “The general sentiment in this regard is Jamaican workers are not fairly compensated, and improving wages could ease the labour shortage by incentivising people to work who are currently outside of the labour force in addition to the perceived impact that immigrants would displace Jamaican workers.”

On the other hand, Jamaicans also acknowledged the challenges of the labour shortage and gave consideration to the problem that needs to be addressed and importing skilled workers would help to lessen the problem and that immigration would create a more competitive labour market, possibly benefiting the country and creating a more attractive work environment.

The truth is that immigrants help developed countries to drive economic growth and to remain competitive. In the United States, immigrants added US$2 trillion to their GDP in 2016 and US$458.7 billion to state, local, and federal taxes in 2018.

In 2018, after immigrants spent billions of dollars on taxes, they were left with US$1.2 trillion in spending power, which they used to purchase goods and services, stimulating local business activity. Moreover, immigrants contributed between 4 per cent and 5 per cent of the Dominican Republic’s GDP in 2010, and 11 per cent to 12 per cent of Costa Rica’s GDP in 2011. Conversely, in Jamaica it has been calculated that limiting immigration would negatively affect the economy, decreasing GDP by 2 per cent over 20 years, shrinking growth by 13 per cent, and cutting five million jobs.(CAPRI).

“Immigrants, particularly high-skilled immigrants, contribute to increased innovation in areas like entrepreneurship, establishment entry, and job creation. In the US, higher shares of high-skilled immigrants in the workforce led to increased entrepreneurial activity. The per capita effect of high-skilled immigrants on entrepreneurial activity far exceeded that of high-skilled natives.

“Regarding firm creation, higher shares of high-skilled immigrants in the workforce led to higher rates of new firm creation. The effect of high-skilled immigrants on new firm creation far exceeded the corresponding impact of high-skilled natives. Immigrants can also have adverse effects on some niches of entrepreneurship,” reported CAPRI.

I understand how immigrants are perceived negatively. This issue is also used as a political lever to elicit deep patriotism by political parties and governments. Recall Brexit, and now the USA, where immigration is the number one issue on the minds of voters.

However, based on the data presented in the CAPRI report, if we look at terms and place the country’s interest first, it is clear that properly planned and foresighted immigration is in all our best interests, as it will help to grow our nation’s economy and productivity creating multiplier impacts across the board for upward social mobility.

I encourage everyone to read CAPRI’s most recent report, ‘Brain Gain: Solving The Labour Shortage and Competing For Global Talent’ and another, ‘Growthless Jobs: The Paradox of Rising Employment and Stagnant Output’.

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