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New jobs in the offing
Dennis Morrison
Wednesday, June 06, 2007
The Jamaican economy underwent major restructuring in the 1990s as trade liberalisation measures put unprecedented pressure on domestic producers. This was reinforced by the abolition of exchange controls which gave Jamaicans free access to foreign exchange, fuelling rapid increases in imports, which displaced consumption of a wide range of l ocally produced goods. One of the results of these changes was the decline in employment in critical sectors such as manufacturing.
At the same time, traditional export industries such as sugar and bananas were also being battered by policy changes in the European Union, which exposed our exports of these commodities to greater competition from more efficient producers. It did not help that producers in Jamaica were slow to adjust to this changing environment and thus the negative effects were made even worse. Employment levels in these industries declined significantly. Moreover, the apparel industry, which had grown quickly in the mid-80s and up to the early 1990s was confronted by lower cost production in Mexico and other Central American countries, with cheap labour.
It was not surprising, therefore, that growth in employment was slow and the unemployment rate remained in the mid-teens, up to the end of the 1990s. The meltdown in the financial sector, the strong dose of anti-inflation measures and the subsequent push for Jamaican firms to cut costs and adopt modern technology led to further job losses. The effects were felt most among young adults and hence the conclusion that our high crime rate has been fed substantially by the deprivation experienced by this age group, especially among the men.
More recently, as the macro-economic environment has eased, with inflation dropping to single-digit levels in the late 1990s and early 2000s, the economic recovery process has picked up momentum. While the momentum has been fed by record levels of foreign direct investment, there has been some evidence of an upturn in investment activity by local businesses. With interest rates now declining sharply from the very high levels seen in the mid- to late-1990s, and again after the shocks of early 2003, businesses are now able to borrow at more affordable costs. All of these factors have contributed to the decline in the rate of job losses.
Not only has the rate of job losses fallen, but net employment levels are now on the rise. As a matter of fact, official data show that approximately 73,000 new jobs were created in the two-year period, April 2004 to April 2006. This means that the number of new jobs created in the period replaced the job losses, plus providing 73,000 additional jobs. The expansion in the job market has also been due in large part to the investment boom in infrastructure and tourism development, particularly on the northern corridor and the south-central region of the island.
The spotlight has been on the thousands of construction workers employed on hotel projects in Hanover, St James, Trelawny, St Ann and St Mary. But large numbers of workers have also been engaged in major investment projects in the bauxite-alumina sector. For example, the first phase of the JAMALCO expansion project created employment opportunities for 1,062 workers, while another 1,000 have been engaged in mining infrastructure and red-mud disposal projects. The expansion of Carib Cement's plant has also generated over 500 construction jobs. It is therefore not surprising that employment levels in the construction sector have gone up by nearly 30,000 in the 2003-2006 period.
In the immediate term, it can be expected that the rate of expansion of net new jobs will accelerate as major new projects "in the pipeline" come onstream. These jobs will flow from tourism-related developments, agriculture, manufacturing, ICT, and a range of other services. Already, the state-run training institutions are stretched to the limit in keeping up with the demand for skilled personnel in a wide range of disciplines. These pressures are showing up in the increased numbers of foreign workers that are being employed and the agitation by trade unions and others about the administration of the work permit system.
The pace of expansion of training in professions, vocational, and other skills must therefore be accelerated if we are to keep up with the growth in demand, particularly bearing in mind that there is an investment portfolio of between US$4-6 billion, which is expected to be implemented over the next five years. Consequently, private sector providers of training services will find many new opportunities here in Jamaica as well as in the wider Caribbean, as the Single Market takes shape.
Dennis Morrison
Wednesday, June 06, 2007
The Jamaican economy underwent major restructuring in the 1990s as trade liberalisation measures put unprecedented pressure on domestic producers. This was reinforced by the abolition of exchange controls which gave Jamaicans free access to foreign exchange, fuelling rapid increases in imports, which displaced consumption of a wide range of l ocally produced goods. One of the results of these changes was the decline in employment in critical sectors such as manufacturing.
At the same time, traditional export industries such as sugar and bananas were also being battered by policy changes in the European Union, which exposed our exports of these commodities to greater competition from more efficient producers. It did not help that producers in Jamaica were slow to adjust to this changing environment and thus the negative effects were made even worse. Employment levels in these industries declined significantly. Moreover, the apparel industry, which had grown quickly in the mid-80s and up to the early 1990s was confronted by lower cost production in Mexico and other Central American countries, with cheap labour.
It was not surprising, therefore, that growth in employment was slow and the unemployment rate remained in the mid-teens, up to the end of the 1990s. The meltdown in the financial sector, the strong dose of anti-inflation measures and the subsequent push for Jamaican firms to cut costs and adopt modern technology led to further job losses. The effects were felt most among young adults and hence the conclusion that our high crime rate has been fed substantially by the deprivation experienced by this age group, especially among the men.
More recently, as the macro-economic environment has eased, with inflation dropping to single-digit levels in the late 1990s and early 2000s, the economic recovery process has picked up momentum. While the momentum has been fed by record levels of foreign direct investment, there has been some evidence of an upturn in investment activity by local businesses. With interest rates now declining sharply from the very high levels seen in the mid- to late-1990s, and again after the shocks of early 2003, businesses are now able to borrow at more affordable costs. All of these factors have contributed to the decline in the rate of job losses.
Not only has the rate of job losses fallen, but net employment levels are now on the rise. As a matter of fact, official data show that approximately 73,000 new jobs were created in the two-year period, April 2004 to April 2006. This means that the number of new jobs created in the period replaced the job losses, plus providing 73,000 additional jobs. The expansion in the job market has also been due in large part to the investment boom in infrastructure and tourism development, particularly on the northern corridor and the south-central region of the island.
The spotlight has been on the thousands of construction workers employed on hotel projects in Hanover, St James, Trelawny, St Ann and St Mary. But large numbers of workers have also been engaged in major investment projects in the bauxite-alumina sector. For example, the first phase of the JAMALCO expansion project created employment opportunities for 1,062 workers, while another 1,000 have been engaged in mining infrastructure and red-mud disposal projects. The expansion of Carib Cement's plant has also generated over 500 construction jobs. It is therefore not surprising that employment levels in the construction sector have gone up by nearly 30,000 in the 2003-2006 period.
In the immediate term, it can be expected that the rate of expansion of net new jobs will accelerate as major new projects "in the pipeline" come onstream. These jobs will flow from tourism-related developments, agriculture, manufacturing, ICT, and a range of other services. Already, the state-run training institutions are stretched to the limit in keeping up with the demand for skilled personnel in a wide range of disciplines. These pressures are showing up in the increased numbers of foreign workers that are being employed and the agitation by trade unions and others about the administration of the work permit system.
The pace of expansion of training in professions, vocational, and other skills must therefore be accelerated if we are to keep up with the growth in demand, particularly bearing in mind that there is an investment portfolio of between US$4-6 billion, which is expected to be implemented over the next five years. Consequently, private sector providers of training services will find many new opportunities here in Jamaica as well as in the wider Caribbean, as the Single Market takes shape.
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