Jobs jabberwock

A democratic country often judges its elected officials by what they do on several fronts. Maintaining peace within national borders is usually very important. So, too, is improving the economic well being of the nation. On that front, a broad concept like ‘economic growth’ or some measure of national output and income, is not usually that important in the minds of the general public, except in terms of what possibilities it suggests are open to people. Rather, people look at economic activity in terms of what it means to them, personally. So, positive developments with jobs, pay, and prices usually cause people to feel that things are going well, or not. When they lose jobs, suffer frozen pay or cuts in pay, or have to face rising prices, they have a negative view of how things are going.

Jamaican governments have had a very hard time since Independence presiding over an economy that struggles to create enough jobs for the great majority of the working population. Mass emigration has helped reduce some of the pressures that could have caused. Nevertheless, unemployment has been stubbornly high, in low double digits in percentage terms most of the time, and for significant periods, much higher, in the midteens or higher. World Bank data for the past 20 years show this well.

Rapidly increasing prices have been another burden on the nation. Jamaicans have lived with inflation exceeding 5 percent a year since most of the past 50 years. At times, the annual rate has been well over 15 percent.

So, people have lived with a prolonged period of employment insecurity and also lived with the uncertainty that comes with price inflation. Data on wages are not very good and I will argue that most people have lived with at the very best stagnant real wages, over most of the past two decades, even though data suggest that poverty has declined. Much of that improvement comes from the support of informal activities and remittances. So, Jamaicans have had to live with a long period in the economic doldrums. Add to that natural disasters knocking the economy back on its heels very frequently and you have the makings of an unhappy lot of people when you start talking about economic progress. So, when more jobs seem to be coming onto the horizon, it’s like a ship laden with goodies passing a barren island; those who see it start to jump excitedly and wave flags and make noise.

Recent days have witnessed one of those chronic periods where government officials act like the inhabitants of a barren island, and talk a lot about potential job creation. This is happening not long after grim data about rising unemployment left a bitter taste in the mouths of many people. There is no magic wand to creating jobs, and the rabbits come out of the hat with more difficulty when so many things are going against economic growth. I’m always made uneasy when people who ought to have details don’t offer any or many, or the details have to be dragged from them like pulled wisdom teeth.

Hopeful talk is circulating about the job-creating potential of Jamaica developing a logistics hub, to take advantage of planned expansion of the Panama Canal. Chinese investors seems to have become the most likely investment partner, and the PM’s recent visit to Beijing raised hope more that this and other investments would come from China. If Chinese investment underpins the project who will get the jobs created? Chinese or Jamaican or other nationals? If Jamaicans get jobs, what kinds will they be? Maybe, the potential investors–and they need not be Chinese, have different sets of expectations in terms of job creation. In short, we are in a fog, and official comments reflect that. The problem for the politicians is that they are one side of the table and the investors on the other side really have the good cards to play from the other side of the table. Talk is not action, and no action means no actual jobs. But, politicians love to talk.

Opposition MPs don’t seem to have mounted any sustained effort to call the government to task and flesh out their vision for employment growth and unemployment decline in Jamaica, short of some stock snarling when the unemployment figures come out.20130829-195449.jpg

Jamaica’s real problem is lack of investment, either domestic or foreign, without which output cannot increase, incomes cannot grow and jobs cannot be created. People talk about investor ‘confidence’ and how it needs to improve for the economic engine to start spinning faster.

20130830-054831.jpgBut, confidence is not investment. Big projects or small don’t matter till they are realized. People can’t live off politician’s words. Anecdotal evidence suggests that many are skeptical about new jobs appearing. Where? When? For whom? What type? For how long? What pay? These are some of the questions people want answered, but from what I’ve heard few answers come back.

Author: Dennis G Jones (aka 'The Grasshopper')

Retired International Monetary Fund economist. My blog is for organizing my ideas and thoughts about a range of topics. I was born in Jamaica, but spent 30 years being educated, living, and working in the UK. I lived in the USA for two decades, and worked and travelled abroad, extensively, throughout my careers and for pleasure. My views have a wide international perspective. Father of 3 girls. Also, married to an economist. :)