The National Economy

In a report in last Wednesday’s Newsday, Mr Rambharat pointed to a shortage of labour in Trinidad and Tobago despite the Government’s boasts that the country was near to achieving zero unemployment.

But measures of falling unemployment cannot be accepted at face value. In the first place, zero unemployment is really measured at about a four percent rate of unemployment. This is reasonable, since not every individual in the labour market wants to work or needs to. However, this also means that the unemployment figure is also calculated as the number of persons looking for work, on the assumption that those who aren’t looking don’t need to. But that assumption also results in an underestimate of the actual unemployed.

A more serious issue is that employment figures are lumped together in one crude category. That is, persons who have only temporary employment–even if it is only a ten-days–as well as those who are underemployed–working, say, for just four hours a day– are also numbered among the employed. And so, with Government expanding the URP and CEPEP programmes, and funding the major part of the construction boom, it is no wonder that unemployment has dropped drastically. But does this really reflect economic and social progress?

According to TT Manufacturers Association president Paul Quesnel, the answer is No. Almost every business, said Mr Quesnel in the same Newsday article, is looking for workers at all levels, noting that employers at the same time were concerned about these persons’ lack of literacy and numeracy skills. In yesterday’s Business Newsday, other businesspersons also expressed concern about the poor work ethic of those who did answer want ads. And these shortcomings do not apply merely to persons who have only a secondary education, but persons holding tertiary level qualifications as well.

So we have a situation where high employment levels do not really reflect high productivity. Businesses in the service sector, such as restaurants, retail stores, and gas stations, are finding it difficult to get employees. This may well be because a significant number of persons who would ordinarily fill these positions have been lured away by the higher per hour wages, and shorter work hours, in the URP and CEPEP. It is also possible that some of them have turned to crime, at least partly because they lack both the technical and social skills to hold down any kind of normal job.

The end result is that the Government is using taxpayers’ dollars to pay people who give back very little in productivity. The situation becomes even more dire when one considers that the growth in GDP has been based largely on increased prices and productivity in the energy sector. This is a sector which almost exclusively employs skilled persons, which means that the individuals at the bottom rung of the social ladder have no chance of participating directly in the most productive sector of the economy. Moreover, having become dependent on Government largesse, this same cohort of persons is trapped in a vicious cycle which prevents them from ever moving beyond the ten-days syndrome.

These factors all mean that the country’s apparently buoyant economy can easily collapse once the energy balloon is pricked. If Messrs Rambharat and Quesnel’s judgement is correct, the country does not have the human capital to create a non-energy-based economy that must be the foundation of real development. It therefore falls to the Government to use the window of high oil and gas revenues to create incentives which can push the have-nots to better themselves and, in so doing, better the society as a whole.