Editorial | Now to productivity
Recently, there have been several bits of good economic news which, like the finance minister, Nigel Clarke, this newspaper believes are worthy celebrating.
There was, for instance, Dr Clarke's revelation, based on the Survey of Living Conditions, done in 2016, that poverty, year on year, had declined by 17 per cent - from 21.1 per cent in 2015 to 17.1 per cent in the year of the survey. This presents Jamaica's lowest poverty rate since the height of the global recession in 2009 and since the country began its programme of fiscal compression under its economic reform agreements with the International Monetary Fund.
According to the finance minister, the drop in poverty, with people's capacity to consume used as a proxy for wealth, is consistent with rising employment, low inflation and a 12 per cent rise in agricultural output in 2016. Agriculture, according to official data, employs nearly 200,000 Jamaicans, and the impact of its 2016 performance was partly reflected in the reported 30 per cent decline in rural poverty.
That is good news, enhanced by the fact that the poverty figures came in the wake of job data showing the unemployment rate in January at 9.6 per cent, the lowest in several years, and having fallen by 0.8 percentage points between October and January. In fact, in the 15 months to January, the unemployment rate declined 3.3 percentage points and 27,000 more people were in jobs. Dr Clarke has suggested that 40,000 new jobs were created in the past two years.
As much as we welcome these figures, seen partly as natural outcomes of the largely sensible policies that the Government, over two administrations, has pursued with discipline over the last six and a half years, they ought to be explored with diligence to ferret out what weaknesses they may hide and what policy measures they may urge. Low labour efficiency, for instance, is among our concerns.
Jamaica's economy was flat last year, having grown by around one per cent in 2016. On the face of it, Jamaica is one of the world's few low-growth economies with the capacity to, with relative robustness, create jobs. The point is that in keeping with Jamaica's long-term decline - at about one per cent a year - in labour productivity, it takes more workers to generate the same unit of output. That is a matter that demands urgent policy attention by the Government.
Further, while no job is to be sniffed at - new ones representing the confidence of someone to invest - there is, nonetheless, the matter of the quality of jobs being generated, as noted by Wayne Henry, the head of the Planning Institute of Jamaica. Mostly they were entry-level type jobs in wholesale, retail, restaurants and repair and installation. The investment in education and training, to allow for transitioning to higher-value jobs, is a related issue to be examined.
Another factor in need of exploration and explanation is the decline in the labour force by more than 21,000, or 1.56 per cent, in the 12 months up to January 2017.
At the same time, the number of persons outside the labour force increased by more than 22,000, or three per cent. If these people were preparing themselves for the job market, or doing other productive things, that would be good. Hopefully, they didn't withdraw out of frustration and are up to no good.