Economist: Too many outside labour force despite record-low unemployment rate

MORE THAN 250,000 people of “prime working age” remain outside of Jamaica’s labour force, even as the country recorded a historic low unemployment rate of 4.2 per cent for the fourth quarter of 2023.

The Statistical Institute of Jamaica (STATIN) yesterday reported that, in October last year, there were 1,320,400 employed persons, 85,600 more than the number employed for the corresponding period in October 2021.

A labour force survey for 2022 was not conducted, the state agency said.

It noted that the largest increase in employment was observed in the service workers and shop and market sales workers’ category, while the largest increases by industry group were in real estate, other business services, and construction.

STATIN said the unemployment rate was 4.2 per cent in October 2023, 2.9 percentage points lower than the similar quarter of 2021.

The unemployment rate was 4.5 per cent in both April and July 2023.

Economist Keenan Falconer said continued record-low unemployment is always welcome news, theorising that across most employment metrics, the indicators are positive.

However, Falconer, who is assigned to the local office of the International Monetary Fund, said while a lower unemployment rate means that more persons who are seeking work are getting jobs, concerns persist regarding the number of persons outside the labour force who are not seeking work at all.

This number isn’t falling fast enough, he said, and is yet to attain even pre-pandemic levels.

“When disaggregated by age, and excluding those who are of secondary school age as well as those over 65, there are almost 280,000 people of prime working age who are not engaged in any way and some way must be found to bring them into the labour force, whether through education or skills training,” Falconer told The Gleaner in reacting to the news.

He said although the labour force participation rate is high and on par with many developed countries, the total labour force has remained effectively constant since attaining pre-pandemic levels in April 2023.

And while youth unemployment continues to trend downwards, he pointed out that between July and October 2023, around 12,000 persons aged 20-44 fell out of the labour force, though he acknowledged this decline was offset by increases in older age groups.

“This could indicate that younger persons who were previously working have chosen to go back to school, migrated or have selfexcluded on the basis of perceived inadequate remuneration levels,” he said.

For last October, STATIN said the labour force increased by 3.7 per cent, adding 48,900 persons to the 1,328,700 that were already a part of it in October 2021.

Of the 1.3 million persons in the labour force, 738,900 are males and 638,700 females. The male labour force increased by 24,100 or 3.4 per cent and the female labour force by 24,800 or four per cent.