By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas is “ill-prepared” to support an increasingly aged population because so much of its productive workforce is unemployed, a newly-released report describing this as an “urgent crisis”.

The long-awaited ‘State of the Nation’ report, unveiled last night as the first phase of the National Development Plan (NDP), warned that the combination of sustained high unemployment and low workforce productivity meant the Bahamas would have difficulty coping with demographic change over the next 25 years.

Expressing particular concern over the 30 per cent youth unemployment rate, which means that almost one in three Bahamians aged between 16 to 24 years-old cannot find work, the report said this had massive implications for the country.

“Beyond the tag line of youth unemployment is a greater story of lost productivity and deterioration in the health of the Bahamian economy due to lower output, reduced consumption, reduced investment and increased social spending,” the ‘State of the Nation’ report warned.

“The low growth rates seen in the Bahamas suggest that it is unlikely that the current industries could grow sufficiently fast to absorb those currently unemployed and the new members entering the workforce yearly. New industries and innovative solutions to increase opportunities will have to be developed.”

It quickly added, though: “More grave, however, is the urgency of the crisis. The Bahamas will be facing an increasingly aging population in 2040.

“With such a high level of its productive workforce out of employment, the country is ill-prepared to achieve the level of development to support the changing demographic.”

The Bahamas’ official unemployment rate has remained stubbornly in the ‘double digits’ since the 2008-2009 recession, indicating that much of the joblessness is structural in nature, and that the economy is not growing fast enough to keep pace with an expanding population.

Some 14.7 per cent, or between one in six and one in seven Bahamians, was unable to find work at the time of the last Labour Force Survey in November 2015.

“A high percentage of the unemployed have not completed high school, which makes them particularly vulnerable,” the ‘State of the Nation’ report said.

“While having a young, diverse workforce is valuable, high levels of unemployment among the youth can lead to a reduction in social cohesion, limited future employability and loss of skills.

“Further, as young people remain out of work, the long-term earning potential and productivity of this segment of the population diminishes as they lose opportunities to develop additional cognitive and soft skills, gain experience and showcase their creativity.”

The ‘State of the Nation’ report acknowledged the links between high youth unemployment, especially among men, and high crime levels, coupled with drug and alcohol abuse and other anti-social behaviours.

It also conceded that “a significant portion of Bahamian youth are unemployable”, lacking even the behavioural and basic literacy skills required in the workplace. An Enterprises Survey in 2010 found that around 33 per cent of Bahamian employers, or one in three, cited an ‘inadequately trained workforce’ as their biggest obstacle.

“A significant portion of Bahamian youth are not only unemployed but, in many respects, because of substantial skills deficits, they are unemployable without intervention,” the ‘State of the Nation’ report said.

“According to various studies, many businesses indicate a shortage of the required skills within the local workforce. It is also reported that behaviour problems are the leading cause of terminations.”

Turning to ‘skills gaps’ and mismatches between labour supply and demand, the report said Department of Immigration data showed that less than 30 per cent of work permits issued between 2012 and 2014 were for top professional or technical posts.

Out of a total 24,462 permits granted, ‘professional’ and ‘technical’ posts both accounted for less than 5,000. Yet more than 15,000 work permits were issued for ‘low skills’ positions.

“A 2014 study by the World Bank on Youth Unemployment in the Caribbean noted that 34.5 percent of employers in the Bahamas cite the need for experience as a critical determinant of employment,” the ‘State of the Nation’ report said.

“Additionally, the inadequacy of the education of the workforce was seen as the single largest obstacle to doing business in the Bahamas. The mismatch is seen in all sectors and sizes of business.

“As a result, 24,462 work permits were issued between 2012 and 2014. A review of the recent Immigration statistics suggests that this is not restricted to high level positions but is prevalent across all job categories.”

Addressing the consequences, the ‘State of the Nation’ report said: “Right now, there is an increasing skills gap between what the economy needs and what the labour force can offer.

“This leads to the underemployment of Bahamians with many of the best jobs going to people from outside the country. This creates a climate in which it is easier for crime to get a foothold.”

It added: Better education and training will make it easier for employers to find qualified staff. This, in turn, should help reduce poverty and, by extension, crime.

“A better-educated population will also be better equipped to help diversify the tourism sector by creating quality tour products, attractions and other value-added services. This could lead to an increase in Bahamian ownership and participation in business activity. In fact, a better educated population will help diversify the economy as a whole.”