The Tribune

• Labour force, employed persons both shrink

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition's finance spokesman last night argued that the 8.8 percent unemployment rate, the lowest for 15 years, is a "smokescreen" that masks the "significant" reduction in the labour force's size and number of working Bahamians.

Kwasi Thompson, east Grand Bahama MP and former minister of state for finance, told Tribune Business that the results of the first full Labour Force Survey for four years were "not a cause to celebrate but a moment for us to pause and ask some very serious questions".

Comparing the May 23 findings with those from four years ago, as the May 2019 survey was the last before Hurricane Dorian and the COVID pandemic struck, he noted that during this period the workforce has seemingly shrunk from 237,525 in the latter survey to 219,465 now - a drop of almost 8 percent or just over 18,000 persons.

Similarly, Mr Thompson told this newspaper that the number of employed Bahamian workers had also shrunk over the same period - by almost 7 percent or just over 14,000 persons, falling from 214,890 to 200,175 today. Warning that a shrinking workforce would have negative consequences for present and future economic growth, he questioned how the number of working Bahamians could have fallen despite the influx of school leavers in each of the past four years.

"We have a significantly lower labour force in 2023 than we had in 2019," Mr Thompson said. "The labour force has decreased significantly by 18,000. More importantly, we have a significant drop in employed persons to the tune of 14,000 people. There are less persons employed in 2023 than were in employment in 2019.

"We have not yet caught up to pre-pandemic numbers. There are less people employed today than there were employed in 2019 by 14,000. There are significantly fewer persons employed. That is the central takeaway. The 8.8 percent [unemployment rate] is a smokescreen. You have to look at the total circumstance. You have to look at what the total workforce was in 2019 compared to what the total workforce is today.

"We also have to ask significant questions," the east Grand Bahama MP continued. "May 2019 to now, even if we count the number of persons coming out of high school, the labour force should have increased. We have a very serious question to ask: What has happened to those 18,000 persons? What has happened to all the persons who ought to have been added to this labour force between May 2019 and May 2023?

"That, to me, it is not a cause to celebrate, but it is a moment for us to pause and ask some very serious questions. It means our workforce is decreasing, and the number of persons able to work is decreasing. That's a very serious question we must ask ourselves. It has very serious consequences moving forward, and for the growth and future growth of the economy."

Robert Farquharson, the Government's top labour official, said the reduction in the Bahamian workforce's size compared to May 2019 levels, together with the shrinkage in the number of Bahamians actually employed, needed further analysis to determine the cause. Post-COVID, he suggested some persons may have left The Bahamas to seek opportunity elsewhere or are now operating home-based businesses and were not recorded.

"It may be attributable to the fact a number of persons are not seeking employment, or may have left the jurisdiction," the Department of Labour director told this newspaper. "That still needs further analysis to inquire as to why the labour force has reduced like that. I'm sure additional analysis will find out why that's the case."

Peter Goudie, the Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) labour division chief, also suggested to Tribune Business that the reduction could be due to post-COVID growth of the so-called "informal economy" where persons were forced to become self-employed and adopt creative means to survive during the pandemic.

As a result, they may not be paying Business Licences or National Insurance Board (NIB) contributions and, as a result, will not be captured by the Labour Force Survey. "It could have to do with the growth of the informal economy, especially because of COVID-19," Mr Goudie said.

The Bahamas National Statistical Institute, in unveiling the May 2023 findings, said the Bahamian national unemployment rate had dropped to 8.8 percent compared to 9.5 percent some four years ago. "At the time of the survey, there were 19,290 unemployed persons in the country resulting in a national unemployment rate of 8.8 percent," it found.

"In New Providence the rate was 8.9 percent, Grand Bahama 10.8 percent and Abaco 7.1 percent. Overall, when examined by sex, the unemployment rate for men was higher (9.1 percent) compared to 8.5% for women." Youth unemployment also remains a serious problem, with close to one out of every five Bahamians aged between 15 to 24 years-old, and who are seeking work, unable to find it.

"According to The Caribbean Development Bank’s (CDB) report, youth unemployment in the Caribbean is among the highest in the world, with the unemployment rate for those aged 15 to 24 reaching 42.7 percent at last report. Although not as high, similar patterns persist in The Bahamas. The unemployment rate for young men aged 15 to 24 reached 19.2 percent compared with 18.2 percent for young women," the Bahamas National Statistical Institute said.

"Nationwide, for the unemployed persons that had completed secondary school, there is a slight difference in the proportion of males (67 percent) and females (66 percent). However, for those who had not completed secondary school, the percentage of unemployed males (13 percent) was larger than that of females (8 percent). Conversely, for those who had completed university, the proportion of unemployed females (15 percent) was higher than for males (5 percent)."

Michael Halkitis, minister of economic affairs, told Tribune Business that the survey's findings had exposed gender and educational-based issues that may have to be addressed by policymakers. He also acknowledged that, with the post-COVID recovery largely complete, "the real test" is now for The Bahamas to maintain the economic growth rates that will drive job creation and further reduce unemployment.

Describing the 8.8 percent jobless rate as "very encouraging" for the Government, the minister added: "We're happy to see it below double digits. I wouldn't say it exceeded expectations. We felt it had obviously been trending down as we emerged from the pandemic, but we didn't put a figure on it to say what we're targeting.

"We're very encouraged with the fact it's below double digits and the fact the number of discouraged workers is still very low (2,035). We know the strength of the recovery in the two years coming out of COVID has been robust. The real test now is the upcoming year as that growth rate moderates. What we want to do is ensure the economy keeps growing strongly and creating jobs. We've very encouraged but, of course, the work is not over.

"The report itself points to the correlation between unemployment and certain levels of educational attainment, which will direct government policy as to we target training, additional training, to better equip our workforce. Also, there's some disparity in female university graduation as opposed to male. Again, we have to do a deep dive into that to see exactly what's going on and how policy can be implemented to address that."

Mr Halkitis also pointed out that increased employment will further drive The Bahamas' post-COVID recovery through the spending power of those working. "We're very happy with this report and don't see any negative fall-out from the increase in the minimum wage that we did," he added. "We always have to be cautiously optimistic because of the nature of our economy; it can be battered from the outside."