Unemployment

DNA responds to May 2019 Labour Force Survey

  • Numbers are no comfort to struggling Bahamians,

  • Youth unemployment stubbornly high at 20%,

  • Unemployment among women impacting homes,

  • Decrease in private sector employment gain from 3.8% to 1.8%,

  • Data shows slowing overall employment growth year-over-year.

The Democratic National Alliance (DNA) acknowledges the labour force survey results recently released by the Department of Statistics. The results come at a time when the government is desperate for some positive news to distract us from the national crisis that continues to inflict much suffering on residents due to massive load shedding by Bahamas Power & Light, conflicts of interest scandals and the obvious leadership deficit in government.


The May 2019 Labour Force Survey results would have been encouraging if the struggles of the average Bahamian do not paint a totally different picture from the numbers being touted by the government. The reality is that the 60% increase in the regressive Value Added Tax (VAT) rate continues to take a toll on Bahamian families and businesses. The announced decrease in the unemployment rate in Grand Bahama from 11.9% to 10.9% will have many residents on the island baffled following the number of lay offs during 2019 and the lack of credible investments since 2017. This statistic should also be weighed in the context that there has been migration of Grand Bahamians to New Providence and other surrounding islands.


It is common knowledge that since the survey was conducted, several businesses have closed and/or laid off workers in New Providence, Grand Bahama and other islands. The report shows that the number of self-employed persons which increased by 11.9% to 32,475 as at November 2018, remained the same at 32,475 in May 2019. It is unclear whether there was no new self-employed person between November 2018 and March 2019 or there were as much exits as there were entries into this category. The reality is that several persons are forced to become self-employed due to their inability to find gainful employment. 


The DNA supports entrepreneurship and innovation among the populace, and we are concerned by the major impediments to the ease of doing business in The Bahamas. Regrettably, these obstacles remain under an administration that has done little in this regard since assuming office. As a result, several self-employed persons will struggle to survive in the current economic environment. It is noteworthy that the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) just a few years ago, had estimated that the failure rate for Small and Medium Sized Enterprises (SMEs) stood at 70%. This statistic does not bode well for this vital sector and the real unemployment rate as well as under-employment rate in The Bahamas. 


On a year-over-year basis, employment grew by 3.2% or 6,635 in May 2019; a decrease from the 3.4% or 6,830 in November 2018. Additionally, private sector employees grew by only 1.8% to 137,605 in May 2019; a fall from the 3.8% increase to 135,135 private sector employees reported in November 2018. This suggests that the private sector is not creating enough jobs at the necessary pace to absorb new entrants into the labour force despite the record tourism numbers. The labour participation rate also fell from 83.1% in November 2018 to 82.9% in May 2019. Deliberate policies aimed at reducing the percentage of employed individuals in vulnerable employment are long overdue.


According to statistics, majority of homes are headed by women in The Bahamas. However, the survey results show that unemployment remains higher among women (9.9%) when compared to men (9.2%) despite the higher education attainment of the former. The statistics are worse for young women with an unemployment rate of 20.7% when compared to 19.5% for young men. This statistic impacts the standard of living in many homes and should be addressed with economic empowerment programs for women.


Youth unemployment remains stubbornly high at 20% within our nation and it is disheartening that this demographic is continuously dealt the bad end of the stick. Successive administrations have ignored the young people of our country and by their actions put the future of our nation in a precarious position. A DNA government will change this with intentional programs designed to unleash the true potential of the brilliant and innovative Bahamian youth.


The government had lauded the employment of 1,600 job seekers through the Government's Labour on the Blocks job fairs. Unfortunately, this initiative has provided more temporary than permanent jobs for Bahamians according to recent pronouncements by the Director of Labour. The Director had noted that the Government’s efforts to track individuals hired under this initiative had revealed that many of these persons had been let go. Abaco which was not a part of the labor initiative saw its unemployment rate increase from 7.7% in November 2018 to 9.3% in May 2018.


Bahamians have seen a significant reduction in their purchasing power while their wages remained stagnant. This perilous situation is worsened by the high cost of energy and unreliable power supply under a BPL Board and Minister that have been colossal failures. Parents and guardians of students that are financially challenged to prepare for the upcoming school year are not impressed by these numbers. The struggle for them is real and not appreciated by a government whose proverbial head is buried in the sand.


We implore the government again to devise and communicate an economic growth plan rather than implementing ad-hoc policies and hoping that the economy improves.


Arinthia S. Komolafe 

Leader 

Democratic National Alliance


DNA Responds to IMF Article IV Statement

·      IMF confirms aspects of DNA’s position on economy

·      FNM approach inherently flawed and socially disruptive

·      Government ignores significant impact of VAT increase

·      Fiscal accomplishments disconnected from plight of masses

·      Economic and financial service growth plan still lacking

 

The International Monetary Fund (IMF) in its recently released statement following discussions on the 2019 Article IV consultation provided confirmed observations that have been made by Bahamian experts over the years.

 

The Democratic National Alliance (DNA) acknowledges the efforts made by the government to address the fiscal challenges confronting our nation but contends that the approach adopted is inherently flawed and socially disruptive. The sixty percent increase in the regressive Value Added Tax (VAT) rate and the aggressive timeline for elimination of the GFS deficit has imposed significant hardship on the Bahamian people.

 

In its statement, the IMF estimated growth in Real Gross Domestic Product (GDP) of 2.3% at 2018 and projected 2.1% for 2019. However, the economic growth rate is projected to stabilize at 1.5% in the medium term in the absence of a comprehensive economic growth plan which could deliver the 5.5% required to absorb new entrants into the labor market annually.

Our nation remains plagued by unemployment in double digits and youth unemployment at an alarming rate of 23%. The fiscal targets and accomplishments touted by the government have simply failed to translate into economic empowerment or relief for the Bahamian people. The current administration has simply continued the infamous friends, family and lovers’ mentality.

The absence of a growth strategy for the financial services industry has reduced our government to a blacklist avoidance and escape agency.

 

The government is under pressure to restore credibility to financial planning and fiscal projections communicated to the nation under the watchful eyes of international observers. Expenditure and revenue forecasts cannot simply be inserted into the national budget as placeholders but must be underpinned by realistic expectations and assumptions. The current administration must find the empathy to end its relentless assault on the middle and working class in our society. The pontification on prudence in public sector hiring has been discredited by subsequent admission that terminated employees have been retained or replaced. They must rein in expenditure while discontinuing the tax, spend and borrow philosophy which burdens residents under a regressive and oppressive system of taxation.

 

The DNA has long advocated for a comprehensive review of the Bahamian tax system and the introduction of an equitable tax regime. The IMF noted that “Global tax trends and the prospective accession to the WTO thus present an opportunity for a comprehensive review of the Bahamian tax regime with a view to achieving a more equitable and less distortionary tax system. To strengthen transparency and inform future policies, a quantitative review of existing tax and other investment incentives is recommended”.

 

It is regrettable that the Free National Movement (FNM) is heavily influenced by special interest groups and party loyalists that do not want a progressive and equitable tax system. The endangered middle class and less privileged have been relegated to the proverbial backburner with no relief in sight as a result.

 

We have long called for initiatives aimed at addressing structural deficiencies within the Bahamian economy and deliberate efforts to improve the ease and cost of doing business. The DNA maintains that the government has failed to make the case for The Bahamas’ accession to the World Trade Organization (WTO) in an environment that places Bahamian businesses at a competitive disadvantage.

 

The current administration is notorious for not taking advice or counsel originating from locals but has gained a reputation for moving with haste to implement recommendations made by international and multilateral agencies. Perhaps they will now implement policies that benefit the masses now that the IMF has implored them to do so.

 

Arinthia S. Komolafe, Leader

 Democratic National Alliance