Hear, oh Jamaica, the nat'l economy is one

by Shalman Scott

THE DEBATE still rages about Prime Minister Andrew Holness' statement regarding no job losses (one of several recent verbal missteps). Some claim that the PM was talking about the public-sector job retention, while others are firm that he was talking about no job losses in the economy generally. Whichever side is correct still leaves the prime minister very incorrect. To begin with, the divestment of Air Jamaica and the Sugar Corporation of Jamaica, as well as the restructuring of several statutory bodies, including the Urban Development Corporation, have all seen job losses.

Additionally, the present Government has already stated repeatedly that there will be public-sector job losses at the end of the public-sector rationalisation exercise. The initial number of job losses projected in the public sector, the country was told, was 10,000 close to two years ago, with hints from government spokespersons that the number will rise as the agreement with the International Monetary Fund requires the public-sector wage bill to be reduced to nine per cent of GDP (a measurement of economic performance).

Those persons being prevailed upon to take early retirement from the Island Special Constabulary Force and elsewhere are facing forced job losses. This pointless and fruitless claim about no job loss within the public sector, apart from it being patently false, mirrors a scene where a bus loaded with people careened off the road and began a long descent into a precipice, and on the way down, before the fatal impact, the driver announced: 'Nobody is dead!'

The apologists continue to argue that we should applaud the government for its efficient management of the economy (admittedly in an unusually challenging period) during the last four years which have seen no job losses in the public sector, while they assertively point to the private sector as the place where some 12,000 jobs have been lost. While this line of reasoning may be good for political campaign, it makes no economic sense as it tries to separate the impact of government monetary and fiscal policies on the public sector, vis-à-vis the private sector, oblivious that they are not separate and apart but only mutually exclusive. In the operation of the Jamaican economy, the Government must be ever mindful where policy impacts are felt as due regard is paid to parity, equity and fairness within a wider context of the backward and forward linkages within the national economy. Accordingly, no section of the economy is insulated from cyclical economic downturns or upturns resulting in distortions and/or growth and expansion as it relates to political policy.

It's all interlinked

The success or failure of private-sector operation in the framework of the economy is inextricably bound to levels of employment, consumption, production and investments, the nature of fiscal and monetary policies of the government of the day, social and political certainty and stability among other factors. Recall in 2009 the Government imposed within a single year three tax packages plus the JDX programme, which took from the hands of private households $82 billion. It should not be hard to assess the deleterious effect of that act on the compression of demand for goods and services both in the private and public sector. And as the private sector earnings falls, one of the first casualties is job loss and, by extension, contraction in the revenue base and concomitant reduction in revenue intake.

Unless properly nuanced, creating an impression that net job losses over the last four years only took place in the private sector could reflect a policy failure by Government that has committed to the private sector being the engine of growth for the Jamaica economy. If we applaud the policies which it is claimed saved jobs in the public sector, we would at once be applauding the same policies that failed in the private sector if job creation/loss is the yardstick. All of this bobbing and weaving with the arguments about the location of job losses and job retention can be put to rest with truth: the austerity programme being pursued by Government will not anytime soon be creating net job increase within the economy, and while the rate of job losses in some sector might be higher now than others in the short and medium term, the promised medicine will be administered fairly across the board where no distinction in areas of hardships and suffering will be discernible.

Shalman Scott is a political analyst. Send feedback to columns@gleanerjm.com.