Rise in unemployment but no need to worry – Central Bank Governor

Unemployment in Barbados is up, partly due to a large number of people retiring, according to Governor of the Central Bank Dr Kevin Greenidge.

But he said that based on the usual fluctuations in the past two decades, there is no need for concern as the current unemployment levels are expected due to seasonal activity.

He disclosed on Wednesday that the rate of joblessness increased from 7.1 per cent in September 2022 to 8.3 per cent for the same period in 2023.

“That edging up was as a result of the increase in the number of persons retiring…. About 2 300 persons retired from the labour force and a further decline of the labour force by 3 500. At the same time, we had some job losses, mainly in agriculture and general admin,” Dr Greenidge explained.

“The number of [unemployment] claims edged up slightly during the period, but way below the 2020 COVID period. And, certainly, if you look at the average down to the rest, it is actually below the pre-COVID average. So, the labour market remained quite resilient and healthy.”

In seeking to put the rate in perspective, Dr Greenidge said there would only be a need for concern if there was an upward trend.

He plotted a chart back 23 years, up to 2020, which showed unemployment levels fluctuating, reflecting favourable figures when the economy was performing well and vice versa.

“What does this tell us? On this [chart], I plot the average. Taking the average across, it suggests that over the last two and a half decades, our unemployment rate averaged 10.3 per cent. That is average, so it means that when the economy is doing good you would see it’s below [that] and when the economy is not doing so good, the rate rises,” the central bank governor explained.

“So, I want us to focus, not so much on the small fluctuations, but look at the general trend. It increased to 18 per cent during COVID. We are back down to 8.3 per cent. If I put another line on the chart and extend that 8.3 backward, you could see that within the last two and a half decades, there is only one period where we were better off than we were today; and that was back early 2006/2007. That was preparations for Cricket World Cup with the construction of KOMI [Kensington Oval Management Inc.], and the construction boom, unemployment fell to its lowest level.”

He contended that the country needs that kind of investment activity to reduce unemployment and keep it down.
(EJ)