Reducing Unemployment and Re-envisioning the Public Sector

Layoffs have been on a downward trend since April, says Central Bank of Barbados Governor Cleviston Haynes, while also noting that “we still have a very high level of unemployment, which has been created by this COVID crisis.”

Haynes was speaking during the Bank’s most recent quarterly economic review in response to a question about when he expected unemployment to stabilise, “It is really a question of stabilise at what level. We could stabilise at the current level, but that is not really a stable situation for the overall economy.”

He noted that the Bank does not have current figures for unemployment, the number of unemployment claims filed since the pandemic started serves as an indicator that the figure has grown significantly. The initial goal therefore, says Haynes, is to return the unemployment rate back to around the 10 percent it was pre-COVID.

Haynes also addressed concerns about the possibility of public sector layoffs, explaining that a large loss of jobs in the private sector coupled with layoffs in the public sector could lead to a situation where “the economy goes into a vicious circle where it pauperises on itself.”

For this reason, he says, Government is taking measures to prevent job losses. Among these measures is the much-publicised BOSS programme, in which public sector workers will receive a portion of their monthly salary in interest-earning bonds. Workers can choose to opt out of the problem, in which case their allotted bonds will be sold on the secondary market.

Despite there being no imminent layoffs in the public sector, the Central Bank Governor asserted that there must be a change in approach to business.

“We need over time to become a more competitive economy. We are going to have to change how we do things. Therefore we are going to have to make sure our public sector plays the role of helping to enhance the competitiveness that will allow us to compete on the global stage.”

This will however require further examination of policies and the revising of systems. “In the public services, some of our systems need reform and we now need to deliver those services utilising the technology.”

Furthermore, discrepancies between the private and public sector wage levels and pension contributions can be determinants in attracting and retaining workers “who enable us as an economy to leap-frog.”

Haynes concluded his remarks by reiterating the importance of “safeguarding livelihoods” and “engineering a recovery that is sustainable while creating job opportunities for those who have been or will be displaced.”