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Sector data clarifies unemployment stats

The construction sector’s 26 percent unemployment rate combined with other key data clarify what the latest statistics are saying about the state of the national labor force, as the unemployment rate fell 0.5 percent.

Now at 13.7 percent, according to information released August 5th by the Department of Statistics (DOS), the unemployment rate contracted since the 14.2 percent rate at mid-2009, when the last full survey results were published.  Also standing above the national unemployment rate was another major sector – the unemployment rate in the hotels and restaurants grouping stands at 15.1 percent.

The unemployment level in key sectors collaborates, however, what the DOS statisticians are saying were the real causes of the reduction in the official unemployment rate.

The DOS said there were two main factors contributing to the unemployment rate decline: The number of persons that withdrew from the labor force altogether (discouraged workers), and an expansion in the ‘informal sector’ – people selling phone cards, jewelry, and other consumables from homes and cars, for example.

The wholesale and retail sector may shed some light on what is happening in employment.  The unemployment rate in that sector is 12.9 percent – meaning of the unemployed workforce in the survey group, about 12.9 percent were previously employed in that sector.  Despite the losses, employment in that sector saw near 16 percent growth, as people turned to trading whatever they could to make a dollar.

“Informal activities tend to be concentrated in the retail industry, a subgroup of the wholesale and retail industry that grew by more than any other industry over the period, increasing its number by 15.5 percent,” according to Department of Statistics Director Kelsie Dorsett.

The informal sector grew by 32 percent, or 4,410 persons, according to the August 5th labor force data.  There were 157,805 in the employed labor force in 2009 compared to 164,120 in 2011, meaning the expansion of the informal sector accounted for 70 percent of the growth in the employed labor force.  Only 30 percent of the growth would have come from the ‘formal’ sector.

So the expansion in the informal sector absorbed much of the job loss from traditional money-earning sectors, though compensation and the quality of the employment experience may have been sacrificed in the process.  Dorsett explained that the informal sector is typified by no worker contracts, little or no job security, no fixed hours, often no fixed location, and no employment benefits like sick pay or maternity pay.

All of the losses from employment sectors like construction and hotels and restaurants were offset by informal sector retail growth, however, as the other key to the unemployment rate – discouraged workers – shot up a dramatic 34.8 percent.

The unemployment rate is not a measure of how many adults in the local population are unemployed, as some may believe.  It is more a measure of how many of those who are able, interested, and actively pursuing employment were not able to find any work whatsoever.  A former banker may qualify as employed if he can sell a few phone cards a week, while a student returning home with a Master’s degree, who has given up the search for work, is not factored into the workforce and hence not counted as unemployed either.

It is not a condition unique to The Bahamas, but the way any country subscribing to International Labor Organization standards tally the numbers.  Dorsett said the practice is employed by most countries including those in the Caribbean.

There were about 8,800 discouraged workers in mid-2009, a number that ballooned by about 3100 people by mid 2011 and now stands at 11,900.  While there is nothing suspect about the exclusion of those people in the official unemployment rate, had they been actively pursuing work and still unable to find it, the unemployment rate would have been around 18.7 percent, according to the DOS.

The DOS uses ten industrial groupings to slot the labor force into.  Listed based on the percentage of the labor force they accounted for in 2009 (in parenthesis) the unemployment rate in each was: 12.4 percent for community, social and personal services (32 percent of 2009’s labor force); 15.1 percent for hotels and restaurants (15 percent), 12.9 percent for wholesale and retail (14 percent); 9.0 percent for financing, insurance, real estate and other business (12 percent), 25.9 percent for construction (11 percent), 4.7 percent of manufacturing (7 percent); 9.4 percent for agriculture, hunting, forestry, fishing (3 percent); 313.5 percent for mining quarrying, electricity, gas and water (2 percent) and 31.8 percent in the ‘not stated’ category (negligible).

The DOS does not typically publish the unemployment rate by industrial grouping, DOS Director Kelsie Dorsett told Guardian Business on Friday, and 2009 sector unemployment rates were not readily available to compare against at that point.

The reference period for the labor force survey was April 25 through May 1, 2011, and 2000 households were surveyed.  The labor force components cover a two year period, as no survey was done during the 2010 census year.

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