Saint Lucia Unemployment Analysis
Reducing unemployment has been a major challenge for successive Saint Lucian governments. The onset of the COVID-19 pandemic has further exacerbated the unemployment situation. A recent published article stated the following: “Saint Lucia has the highest unemployment rate in the Americas. With between one-fifth and one-fourth of the country’s population being unemployed, the small Caribbean island nation has the dubious distinction of being the country with the highest unemployment rate in the region. Youth unemployment is also a serious issue for St. Lucia — 45.21% of young people looking for a job are unable to find one.” The subsequent material will analyze the unemployment and labour force participation figures published by the Central Statistics Office. This will show that the adjusted unemployment rate for Saint Lucia at the end of 2020 was staggeringly over 30%.
2021/2022 Budget Address Assertions
The Prime Minister stated the following in his 2021/2022 budget address “Imagine if you would, Mr. Speaker, if our administration had not been impacted by COVID last year. We are certain that the unemployment rate which had already been reduced to 16 percent, would have been reduced further. We are certain that youth unemployment would have also continued on its downward trend, from 44 percent when we got into office to 31 percent. By 2019 our debt to GDP had declined to 59 percent. As we indicated with many of the capital investment projects, the roads, the airport, St Jude, the improvements in healthcare and the continued investment in education, we are certain that unemployment would have dropped to single digits. We would probably have had, one of our highest levels of economic growth and our debt to GDP would have been reduced.”
The PM’s statements are an optimistic prediction of what would have happened without COVID-19. The current administration’s capital project focus in conjunction with the COVID-19 pandemic was responsible for the dramatic rise in unemployment in 2020. This administration stated in their 2016 manifesto “Reduce the overall level of unemployment to no more than 15 percent.” Clearly, another promised not kept as Saint Lucia’s adjusted unemployment rate is more than twice their goal of 15%.
Unemployment Figures
The figures below show data from July 2015 to June 2016 (one year prior to this administration’s entry into governance) and from 2019 to 2020. All data can be obtained from the Central Statistical Office’s for the following quarters: Quarter 1, Quarter 2, Quarter 3 and Quarter 4.
Due primarily to the COVID-19 pandemic, the unemployment rate reported by the Central Statistics Office indicate a significant rise in unemployment from 2019 onwards. However, the current government will end their administration with a higher unemployment figure than when they started in 2016 despite their promises of a reduction. In addition, the adjusted unemployment rate chart described below has as an even higher spike for the similar period. Furthermore, unemployment figures conceal an interesting observation that the Saint Lucian labour force shrunk significantly in the past year.
Labour Force Participation.
The Saint Lucian Labour force has hovered generally around 100K mark between 2015 and 2019. “The labour force is the number of people who are employed plus the unemployed who are looking for work. The labour force does not include the jobless who aren’t looking for work.”
· The average labour force for the year preceding this administration’s entry into governance was at 103K.
· While the average labour force numbers for 2019 stood at 101K.
However, from the onset of the COVID-19 pandemic in 2020 Q1 onwards, the labour force plummeted significantly with thousands of persons being classified as no longer looking for employment and hence not included as part of the unemployment figures.
There was a drop in employed force from an average of 82,300 in 2019 to 75,000 in 2020. Furthermore, the employed labour force of Saint Lucia is close to 6,000 less at the end of 2020 than at the beginning of this administration’s term despite the PM’s claim of good economic management.
Adjusted Unemployment Rate
In order to get a more accurate picture of the true unemployment figures in Saint Lucia it would be necessary to modify the labour participation figures. In the following graph an “adjusted unemployment rate” was computed with the following definition:
Labour Force participation in 2020 is equal to the average of the 2019 quarterly labour force numbers.
From the figures published by the Central Statistics Office the average labour force number in 2019 was 100,976 persons compared with significantly reduced labour force number 95,790 of in 2020. This reduction may be a result of thousands of Saint Lucians took themselves out of the labour market and hence were not classified as unemployed. Therefore, the adjusted unemployment rate is over 30% in Quarter 4 of 2020 and well over the “fairy-tale” prediction of the PM of a single-digit unemployment rate for Saint Lucia. The current administration has failed to manage the Saint Lucian economy effectively.
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