Monday, April 22, 2024

S&P: Job losses a possibility

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DON’T BE CAUGHT OFF GUARD if there is a spike in joblessness in Barbados this year.
That may happen because more jobs may be lost in the manufacturing and retail services sectors.
That bleak warning came from Standard & Poor’s, the Wall Street credit rating firm, which said the Thompson Administration was seeking to boost employment at a time when it was also trying to achieve “fiscal consolidation” while satisfying “social demands in the midst of a difficult economic situation”.
“The task will not be easy,” S&P stated in a review of Barbados’ economy.
“With likely cuts in [Government] capital spending this year, the Government is looking for other measures to stimulate employment,” it explained. “One of these is to extend a US$65 million guarantee for the Four Seasons Hotel and Villa project, which, once started, should add about 700 construction jobs.
“Barbados’ unemployment climbed to about ten per cent in 2009, from 8.1 per cent in 2008. Tourism employment, however, has been sustained, although the number of working hours has been cut. Manufacturing and retail services are likely to see more job losses in 2010,” it added.
As S&P sees it, the social partnership between the Government, labour and the private sector has been a valuable process for the country. Its “protocols” link “moderate wage increases to commitments to share profits and improve productivity” and they have contributed significantly to the “public consensus that prevails on most of Barbados’ social and economic polices”.
In addition, the “incomes protocols have allowed both Government and business to assuage union demands without compromising the public purse and diminishing competitiveness”.
S&P plans to keep a close eye on what happens with negotiations about public sector wage increases, especially the idea of a wage freeze to help Government control costs.
“The negotiations with most of the trade unions regarding the 2010-2011 wage increases have not started yet, and they will likely take into consideration the difficult fiscal and economic realities the government is facing,” stated the Wall Street firm.
“In fact, the Government proposed a wage freeze in the medium term fiscal strategy it announced in March 2010.”

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