The labour market is a market in which workers compete for jobs and employers compete for workers. Labor markets are based on the supply and demand of people in a country or location who are able and willing to work.
An internationally accepted definition of the labour force is the total number of persons aged 15 and over who are employed or unemployed but are actively seeking employment. In Jamaica, the labour force definition is basically the same as above except that for our local labour force individuals are recognized as a part of it as early as age 14.
The labour market is the demand for workers in an economy and the labour force is the supply of labour or are these persons who are willing and able to work. The ideal relationship exists when the demands of the labour markets meets the supply of the labour force. This situation rarely or never occurs on a holistic level in most economies.
Labour force statistics are an important measure of an economy’s potential. The larger the percentage of the population that enters the labour force, the greater the nation’s potential increase in output and higher standard of living. Growth in the labour force implies expanding potential. (Government of Canada, Economic Concepts: Labour Force).
Global labour Market Information has revealed that the global unemployment rate has increased by 0.9% between 2007 and 2009 (5.7% - 6.6%). This 6.6% global unemployment rate in 2009 means that there were 212 million persons unemployed worldwide. The 2007 world recession has caused most countries to suffer increases in unemployment rates. For the United States, their unemployment has move to 9.5% which represents one of the highest unemployment rates in the country’s history. Unemployment rates in other regions has been high as well, relative to what these countries or regions have been use to; for the Euro area its unemployment rates is listed at 10%, for Canada 8%, for the United Kingdom 7.8% and for Japan 5.3%. The recession has impacted significantly on world unemployment rates as the global unemployment rate has been declining for the 4 years prior to 2007.
Jamaica’s unemployment rate is ranked among the highest unemployment rates worldwide. The country’s precise position and the unemployment rate itself however depend on the source of reference as different agencies and countries have slightly different variations as to how unemployment rate is calculated. According to the Central intelligence agency (CIA) fact book, Jamaica has the 38th highest unemployment rate world wide at 15% as of 2009; there index consisted of 198 countries. This puts us in the top 23% highest unemployment rate worldwide according to the CIA index. On the MUNDI index Jamaica has the 68th highest unemployment rate worldwide at 11% as of 2009. This puts us in the top35% highest unemployment rate worldwide according to this index. The rates that appear on the MUNIDI index is more consistent with the rate we have seen for Jamaica from the Statistical institute of Jamaica, this is not to suggest that the MUNDI index is more accurate than the CIA fact book, as rates do depend on what factors are used to measure unemployment rate.
According to the Statistical Institute of Jamaica (STATIN), Jamaica’s average unemployment rate between 2005 and 2009 has been 10.638%. The average labour force size during the period was 1.26 million people, which means an average of 134,486 persons have been unemployed each year. Though our unemployment rate is still high relative to those of other countries, it has shown significant improvement in recent years. For the period of 1996 to 2001, the national unemployment rate according to STATIN has been an average of 15.58% annually. Recent years have shown large reductions in unemployment rates in Jamaica. During the period of 2004 to 2008 average unemployment has been 10.6% which represent almost a 5 percentage point decrease in unemployment over the period of 1996 to 2001. The recession has adversely impacted on the country’s unemployment rate, like most other countries around the globe, but for the most part the unemployment rate has remained at or around 11 to 12% during the period (2007 to 2010)
An analysis of the country’s unemployed labour force has revealed some serious concerns with regards to training and certification. The statistical institute reports that 72% (103,900) of the 144,350 persons that were classified as being unemployed in 2009 did not have any formal training at all. Three percent (4500) had vocational training but no certificate, 17% (24,200) had vocational training with certification and just 3.6% (5200) had either a degree or a diploma.
The top three highest paying industries (large establishments) in 2009 in terms of average weekly salaries according to STATIN were, Electricity, Gas & Water which pay an average weekly salary of $32,568, Mining $24,000 and Transportation, Storage &Communication $22,261. The other sector that averaged a weekly salary in excess of twenty thousand dollars was Finance, Insurance, Real estate & Business services. Manufacturing and Community, Social & Personal services were the two lowest paying sectors, averaging $12,454 and $13,339 respectively. Most industries showed increases in excess of 200% and even 300% over the 10 year period, 2000 to 2009, except for Transport, Storage and communication which only increased by 32% during that time.