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Job losses

It’s been said before, but bears repeating. The time it takes to release the results of the annual employment survey a year is a disservice to the community and to the policymakers who cannot make good decisions without accurate and up to date information.

To be fair, the headline number from the Job Market Report released yesterday, the net number of jobs lost, was in fact made public in February, so the fact that 1,400 jobs were lost between 2009 and 2010 is not a great surprise.

And the survey is also helpful in analysing just where and how those jobs losses are occurring.

In some cases, they reinforce assumptions. In others, they shed light on the reality of the recession.

The most powerful symbolic figure in the report is that Government, long the single largest employer in Bermuda, is now, under the term public administration, the biggest employment sector as well.

Bigger than international business. Bigger than construction. Bigger than hotels. Bigger than retail.

To be sure, it is only very slightly bigger than international business, and if categories were set differently, it might be smaller than, for example, restaurants and hotels.

But the general trend is clear. The private sector has shrunk much faster than the public sector, and both major foreign currency earners, tourism and international business, shed large numbers of jobs in the period.

It is also worth noting that by class of employment, the single largest number of job reductions took place among professionals, from accountants to computer professionals to doctors and nurses. This is concerning because professional jobs tend to pay more than unskilled jobs, and thus put more money into the economy.

That does not mean that blue collar jobs have not been lost as well. What is striking about this recession is that no one is exempt.

However, construction, which drove the local economy for a decade, has experienced the heaviest losses of any sector with more than 400 jobs lost, along with 24 reporting businesses.

These numbers bring home the gravity of the recession, and it is worth remembering that there was still some denial this time a year ago about how serious the downturn was. The job figures alone show that it is very serious.

A simple, and admittedly imperfect calculation should demonstrate this. If the economy shrank by 1,400 jobs between 2009 and 2010, and the median salary in 2009 was $56,000, then that means that incomes of worth $78 million vanished from the economy in that time. That means that as much as $78 million in taxes, rents, groceries, clothes, vehicle purchases, bank deposits, loan repayments and so forth were lost.

To be sure, the figure is inexact. It may be that more or fewer of the jobs lost were below the median salary line. A median is not an average. And some money earned in Bermuda will have gone directly overseas.

But the number gives an approximation of the loss to the economy. It is no surprise then that retail sales are down, that the rental market has softened dramatically, and that the streets seem emptier.

The question now is how many more jobs have been lost since August 2010. Anecdotally, it seems likely that the same number of jobs again have been lost.

That represents a dramatic reduction in the size of the economy.

In response, the Government’s actions have been paltry. Where cuts have been made, they have hurt those least able to protect themselves, such as the Sunshine League.

And the job creation schemes, while worthy and welcome, are late and small. Government has consistently underestimated the gravity of this recession.

More than job creation and priming the pump, what is needed is a thought-out strategy for revitalising the economy.

There are signs of a very slight improvement in tourism, although nowhere near enough to offset the declines elsewhere.

At the end of the last session, there were some signs that Government would ease some of the restrictions on international business and expatriate workers. Again, these were welcome but belated and small gestures.

What Bermuda needs is a deliberate targeting of markets that Bermuda can build on, and a nurturing of the businesses that are here.

Bermuda can only grow its way out of recession, and it needs to start now.

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Published September 01, 2011 at 10:00 am (Updated August 31, 2011 at 6:29 pm)

Job losses

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