Addressing unemployment

Last Saturday, approximately 1,400 students graduated from the University of Guyana. Although some of these are already in the workforce, the majority will be new to the world of work. As has been the case with previous batches of graduating students, employment is on their minds. They have a right to be troubled, because the global financial crisis, among other things, has limited the amount of opportunities available to them. In developed countries which have been hard-hit by the global financial crisis, employment is a major concern for many graduates. Unemployment rates in developed countries have soared as more and more companies shut down operations.

Academicians, however, say that the best time to study is now. Jobs are difficult to get; and to avoid depression and frustration, young people should take up studies, or further their studies; so that by the time they leave their college or university, the economies would pick up and job opportunities would exist once again. Unfortunately for those who are graduating during these times, they have it bad.

Here, in Guyana, the situation is somewhat different. Unlike other countries, the financial crisis did not really affect us; and except for remittances, all sectors remained relatively unscathed by the crisis. The trouble is that employment has always been an issue; and when it comes to job creation, the ball is being tossed between the government and the private sector as it relates to who is responsible for it.

It may come as a surprise to many that job creation is a function of the private sector, whilst the government’s primary role is creating the climate that would allow the private sector to grow, and invest more to create these jobs. This, however, does not mean that the government is excused from creating jobs. Due to the turbulent economic times in which we live, governments are now seeing their roles as creating  employment – putting people to work doing just about anything they can think of or afford, rather than fostering an environment for job creation. This is what the government is going to have to do to help the new batch of graduates – and those of previous years as well – find jobs.

 Government is going to have to invest more into the economy to create jobs for these young people. This is because every investment it makes requires labour. In addition to this, in retaining its function to foster job creation rather than create the jobs directly, the government should consider offering a different set of incentives for companies reinvesting. These incentives should be separate from those offered for the setup of unique businesses.  They could be in the form of tax or materials’ incentives, or the like.  It is not enough to have a law granting benefits to private sector companies that focus only on new and unique investments; rather, there should be incentives to encourage reinvestments.

The government, however, is not the only party to be chastised for employment issues. The private sector is guilty of not executing its job-creation function properly. Guyana’s private sector is lethargic, and few companies are shouldering investments. The vast majority have become hugely complacent, making profits but not reinvesting in Guyana. Ironically, when the topic of reinvestment surfaces, these private sector companies are quick to point out what is wrong with the local economy, and how those things inhibit them from investing; yet, it is under those same conditions that their profitability soars.

While these realities are happening, our brightest are migrating to the Caribbean and North America to put their skills to use and to earn a living. Certainly, this is not a good situation for the country. Both the government and the private sector need to come together and create a strategy that would generate more employment for young graduates, and further national development.