Self-employment is not the answer

Aug 01, 2016 Features / Columnists, Peeping Tom

The supporters of the APNU+AFC were promised jobs during the election campaign. They were told that young people were jobless under the PPPC government. The manifesto promised jobs for the jobless.
The cry now from the coalition is that the jobs will have to come from self-employment. In other words, forget about what was promised. You have to work with yourself.  The young people are being urged to be their bosses. They are being told to go into business even though most of them have no business acumen.
The President has urged that people not look towards the public service, the police and the army for jobs. He says they have to look for self-employment.  It is strange that he is saying do not look to the police for jobs since the police is woefully short of ranks.
The Minister of Finance addressed the issue more elegantly. He said the job of the government is to create an enabling environment for the creation of jobs by the private sector. In other words, do not look to us, look to the private sector for the jobs.
The private sector is saying that things are tight in the economy. They are claiming that money is not circulating. The jobs are therefore not available, in the numbers required, within the private sector.
This is not what the supporters of the APNU+AFC had in mind when they cast their votes in May of 2015. They did not expect these explanations from the government. They expected that jobs would have been created, thousands of jobs so that the young people who were unemployed under the PPPC could gain employment.
A great many unemployed persons have gotten jobs since the new government took over. A good estimate would be about three thousand persons have been employed by the government itself. They have done so, unfortunately, at the expense of other persons who were either dismissed, forced to resign or whose contracts were either terminated or not renewed. In other words, persons have been let go to create space for others.
This is not job creation. It is job substitution. One set of workers have been substituted for another set of workers.
When the new government came in, they were under a lot of pressure to find jobs for their supporters. The new Ministers were spending a great deal of time meeting persons whose only mission was to either find a job for themselves or someone they knew. Also, a great many retirees suddenly decided that they wanted to work.
The dismissals and terminations therefore did not represent creating new jobs. It involved making space for other persons to be employed. The PPP, so far, has failed to produce a comprehensive list of all those dismissed, forced to resign or whose contracts were not renewed. This list may run into the thousands. But it is obvious that thousands have been let go or are gone from their jobs since the new government took over.
Despite employing so many persons, there is still a deficit in the job market. Young people in particular are not finding work. They are becoming frustrated. They do not know what to do. The supporters of the APNU+AFC, however, are restrained in criticizing the government. They do not want to make their government look bad but they are feeling the pain at the bottoms.
The government’s answer is self-employment. But self-employment in a small economy like Guyana will not create many jobs. It is not the answer.
The PPP had a different plan. Their plan was to create jobs through specific investments, not through the creation of an enabling environment.  The PPP felt that they had for twenty years been creating an enabling environment and it was time for job-creating investments. They promised 10,000 new jobs. They had plans to back that promise. There were plans for industrial parks and call centers. They had gone as far as to provide buildings in rural areas which were intended to house call centers.
One call center firm had a major expansion which was started under the PPP but which was completed under the new government. Another call center company which was granted approval under the PPP was established under the new government and began with over 750 jobs. So the private sector has been creating jobs.
The problem is that business, as distinct from the economy, is in a slump. There, are pressures on businesses to not expand. Guyanese businesses have a reputation, second to none when it comes to retaining workers in times of economic and business slowdown. Guyanese businesses do not usually lay off persons. So there have not been mass layoffs. This will come later this year when Wales Estate closes
The government is therefore not faced with a problem of job losses. In other words, the situation is not getting worse. It is not as if there is a net decline in jobs in the economy.  But the demand for jobs is so high that there is still a clamor for jobs.
The government’s answer to this need for jobs is to tell the unemployed to create your own employment. This however is easier said than done. Self-employment is an excuse, not a solution.

1 thoughts on “Self-employment is not the answer”

Surujpaul Rampersaud August 1, 2016 at 1:29 pm

It is a wild card statement for the government to say that young people should go into self employment with suggestions like peddling goods. The government has not suggested any concrete plans to motivate young people to pursue self employment and this can be seen as a severe indictment
In most developed countries the private sector is usually seen as the engine for growth. However, the government should provide the private sector with incentives that will facilitate expansion thus creating scope for employment. These measures should include, contracts, tax breaks etc.
However, we are seeing that the government is bent on raising revenues through taxation to run the economy. This does not make economic sense because we cannot tax our way to prosperity.