Dear Editor,
Allow me to comment on the SN Editorial on March 18, 2025 “Largely voluntary unemployment”. On March 8th, the Private Sector Commission (PSC) told an International Monetary Fund (IMF) delegation which was in Guyana for Article IV consultation that unemployment in Guyana is “largely voluntary”.
My aim here is not to add to or subtract from the SN Editorial, which is self-explanatory. Rather, the purpose of this letter to call attention to the need for Guyana to start conducting labour force surveys on a systematic basis. I realise this is a complicated and costly task, but unless policymakers have good data, they would be working in complete darkness on matters of policies for ensuring the country has adequate numbers of people with varied skills for its long-term development.
Guyana has been discovering that labour — more broadly human capital — is the binding constraint on its development, limiting its capacity to invest in productive physical capital. The voluntarily unemployed choose not to work for various reasons:
a) The minimum/ reservation wage they are willing to work for is higher than the current market wage;
b) People are searching for better job;
c) People are moving between jobs; and
d) People have sufficient income from other sources like savings, government transfers like the G$100,000 “government cheque” on a regular basis.
The most plausible explanation is (a); point (b) to some degree. Both may be due to the higher cost of living that makes the living wage higher than the going wage. Jobs in Guyana are scarce, so you can dismiss employment hopping, point (c). Finally, point (d) doesn’t apply as close to half of Guyana lives below the poverty line ($5/day).
If we accept (a) and (b), then the result will be unemployed people, or reduced hours per employee, as employers would not be willing to pay the reservation wage/worker, or for the hours that a worker would like to offer. This form of unemployment that the PSC is calling “voluntary” may be a sign of severe underemployment, where people are “multi-tasking” across employers to make the hours for a day’s living wage. Or worse, people with education — three “A” Levels at one sitting, or a U.G. graduate — driving taxis, doing private tutoring, or both.
The solution is not just finding skilled workers, matching jobs with the skills, but being mindful of distance; hence, also creating job opportunities across all ten regions as labour is not mobile in Guyana (and for good reasons), whilst employment opportunities tend to be concentrated in and near urban centres.
Unfortunately, those skilled jobs will not be in offshore oil which is an enclave operation, separated from the mainland by vast ocean, highly capital intensive, but, instead, in the non-oil sector. This has been the experience of Trinidad and Tobago where employment in the oil and gas sector, as a percentage of total employment, never exceeded 4.4% (1991-2023) and the average was just over 3%. At its maximum in 1991, the sector employed only 18 thousand.
As far as employment is concerned, Guyana could learn a lesson from that piece of information.
Sincerely,
Terence M. Yhip
