Low unemployment cushions falling remittance in SVG — Finance Minister

People overseas are sending less money to St. Vincent and the Grenadines, but this is being cushioned by the single-digit unemployment rate, says Minister of Finance Camillo Gonsalves.

“… there are more people employed in St. Vincent and the Grenadines today than at any point in the history of St. Vincent and the Grenadines since slavery,” he said on WE FM on Sunday.

“We have that data. I would say that we have single digits, high single-digit unemployment in this country and I would say that you probably have another low single-digit number of people who could work but don’t want to work,” he said. 

The minister said the economy was buoyant, saying that businesses had reported, through the Chamber of Industry and Commerce, better performance this year.

He, however, said remittances had fallen.

“And the working theory that we have right now is it is because of the United States’ current crackdown on migrants,” Gonsalves said.

He said there are reports that in major metropolitan areas of the United States and areas where Vincentians live, US Immigration and Customs Enforcement (ICE) is “essentially camped out outside of these Western Unions and these MoneyGram offices”.

The finance minister said ICE has not been explicitly targeting people of Caribbean descent, as the initial focus appears to be on Latin Americans.

“.. they have been essentially waiting outside of these places and arresting people as they go in and out of these money transfer places,” Gonsalves said, adding that this has had “a chilling effect on the money transfer business, obviously.

“So, there are a lot of people who may not be fully regularised in the United States, but have a job. And every month, they would go to the Western Union and send down $100 or $200. And there are people who are actually fully regularised, but this thing has been a very scary experience for everybody.”

He said it seems that there is a decline in the volume of transfers.

“The data that we have to date is that it is not that people are sending less money, it’s that fewer people are sending money. And so, the remittance numbers have ticked downwards in country.

“Now, what we are seeing on the other side, while remittances are in decline, we are seeing a number of reports that employment is up in St. Vincent and the Grenadines, and up considerably.”

2022 unemployment was 10.8%

Gonsalves said that the last “firm data” that the government has is from 2022,  which said that unemployment was 10.8%”.

He noted that this was before the opening and full operationalisation of Sandals Resort.

“And it was before some other major construction projects were underway fully. We believe now that the unemployment number would be in single digits.”

He noted that he was referring to the standard definition of unemployment, “which is somebody who does not have a job but is looking for a job.

“I don’t doubt that there are more people out there who don’t have a job, but they ain’t interested in working.”

Gonsalves said contractors across SVG have complained to the government, “telling us that they’re having tremendous difficulty finding workers”.

He said this labour shortage is affecting the government’s ability to execute public infrastructure projects such as roads, bridges and clinics.

 “… the major constraint right now is not money, and it is not even contractor capacity,” he said, referring to machinery.

“The major constraint is labour,” Gonsalves said, adding that contractors are asking the government not to allow too much time to elapse between projects.

“And they’re calling us, and, for example, … saying, ‘Look, man, I have a job that is winding down in the next two weeks, please, please make sure that the next job you have for me starts immediately. Because if I go a week without paying these guys, they’re gone to somewhere else.’

“Because the demand for labour at that level is very, very, very high,” Gonsalves, adding that while some people refer to these workers as unskilled, he does not like the term.

“… a lot of the things that they do I can’t do…” he said.

The finance minister said that a few months in the construction of the new hospital in Arnos Vale, he has received three complaints from the contractor that they cannot get enough local workers “because there’s an arms race for this talent.

“Now, everybody is being paid above minimum wage and the rest of it. And they’re asking, ‘Can we bring in more non-Vincentian workers? Because we’re having a hard time finding Vincentian workers. Local contractors are saying the same thing.”

Gonsalves, however, said he hopes the decline in remittances is short-lived “because remittances play a very important part in the personal economies of many people in St. Vincent and the Grenadines and the family dynamics and family economies.

“So, I hope it’s a temporary downward blip. But while remittances have been down recently, employment has been up. So people have a job, more people have a job, more people have a little bit more money in their pocket. And I think that is also being reflected in some of the consumer numbers that we’re seeing.”

He said a 2022 survey measured unemployment as well as the number of people who are unable to work because of disability or some other situation. 

“That number in 2022 was closer to 20%. It was about 19%, I believe. As the numbers have declined in the formal unemployment sector, which has moved from 10.8% down, I would be hazarding a guess, but into the single digits, we also believe that the number of people just not working has also declined.”

He said NIS data say that 45,000 Vincentians work in the formal sector.

“If you look at the size of our workforce in our country, the size of our workforce is about 60,000 people,” he said, adding that the formally employed make up about 73% of the existing workforce.

He said the people who are employed but not caught by the NIS data, such as van drivers, farmers, and, among others, domestics, “… you can credibly say that they are adding another 10 or 12% to the employment figure.

“And that takes your unemployment number right down to about this 10, 15% unemployment.”

Gonsalves, however, said the labour force includes people who are still of school age.

He said the analysis also has to factor in other categories of people who are working age but are not looking for work because of their circumstances.

Among these, he mentioned people who are in training programmes, people still in tertiary education, those taking a gap year between their studies, and, among others, women who recently had a child and were not ready to go back to work.