Editorial | The greying of Jamaica

Pearnel Charles Jr’s signal that the Government – or at least the labour ministry, which he heads – has begun to think about how to keep Jamaicans in the workforce longer is a welcome development.

Indeed, as this newspaper suggested when it addressed the matter in January, the urgent need is for a deep national conversation on the implications – economic and social – of Jamaica becoming an increasingly grey country. The Government could kick-start that discussion by having Parliament’s Economy and Production Committee convene hearings on the policy on elderly citizens, tabled nearly two years ago. The contours of the debate would, however, be expected to widen to embrace the myriad issues associated with this question.

Mr Charles raised the matter of an ageing Jamaica last week at the launch activities related to the island’s observance of Labour Day on May 23, and against the backdrop of the health ministry’s data confirming that the island’s population remains on a trajectory of decline as women of childbearing age have fewer children than in the past.

Jamaica requires a fertility rate of 2.1 children per woman to keep its population stable. But according to the documents presented to Parliament last week by the health minister, Christopher Tufton, the figure was 1.9 in 2021, compared to 2.5 two decades previously. In the early 1980s, the island’s fertility rate was over 3.6.

But while women, especially those in the educated middle class, are having fewer children, Jamaicans are living longer. At the start of the 1980s, for example, Jamaicans, on average, lived 69.4 years. In 2022, life expectancy at birth was 74.2 years – and rising.

“A big part of what we’re discussing in the ministry now is how we contemplate the future of work,” including integrating older people in the workforce, Mr Charles said.

“We have a lot to think about in terms of the new frontier in which all citizens will now have to participate to their full capacity,” he added.

VIABLE WORKING POPULATION

The potential crisis in the labour market, to which Mr Charles alluded, is not immediately apparent. Over six in 10 Jamaicans are in the 15 to 64 age group – a cohort that, in the normal scheme of things, makes up the vast workforce. That, on its face, suggests that the island should have a viable working population well into the 2030s.

However, the trend, especially if there is no significant policy action to cushion the effect, points to potentially significant dangers.

The so-called dependent elderly, people over 65, already account for nearly 10 per cent of the population, and are expected to rise by another percentage point by 2030. But when the age threshold is lowered to 60, the elderly demographic rises to nearly 14 per cent of the population and constitutes the fastest growing segment of the population, rising nearly two per cent per annum. That trajectory is expected to be maintained into the 2030s.

Given the country’s low birth rate and robust outward migration, an immediately obvious problem down the road is having a sufficiently large, and productive, workforce to sustain a substantially greyer population.

There are several factors that complicate this issue. First, only a bit more than 11 per cent of Jamaica’s employed labour force of more than 1.3 million people are members of private pension schemes. And perhaps the equivalent of a quarter of the labour force is enrolled in the Government’s National Insurance Scheme, which is mandatory for all workers, age 18 and over. The bottom line: large swathes of elderly Jamaicans face tenuous circumstances.

These downside factors are exacerbated by other structural problems. Despite the current low unemployment rate of 4.2 per cent, for instance, tens of thousands of young Jamaicans – mostly poorly educated and without skills – remain outside the labour force; economic growth remains sluggish; and labour productivity continues to decline. This group is a major contributor to the country’s high level of criminal violence. It will require much to transform them into an engine for economic growth.

SUPPORTING MECHANISMS

In the circumstances, this newspaper agrees with Mr Charles that lifting the retirement age, currently at 65 for most employees, should be high on Jamaica’s agenda. For, as we have argued in the past, many people of that age, and older, are not only capable of work, but have valuable skills that should not be lost to the economy.

Indeed, several countries, conceding their inability to provide the social safety nets to support their longer-living, retired populations, are extending the mandatory period before people have to leave the workforce.

However, the solution to the greying of Jamaica is not merely keeping older people in employment longer. It has to be recognised, too, that ageing comes with its own social, psychological and physical problems. So, if older people are to remain in jobs for longer, the supporting mechanisms and social attitudes that must underpin this have to be frankly and rationally addressed.

Additionally, the other factors that have kept Jamaica as a low-wage, low-growth, low-technology and low-productivity economy must be robustly confronted. In other words, the national conversation about greyer Jamaica cannot, or should not, be separate from the ones about education transformation (per the Patterson Commission Report), labour market reform, or formulating an industrial policy. That overarching discussion must begin now.