Statistical Institute of Jamaica (Statin) reported in 2023 that youth unemployment stood at 17.2 per cent, more than double the national average. (Photo: Mongkolchon Akesin)
Trapped between hustle and hope
Jamaica’s youth are increasingly trapped in an economic paradox, high educational attainment in some sectors coexisting with persistent unemployment, underemployment, and an overwhelming reliance on the informal economy.
The Statistical Institute of Jamaica (Statin) reported in 2023 that youth unemployment stood at 17.2 per cent, more than double the national average, with female youth particularly disadvantaged. At the same time, over 43 per cent of the Jamaican labour force operates informally, without legal protections, pensions, or health coverage. This reality contradicts national visions of progress and highlights systemic failures in education, labour market alignment, and youth development policy.
Columns
April 18, 2025
Behind every diagnosis, treatment, and cure, there's a team of unsung heroes working tirelessly in the laboratory. I am Toshiba Channer-Wallen, a very...
Jamaica’s Informal Economy
Latest News, News
April 19, 2025
TRELAWNY, Jamaica — Two men are now dead following a multi-vehicle collision on the Braco main road in Trelawny on Good Friday. The deceased have not ...
The informal economy is often framed as a space of ingenuity and resilience, a testament to Jamaican hustle culture. However, this framing masks the chronic vulnerabilities that informality imposes, particularly on young workers. Informal workers typically lack access to social protection systems, such as the National Insurance Scheme (NIS); are excluded from pension plans; and face barriers to credit and investment.
The Planning Institute of Jamaica (PIOJ) notes that most new job creation in recent years occurred in low-wage service areas, such as wholesale and retail trade, hospitality, and “own-account work”, the latter being a euphemism for informal vending, gig labour, and freelance trades. These roles offer neither job security nor career mobility. Importantly, many young people are forced into informality, not by preference, but because the entry points to formal employment are blocked by credentialism, geographic inequality, and lack of financial capital.
Editorial
April 19, 2025
Among the more intriguing articles published in the sports section of this newspaper this Holy Week was of a recent function to honour and support stu...
To evidence the aforementioned, the World Bank’s 2022 Human Capital Report noted that 45 per cent of Jamaican youth, aged 15–24, were not in education, employment, or training (NEET). Many of these individuals live in rural or inner-city areas where job availability is sparse and where barriers such as poor transportation, crime, or lack of Internet access obstruct opportunity. This geography of exclusion ensures that the informal economy continues to absorb the ambitions of those left behind by the formal sector.
Trained but Trapped
Despite large-scale investment in education and training, the Jamaican education system has not kept pace with labour market needs. HEART/NSTA Trust, Jamaica’s largest vocational training institution, reported that in 2022 only 38 per cent of its graduates were placed in jobs within one year of certification. This signals a mismatch between training content and industry demand.
Moreover, traditional academic pathways continue to dominate, while high-growth industries, such as digital technology, renewable energy, and logistics lack qualified local workers. The Global Services Association of Jamaica (GSAJ) identified a shortage of digitally skilled youth in areas like cybersecurity, software development, and artificial intelligence (AI) integration, fields in which Jamaican youth could thrive with the right intervention.
This misalignment is compounded by the high cost of tertiary education and the lack of flexible, modular training options for working-class youth. Many informal workers cannot afford to pause income-generating activities to return to school. Therefore, any attempt to shift youth from informality to formal employment must involve rethinking how and where training is delivered.
Gendered Dimensions of Economic Exclusion
The impact of informal work is even more pronounced among young women. Women constitute the majority of own-account workers in domestic services, food vending, and beauty services, sectors that are not only under-regulated but also disproportionately impacted by economic shocks, such as the COVID-19 pandemic. According to the Caribbean Policy Research Institute (Capri), Jamaican women in the informal economy saw a 52 per cent decline in earnings between March and December 2020, compared to a 28 per cent decline among men.
Despite national commitments to gender equity, structural barriers, such as unpaid care work, limited access to capital, and lack of employer protections, continue to push women into informal labour. Alarmingly, only 13 per cent of women entrepreneurs in Jamaica operate formally registered businesses, compared to 28 per cent of men. To truly address youth unemployment and informality, gender-aware policies must move from rhetoric to implementation.
A Road map for Transformation
Solving youth unemployment and reducing reliance on the informal economy requires systemic reform. Below are five evidence-based, practical solutions supported by existing research and policy recommendations:
1) Launch a National Youth Employability Strategy (YES Jamaica): This comprehensive policy must include digital and green skills certification, industry-led apprenticeships, and rural-focused career services.
2) Create a micro-formalisation framework for the informal economy: Reframe formalisation not as taxation but as empowerment. Use mobile-based registration and e-ID systems to help informal workers quickly register as sole traders or cooperatives.
3)Establish a gender-smart enterprise fund for women under 30: This fund would offer grants, micro loans, and mentorship to young women in both rural and urban areas. Businesses in caregiving, digital services, and agro-processing would be prioritised, especially those creating jobs for other women.
4)Retrofit community centres as career labs and entrepreneur spaces: Across Jamaica, underutilised community centres could become youth career laboratories equipped with computers, Wi-Fi, business coaching, and access to financing tools. This meets youth where they are and reduces rural-urban disparities.
5) Mandate paid internships and apprenticeships in high-growth sectors: Revise labour laws to make it compulsory for companies above a certain size to offer structured internships to persons under 25, with stipends subsidised by the Government. Focus on industries with strong export potential, such as tourism technology, animation, logistics, and medical services outsourcing.
Jamaica’s youth are not short on ambition, they are short on structured, sustainable pathways to economic participation. The informal economy, while useful for short-term survival, cannot be the foundation for national development. As long as formality remains exclusive, expensive, and irrelevant to youth realities, informality will persist. Solving this crisis demands rigorous policy reform that treats youth not just as beneficiaries but as agents of transformation. Jamaica cannot afford to continue losing its future to underemployment and economic impoverishment.
With bold, coordinated action, the country can transform from a hustle-based survival economy into a nation built on dignity, innovation, and inclusion.
Shawn Smith is a human resource and social work professional and advocate. Send comments to the Jamaica Observer or shawnthesocialpractitioner@gmail.com.
