Dissecting Jamaica’s labour shortage
The American Trucking Associations (ATA) estimates that there is shortage of approximately 80,000 truck drivers in the United States (US). In the United Kingdom (UK), the Road Haulage Association Limited estimates a shortage of 100,000 truck drivers — or lorry drivers as the British would say.
Not surprisingly, a similar story is playing out in Canada. The Canadian Trucking Alliance estimates that the industry had approximately 23,000 vacancies in 2021; this number could rise to 55,000 by the end of 2023.
Barzelle Wright, president of the Port Trailer Haulage Association, recently lamented the fact that drivers have been migrating from Jamaica to the US, the UK, and Canada. Wright made clear that the migration of truck drivers from Jamaica is not a new phenomenon. And, with the shortage of drivers in the US, UK, and Canada as well as the concomitant increases in their wages, it is reasonable to expect that there will be higher levels of migration of Jamaican truckers to these countries within the coming years.
Of course, Jamaica’s trucking industry is not the only sector that has been and will continue to be affected by the migration of skills. Indeed, Jamaica has lost many teachers, nurses, and other tertiary graduates over the years. In recent weeks, various stakeholders have “rung the bell” about the worsening shortage of skilled labour in the Jamaican economy; the construction industry was singled out.
The late W Arthur Lewis, St Lucian economist and winner of the Nobel Memorial Prize in Economic Sciences, provided a framework within which the migration of skills from Jamaica can be viewed.
Lewis’s famous model explains how an economy can experience rapid accumulation of capital — physical and human — and by extension rapid economic growth. In Lewis’s model there is a large reservoir of labour which keeps wages in the capitalist sector low. With wages kept low, firms, whether private or State-owned, could reap large profits which are reinvested, thereby increasing the accumulation of capital.
While Lewis was speaking about a single economy with two sectors, subsistence and capitalist, the dual economy framework can be applied to the economic relationships between pairs of countries — a developed economy and a developing economy — or put differently, a developed economy and an underdeveloped economy.
Developing economies are a source/reservoir of labour for developed economies. The enslavement of Africans in the West Indies is an example of powerful countries, capitalist if you will, benefiting from cheap labour, reaping large profits, and reinvesting said profits for the sustainable advancement of their economies. The story continues today.
Without the reservoir of labour from developing economies, developed economies would experience lower levels of growth.
Indeed, immigrant labour keeps wages down since they are more willing to do certain jobs without demanding higher levels of remuneration. Put differently, immigrants have lower reservation wages than nationals. As examples, we are all familiar with the exodus of our experienced teachers and nurses who have built up fine reputations in London and New York. Further, the novel coronavirus pandemic has shown the critical importance of immigrants as essential workers; workers who keep the cities of the developed world running smoothly.
However, the story does not end there. Dr Michio Kaku, a respected theoretical physicist, asserts that the US scientific community benefits immensely from foreign scientists, whether in the academy or industry. These scientists contribute immensely to research and development and by extension economic growth.
Indeed, the vast differences in per-capita incomes across time has been attributed to technological advancement. According to the World Bank, in 2018 the US spent about 2.83 per cent of its gross domestic product (GDP) on research and development; Germany, Japan, and South Korea spent larger percentages. China spent 2.14 per cent of its GDP on research and development in 2018, but has been steadily increasing the amount from around 0.893 per cent since 2000.
On the other hand, developing countries like Jamaica are unable to achieve their true potential. Public funds are spent on education, but a significant portion of the benefits, the human capital, leaves, to the benefit of already “greener pastures”.
Yes, remittances are received in return and constitute a significant amount of much-needed foreign currency. However, these remittances are not likely to compensate for the vicious cycle of skill loss. For example, when we lose our best and brightest teachers it means that future generations of teachers in training and students will be at a disadvantage.
The International Monetary Fund publication Unleashing Growth and Strengthening Resilience in the Caribbean notes that, “[f]or the Caribbean, remittances and emigration, on net, adversely affect growth”.
So how do we proceed?
The importation of labour to meet various needs is a characteristic feature of the globalised world we live in; we cannot stop the migration train. Aside from the physical importation of labour, we must also consider the provision of services where the provider does not physically travel to the country demanding the service — cross-border supply, the Mode 1 definition of the World Trade Organization’s General Agreement on Trade in Services (GATS).
The real issue, therefore, is one of volume, placement, and source. How many people do we need for a particular period, for what types of jobs, and from where will we recruit them?
This information must be determined and is necessary for short-term and long-term planning. It is clear, too, that increased efforts must be put into education and certification, from kindergarten to tertiary, including vocational, remedial, and continuing education. Particular attention needs to be paid to improving the early childhood educational experiences of every child across Jamaica; every great edifice begins with a strong foundation. As it stands, only a select few have been privileged to access excellent early childhood educational opportunities.