Hon. Panton: Unemployment rate closer to 18%

The (extended) unemployment rate may be closer to 18 percent, Albert Area Representative Honorable Tracy Panton suggested in Parliament on Friday.

"There is an urgent need for aggressive poverty-fighting initiatives to be employed by the Government of the day. ... If it ain't in the budget, it is not a policy of the government. This at a time when the unemployment rate is above 9% and possibly closer to 18% if the pre-2020 definition is utilized," Panton suggested during her comments on the national budget for the upcoming fiscal year 2022/23.

In 2020, the Statistical Institute of Belize (SIB), informed by changes in definitions advised by the International Labour Organization (ILO), amended its approach to calculating labor force statistics. The change ultimately reclassified approximately 49,000 persons as being outside the labor force, thereby, resulting in a 22 percent reduction in the size of the labor force to 168,630 from 217,471.

At the time, under the "Previous Definition," unemployment numbers were reported at 64,373. The number was just above 23,000 with the modified methodology, reflecting a 41,198 reduction in the number of persons considered by the SIB to be unemployed. Consequently, approximately 84 percent of the persons reclassified as being outside the labor force were persons that the old methodology would have reported as "unemployed."

For September 2021, the SIB reported that 23,251 persons rejoined the labor force. Using 41,198 as the starting point (however, this figure should have naturally increased according to trends), this would suggest that almost 18,000 persons who were originally classified as "unemployed" remain without work.

Once combined with the 17,644 that the "new definition" recognizes as unemployed, the "extended unemployment" statistic would be closer to 35,644. This would produce an "extended unemployment rate" of about 17% as the total labor force would increase from the reported 191,881 to 209,881.

The Extended Labor Force

The International Labour Organization (ILO) also provides a definition for what is called here the "extended unemployment rate." The ILO defines this statistic as follows:

"The combined rate of unemployment and potential labor force (LU3) represents the share of the extended labor force that are in unemployment or the potential labor force. In other words, it is calculated as: LU3 (%) = 100 * (Unemployment + Potential labour force) / Extended labour force."

The SIB reports the potential labor force at 21,737 as of September 2021. Combined with the number of persons unemployed (again, 17,644), the number for the "extended unemployed: climbs to about 39,400. The "extended labor force" is the aggregate of the "newly defined" labor force and the potential labor force. This yields a total extended labor force of just below 214,000.

Using ILO's "LU3" formula, Belize's extended unemployment rate would stand at approximately 18.4 percent. It is this figure that the former trade minister and current Albert area representative seem to have in mind.

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