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Underutilized Labor! 5% Unemployment with notable underused workers: statistics say

Belize has an unemployment rate of five per cent, but other International Labour Organization (ILO)-approved statistical measures show that the country has noteworthy levels of labour underutilization.

As the ILO explains, the popular unemployment rate is only one measure of labour underutilization, which looks at the degree to which human resources in a particular economy are not used to the fullest potential.

“Even though in most developed countries the unemployment rate continues to prove its usefulness as an important indicator of labour market performance, and specifically, as a key measure of labour underutilization, in many developing countries, the significance and meaning of the unemployment rate could be questioned,” writes the ILO. “Thus, in this context, other measures should supplement the unemployment rate to comprehensively assess labour underutilization, such as time-related underemployment and potential labour force indicators.”

The potential labour force (PLF) is consistent with the revised international standards for measuring labour force underutilization. The PLF looks at people old enough to work who are (a) actively looking for work but were not “available to start work in the reference week, but would become available within a short subsequent period.” This first group is called “unavailable job seekers”.

A second group, (b) is not actively searching for work but “wanted to work and were available in the reference week (available potential job seekers).”

Among the other statistics that the international standards promulgate is a statistic dubbed Labour Underutilization No. 3 (LU3)—with the standard unemployment rate classified as “LU1.” The LU3 statistic combines the new method’s calculations for the “unemployed” with the PLF.

The Statistical Institute of Belize (SIB) informs that as of October 2022, Belize’s PLF was at 14,675 persons. The SIB also reported that Belize’s number of unemployed was 9,644. Combined, the former and latter total 24,319. Once divided by the aggregate of the labour force (191,728) and the PLF, it yields an LU3 rate of 11.78%.

The SIB, however, does not currently report this statistic. In speaking with The Reporter on Thursday, SIB Director General Diana Castillo-Trejo said that, as a general practice, the SIB will always endeavour to conform to international standards. For this reason, she underscored that it is very likely that the other Labour Underutilization statistics may form part of the institute’s reporting as it helps to keep the country’s data in line with international benchmarks.

Economist and University of Belize lecturer Dr. Philip Castillo echoed a position similar to Trejo’s, telling The Reporter that the SIB should continue to align its reported metrics with international standards that help to augment the degree of comparability across jurisdictions.

Castillo also expressed concern that too often, persons make the mistake of comparing “apples with oranges” as they try to compare the outputs of the “new” methodology with the “old” unemploymeent statistics. “Ther are global changes that the ILO put forward to make the data across countries more comparable,” Castillo underscored. “However, at times, politicians would compare apples with oranges instead of apples with apples. For example, saying unemployment decreased from 30 per cent to 5 per cent is not an ‘apples with apples’ comparison.”

Castillo also made the point that it is not appropriate to compare post-2020 “unemployment rates” with their pre-2020 counterparts as they are measured differently.

Labour Underutilization II (LU2)

As previously stated, there are multiple measures for labour underutilization. While LU3 and LU4 have not been reported, the ILO’s database does calculate LU1 and LU2 for Belize.

In 2021, the latter was estimated at 28 percent, while the former—the unemployment rate—was 10.2 percent.

LU2 makes use of a statistic referred to as “time-related underemployment.” This is defined as follows: “Persons in time-related underemployment are defined as all persons in employment who, during a short reference period, wanted to work additional hours, whose working time in all their jobs was below a specified threshold of hours, and who were available to work additional hours if they had been given the opportunity to do so.”

In terms of PLF, it is worth noting that Belize’s PLF has decreased over the last two years, falling from 21,737 in September 2021 to 14,675 a year later.

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