Economist warns Barbados' growth could be hampered by UWI fallout
With thousands of Barbadians unable to attend the University of the West Indies (UWI) Cave Hill Campus without Government’s tuition assistance, an economist is warning of major implications for the country, including “wage moderation” and a rise in unemployment figures.
Ryan Straughn, past president of the Barbados Economics Society, told Barbados TODAY following yesterday’s revelation of a significant decline in student registration, that the country’s chances of experiencing economic growth would be hampered by the fallout.
He said while he expected Government would realise “some savings” from not having to pay the tuition costs for far fewer students, it is “not a good thing that you have between 2,000 and 3,000 people not being in a position to better themselves educationally”.
Registrar of the Cave Hill Campus Ken Walters disclosed yesterday that 2,484 fewer students – 28.51 per cent less – are attending the institution this year when compared to the 2013/2014 academic year.
“The direct implication of that if we have an almost 30 per cent drop means that those persons would now clearly be potentially classified as unemployed. Therefore, one would expect then that the unemployment rate would increase as a direct result of the decline in enrolment,” Straughn argued today.
“I am not sure, based on the projections of the economy, that if they are not able to afford to go to university now that they will be able to do so next year or the year after. Therefore, in the short and the longer term, I think the impact will be great because people will not be in a position to reach their full potential and it is something we need to keep a close eye on,” he further warned.
Straughn explained that if individuals were unable to obtain a tertiary level education, not only would there likely be an increase in unemployment but some companies would engage in wage moderation.
“If you don’t have any qualifications and you don’t have any experience to speak of then that really doesn’t bode well going forward in terms of wages,” he said.
“Given that you have so many people added to the [unemployed] then it should lead to some moderation in the base negotiation of excess supply of labour going to the market . . . Businesses should be able to implicitly benefit from increase in supply of labour, but then that does not bode well for the actual employee because in an environment where costs continue to rise, wage moderation is not the best thing at this time,” warned Straughn.
On the issue of unemployment, the economist said he was not surprised that statistics from the Continuous Household Labour Force Survey showed the figure had climbed from the average 11.7 per cent at the end of March to 13.2 per cent at the end of the second quarter of the year.
He attributed that to the mass public sector layoffs, most of which took place towards the end of the first quarter, and possibly some restructuring in the private sector.
“What we have to be very focused on is how do we get growth back in the economy, such that we can see a moderation in the unemployment going forward.”