It will take several quarters yet for there to be genuine talk of reactivation

It will take several quarters yet for there to be genuine talk of reactivation. | EFE

Andrew EdePalma03/08/2021 10:05
TW
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July was a month of economic reactivation. So went a headline. Tourism had brought buoyancy to all sectors on the islands. Things were on the up, and just look at what last week’s Labour Force Survey had revealed - 60,300 more people in employment in the second quarter. From 502,000 people in work in the first quarter, the number had risen to 562,300. And what do you know? These 60,300 had all been on ERTE (furlough).

Or this was what the report stated anyway, at which point I started to scratch my head.

The methodology for the Labour Force Survey and for the monthly employment figures classifies workers on ERTE as employed. 60,300 new employed previously on ERTE? (As footnotes to April to June employment figures, I would point out, 12,495 employees came off ERTE, leaving a total at the end of June of 21,290.)

Nevertheless, wasn’t this good news? 60,000-plus more employed? Of course, but as we know there are an awful lot of temporary jobs knocking around, while we also have to be aware that people still on ERTE may well end up being ERE, i.e. made redundant.

The third quarter, unless things go horribly wrong tourism-wise, will show better figures, but then comes the winter, businesses’ reckonings after a season during which they will have been doing well to cover costs, amassed debts, and what may be an increase in the minimum wage.

It will take several quarters yet for there to be genuine talk of reactivation.