OPINION – Labour data

The changes relating to the operation of VIP rooms in casinos have been prominent in the news. They brought to the fore, once again, concerns about the consequences on employment. We can indeed expect that labour demand will be affected. Such effects will direct, resulting from the premises’ closure; and indirect, touching their service providers.

It may also affect other activities more remotely (if at all) related by changing the general expectations concerning the speed and extent of the economic recovery. Indeed, we will wait for future data on the labour market with increased apprehension. 

Labor data has shown in the past an inclination to display figures that would be unexpected, if not altogether surprising, in other economic geographies. Definitely, the front buffer provided by the non-resident workers operated practically as one would expect. Their number decreased continuously from their peak in the last quarter of 2019, when they were on the brink of reaching 200,000 persons.

Still, one might speculate that the contraction – around 12 per cent of their total – was smaller in relative terms than might be expected, given the seriousness of the contraction and the protection provided for the local labour force. After all, the economy has been running well below its potential for seven quarters. 

Perhaps more surprising is the almost absence of effect in total residents’ employment. The latest data (third quarter) indicates a loss of just about two thousand jobs compared with the same period two years ago – less than one per cent reduction. Even allowing for the rise in underemployment (small in absolute figures), the global effect on employment appears quite muted.

The salary data is equally perplexing. The overall median salary is currently precisely where it was at the end of 2018 and only marginally below the peak reached in 2019.  On the face of it, the crisis hardly touched the wages. Part of the effect may be a statistical artefact.

The most significant job losses were among the non-resident workers, so the share of locals (who benefit from a wage premium) in the labour force grew. But that alone cannot possibly explain such a modest impact.

Maybe the figures can be easily understood by those with access to more disaggregated data, and their explanations will be forthcoming. Meanwhile, before expecting too much from future numbers, we should try to grasp why the existing ones seem to show so little.