OPINION – Soft figures

The ongoing economic slump has visible implications in casino revenues, visitor flows, and hotel occupation. These are obvious observation foci when one tries to gauge the impact of the city’s ‘closure.’ The effects on the labour force are less visible, at least in the short-term. But they are likely to affect the economy and society more profoundly and in a more lasting form. 

We still have no data for the last quarter of 2020. But the existing figures for the first three quarters suggest the impact on the labour force is possibly underestimated by the official data. Indeed, the unemployment rate climbed by 1.2 percentage points. It went from the astonishingly low level of 1.7 per cent at the end of 2019 to the still exceptionally low value of 2.9 per cent at the end of the third quarter. 

Of course, that reflects the fact that many of the first ones to lose their jobs were nonresident workers. They disappear from the local labour market statistics as they leave the territory. On the other hand, many companies started with less radical approaches, reducing the labour force in subtler ways.

Those included softer measures such as temporary lay-offs, reduced labour time, and compulsory holidays, to name the most obvious. That had a more visible impact on the under-employment rate. It climbed much faster, from just 0.4 per cent to 5.4 per cent during the same period.

Percentages alone, however, cannot tell the full story. Dramatic as they may look, these numbers are still trivial if we take the absolute changes into account. The unemployed ranks rose by just about five thousand people.

That amounts to little more than 1 per cent of the employment level at the beginning of the year. Total employment, on its side, went down by less than 7,000 people. With the economy in full dive and nonresidents being in the first line of fire, those figures seem unbelievably low. 

Of course, part of the explanation may lie in natural delays in reporting, plus adjustment lags associated with the milder measures mentioned earlier. But these can only be temporary and tell part of the story.

Further, they all have an impact on families’ incomes, contributing to accentuate the economic contraction. Other inconsistencies or unexpected features of the data apart, these almost too rosy figures suggest the real extension of the crisis is yet to become visible in the labour market data.