FRIDAY, OCT. 19: The alarmingly high rate of youth unemployment underlines the need for radical change in Bermuda’s economic -policies, an expert has warned.

“Youth unemployment is very difficult for Bermuda,” says Peter Everson, co-chairman of the Bermuda Chamber of Commerce economics committee. “It’s a pressing problem, but one that is shared with the US and the UK. We have got to come up with solutions which work for Bermuda.”

He was speaking after the latest Government statistics, for mid-May, revealed that more than a third — 36 per cent — of young people are unemployed. The youth unemployment rate is more than four times the unemployment rate of eight per cent for all adults on the island.

Bermuda College senior economics lecturer Craig Simmons said that young people — due to their lack of skills and experience — were particularly vulnerable in a recession.

He added: “It’s unfortunate because not having a job tends to follow young people for a long period of time.

“You also have to be concerned about the abundance of energy young people have – if it’s not being used for good, it might be used for something else.

“From a social perspective, we should be very concerned about youth unemployment.”

Mr Everson told us: “It’s very difficult at the moment for young adults of all ages, both for those leaving school and for those just leaving university with degrees.

 “The Chamber has been very consistent over the past three years that there has to be some fundamental changes in economic policies.”

He pointed out that the 60-40 rule restricting foreign ownership of Bermuda business dated back to the 1960s, while laws on immigration and land ownership were originally drawn up in the 1950s.

He added: “All of our major economic policies were devised in the 1970s and refined in the 1980s and 1990s and they are all focused on controlling and dampening growth.

“That is inappropriate when there has been a structural change and shrinking economy. These policies are enhancing the rate at which the economy is shrinking.

“These are some of the key aspects that need to be looked at afresh to see where they constrict economic activity. If it was decided they needed to be scrapped, we would then have to decide what to put in their place.”

The Bermuda jobless total compares to an 8.1 per cent jobless total for the UK in the three months to July – down 0.1 per cent on the previous quarter.

But unemployment rate among those aged 16-24 in the UK was more than double that rate at 20.5 per cent, a fall of 1.3 per cent on preceding three months.

Mr Everson said that the graduate rate of unemployment in the US was around 25 per cent – although it was masked by the amount of students opting to continue their studies and obtain a higher degree.

Winter downturn

But he said that was an option not open to many Bermudians who had acquired a first degree.

And Mr Everson warned that a seasonal winter downturn would mean more jobs gloom over the coming months.

He said: “Our members are reporting that the economy is still weakening and we’re also coming to the end of the cruise ship season. With that comes reduced activity in the winter months – many of our members are braced for a very tough winter period and they’re expecting more business closures over that period.”

Craig Simmons said that as governments and the private sector tightened their belts, investment in jobs dried up.

He added: “One concern I have is that the standard of living we enjoyed pre-2008 is considered the new bench mark – that would be a mistake.

“In some ways we got used to an economy on steroids; the question we have to ask is, ‘what is the new normal’? Politicians can’t answer that, individuals have to come to that answer and live accordingly, within their means.”

Minster for Economy, Trade and Industry Patrice Minors said that Government has introduced a number of programmes to stimulate the economy and boost job figures.

These include waiter’server training schemes, an overseas training course to train construction workers in drywall techniques, a nail technician programme and an accounting certification course.

She added that the Bermuda Economic Development Corporation (BEDC) was working with small and medium-sized businesses to help create new jobs, including help with start-up funding for new ventures.

Ms Minors said: “As evidenced by the consultation that is occurring around the evolution of Bermuda’s work permit policies, business and Government share an understanding that Bermuda is a strong country and has the potential to be even stronger.

“In tough times, it is important that we collaborate even more to overcone the challenges we face.

“The Government is committed to working with business to ensure that the economy grows and that more jobs are added to ensure greater employment opportunities.”

Ms Minors added: “One of our highest priorities is putting place new processes and procedures to make the One-Stop Career Centre a reality.

“We expect to launch this facility in February 2013, however the principles and philosophy that supports the One-Stop are current being implemented within the Department of Labour and Training so that officers are able to more effectively meet the needs of unemployed and underemployed clients.”

But OBA leader Craig Cannonier said the figures showed that Government policies were failing to pull the island out of the recession. He added: “This is not pointing in the direction we expect to go. We have a Government which continues to ask for solutions from OBA, but we have a Premier who gives a conference speech and says nothing about solutions she has to turn things around.”

And he predicted: “It’s simply going to get worse because there are no solutions coming from her.

“When you are talking about that many people unemployed and so many young people unemployed, Government policies just aren’t working.

“We are not coming out of this – things are getting worse and worse. To have these kind of figures has got to be disturbing for all Bermudians.”