As painful as it is for the 550 workers, mainly women, who have lost their jobs at the Jockey International apparel factory in Hanover, no one should be overly surprised by the company?s decision to down-size its Jamaica operation. Neither should we expect the jobs that still remain to last for long. In all likelihood, Jockey will soon slash these and pull out of Jamaica all together. It?s writ in economics.

Jamaica had a decent run in the garment sector, beginning in the 1980s, when the United States provided preferential entry to its market, starting with clothing stitched in the Caribbean from fabric cut in the U.S.A. This was later widened to provide access to garments that were also cut in the region, once they were of textile manufactured in the United States. Indeed, by the start of the 1990s, nearly 30,000 women were employed at freezones manufacturing garments and the sector?s exports reached more than US$500 million annually. The good times, in so far as they were that, couldn?t last, for two reasons.

The first had to do with the North American Free Trade Area (NAFTA) between the United States, Canada and Mexico. Whereas under the Caribbean Basin Initiative there was a tariff on the foreign value-added from garments produced in countries and shipped to the U.S.A, clothing exported from one NAFTA member was free of duties. And in an industry that is notoriously foot-loose, this was a powerful incentive for the industry to flee Jamaica for countries where costs, particularly labour, were lower.

Then there was the ending of the Multi-Fibre Agreement (MFA), under which countries were able to allocate quotas for textile and apparel imports, thereby being in a position to grant special favours to whomever they wished.

Jamaica benefited from this system. The death of the MFA meant that cheap producers in China and elsewhere in Asia came into their own and that Jamaica and others would have difficulty competing on cost.

The upshot is that in the past decade, Jamaica has lost more than 20,000 jobs in the apparel sector. What is unfortunate is that we have not been able to create new jobs at a rate to absorb those shed in the apparel sector, as well as meet the
natural growth in the labour pool. We are not with thosewho claim that jobs in garments could have been saved with a range of fixes, except that included a significant depression of wages. Which is not to suggest that there is not a need for greater efficiency in the economy. But that efficiency will not be achieved, in our view, by cutting nominal wages.

It must be driven mostly by a significant improving in education and training, preparing people to grab opportunities in the natural growth areas of the global economy. This growth is now centred on information and communications technology (ICT), where Jamaica has made some headway, but still has a far way to go if it is to seize the benefits. But maximising opportunities in ICT at the higher levels demands highly educated workers, beyond the less than 40 per cent of Jamaican students who pass math at CXC or less and 60 per cent who pass English. A corollary to its promotion of education, government policy, including tax incentives, must also support research and development and the application of technology.

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