By Steve Thomas Observer Nevis Editor
(Charlestown, Nevis) ” A slowing world economy produces lots of stories about government intervention, big bailouts, meetings of leaders and all sorts of high-profile doings that sometimes miss where it matters most: In the lives of everyday people. Workers, small business owners and company managers are on the front line of every economic downturn. They feel it first and hardest when the money stops flowing as it once did. This is a look at how they cope with the changes. It is helpful, though, to take a look at the big picture. Economist Dr. Everson Hull, a native of Nevis and Observer contributor, offered his perspective on the current situation and what we may expect. “These are difficult times,” Dr. Hull said. “The slower economy is going to have its biggest adverse effect on unskilled workers.” They are typically the last hired and the first fired.” This cohort group is also our most vulnerable group with a higher incidence of crime than other groups. If they are not gainfully employed they lose their self-esteem and their self worth and cannot build the resume that is critical for moving into higher-paying jobs that come with on the job experience. “The long term effects are profound.” The economy performs far short of its potential because it has not fully trained (workers) and absorbed some of its best and brightest,” he said. And the impact of unemployment reaches in all directions: “Because the system underperforms, it does not generate the fiscal revenues that are essential for meeting the needs of trade and for providing certain critical and basic services. We will find ourselves without the means for providing critical repairs to a defective airport fire truck; and without the means for providing a decent unemployment compensation check to our (potentially) displaced Four Seasons workers.” Four Seasons Nevis has been closed since it was damaged by Hurricane Omar in mid-October. The resort has announced it will not re-open until April 30, 2009. Currently, the full staff remains employed to assist in the repair work, but company officials recently said that no decisions have been made on laying off any workers. The Caribbean is not immune to global events, Dr. Hull said. “The world economic slowdown will have a significant adverse effect on Nevis. Many of our visitors from the U.S. will elect to vacation in places closer to home. As we have already seen, this will mean fewer flights to Nevis and fewer bookings at our hotel establishments, fewer employees to service these establishments and less business for our taxi drivers.” The effect on our fiscal revenues will be significant,” he said. Dr. Hull cited recent history in his discussion of the current situation. “We had a dress rehearsal for this event in 2000 when Hurricane Lenny struck and floored our flagship Four Seasons resort, displacing 420 workers.” Hotel tax revenues plummeted from 7.2 million in 1999 to 1.9 million in 2000. We were saved by a vibrant off-shore banking sector whose revenue gains substantially offset the loss in revenues from tourism.” In 2000, offshore company tax revenues increased to record high of 7.4 million,” he said.” “This year the situation is likely to be very different.” Because of the global financial slowdown, the mitigating effect of the influx of offshore revenues is going to be substantially curtailed.” At the Nisbet Plantation Beach Club, manager Jamie Holmes is keeping a close eye on the tourism trade. Although he does not expect a record-breaking year, he is looking for ways to control expenses and attract new business ” and he hopes to do it without hurting employees. “We”re trying hard to reduce expenses across the board,” Mr. Holmes said. “We haven’t been laying people off.” In the long-term, Mr. Holmes said, the quality of his staff is what brings people back to Nisbet Plantation. “The staff is our number one asset,” Mr. Holmes said. With 20 years in the hospitality business, he has seen job cuts during slow times and he understands what it does to workers. “It’s hard because you know you”re cutting into their income,” he said. To hold down expenses, Mr. Holmes said Nisbet was tightening its belt in numerous ways that doesn’t detract from the establishment’s reputation for first-class service. Some of the steps include finding new ways to recycle, cutting paper use, making sure unneeded lights are turned off when not needed, even reducing the time the hot tub is left on ” small actions that collectively can save money. It’s not just about cutting back, though. “We have to be aggressively marketing,” he said. “You”ve got to be better at your job.” In order to improve service, Mr. Holmes said he has increased communications with his staff to find ways to make the Nesbit experience more enjoyable. Different challenges face those who are self-employed. A Nevisian contractor, who asked not to be identified, said most of his jobs involve small repairs at home, gardening and general labor. His business has slowed, he said, but he’s not really feeling the pinch ” yet. “I”m getting less calls from some of my regular customers,” the contractor said. “I call some of them and they tell me they”re putting some things off.” Even with food prices stabilizing and gas prices falling, many customers are trying to hang on to more of their money until they see how the season goes, the contractor said. His other challenge is collecting from some customers. “Some people are paying slower. They ask me to come back in a week for my money. I can’t do much because they just don’t have it,” he said.
Coping With a Slowing Economy
By Steve Thomas Observer Nevis Editor