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Going inside the Unemployment Relief Program (Part 2): Social Security hurting from the drop in employee contributions

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Posted: Friday, June 12, 2020. 1:04 pm CST.

By Aaron Humes: The report by the Economic Oversight Team on the Unemployment Relief Program (URP) introduced in March notes a significant drop in employee contributions to the Social Security Board (SSB), which could play havoc with that statutory board’s plans.

It also notes that as the economy rumbles back to life, some sectors appear not greatly affected by the COVID-19 pandemic, mostly as a result of interventions by the Government.

According to the report, while expected, SSB lost almost 5,000 contributors month over month from February to March: 12,785 in February to 7,979 in March. These are among approved URP applicants who are normally taxed from their salaries to pay SSB contributions alongside their employers. April’s figure was just 2,109 and the number is expected to decline further in May.

There are no figures for those employers generally who let contributions slide during “hard times” in March and April.

We will have the breakdown of unemployed who applied for URP in a later story, but there were sectors that did not stop even during the worst of times. These included:

  • Supermarkets/department stores, hardware stores,
  • Tortilla makers and bakers,
  • Cane farmers/cane cutters:– the sugar season carries on
  • Cable TV/Internet companies
  • Road construction companies
  • Moneylenders, pawnshops, banks, credit unions
  • Aquaculture, CPBL, Banana growers

Note that many of these were declared either “essential” or “approved” businesses that were allowed to operate, albeit with reduced hours, during the State of Emergency.

Some employers confirmed that there were no layoffs.  In addition to a number of privately-owned companies, these include:

  • Government of Belize;
  • Schools (except for janitors, cooks/cafeteria, preschool teachers, etc);
  • Public utilities (except for contractors such as meter readers and linesmen);
  • Kolbe/Central Prison.

Prime Minister Dean Barrow committed publicly to ensuring payment of salaries for civil servants and teachers especially despite the heavy burden on the Budget and the utilities are considered essential for obvious reasons. The prison is managed privately but also gets a Government stipend.

Business process outsourcing (BPO)’s was initially affected but now employment in that sector is growing so this would not be a priority sector in any continuation of the Program, according to the report.

Municipalities, other local government agencies and statutory bodies, except for the BTB, did not lay off staff in this first phase of the Program and several of those agencies are currently in discussion with staff regarding temporary wage cuts, the report said.

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