EDITORIAL: One of the most ignored contributors to the unemployment rate – which stands at 6.3 percent, according to the Economic Survey 2023-24 – is the very high birth rate of the country.
With the latter continuing to grow at a very fast pace in what is the fifth-highest populated country in the world even as the economy slows to a crawl, joblessness is bound to rise. Therefore, part of the effort to create more jobs must also focus on slowing down the birth rate.
The current rate of population growth drags down employment in two ways. One is very direct, with a lot more people entering the job market every year than it can handle.
And two, indirectly. Because the high birth rate also means that most children cannot be cared for adequately; hence the equally alarming rates of children born stunted and malnourished.
That puts them at a disadvantage right at the beginning of their lives as compromised mental and physical growth limits their gains from education – if they are lucky enough to have one – and ultimately pushes them to the margins of an already very cramped job market.
The latest employment statistics come from the Labour Force Survey (LFS) 2020-21, because PBS (Pakistan Bureau of Statistics) was busy with the 7th Population and Housing Census in 2022-23 – work is reportedly under way on LFS 2024-25 – and show that while some trends have changed, others have not.
“Technological transformation”, for example, has shifted the bulk of employment from agriculture (37.4 percent) to industry and services.
The services sector alone is now the largest growing sector of the economy, with 37.2 percent labour force participation.
Other than that, the same disturbing trends remain. Unemployment is highest in the youngest group (ages 15-24) at 11.1 percent, and second highest in the second youngest group (ages 25-34) at 7.3 percent, and in both cases much higher in females than males.
This is exactly how a youth bulge turns from a demographic dividend to a demographic disaster.
Pakistan is also one of the world’s youngest countries, so to speak, meaning a vast majority of its population comprises the youth. And instead of being an asset it has become a liability because it is an extra drag on the very economy it is supposed to provide extra momentum to.
These employment statistics, bad enough as they are, would become much worse if PBS surveyed under-employment as well.
It’s no secret that the financial collapse of the last few years, and the accompanying spike in unemployment, has reduced much of the middle class to working multiple odd jobs to make ends meet, while it has decimated lower income classes. So, unemployment alone does not depict the true, complete picture.
The nature of this year’s budget and requirements of the IMF programme make it pretty clear that the economy will remain caught in a low-growth band for the next few years; at least till strict structural adjustment is required to unlock the many tranches of the bailout loan.
That alone ought to make authorities think very seriously about the future and do what they can to relieve unnecessary pressure on the labour market. It is imperative to get the birth rate under control, an aspect of policymaking that does not get nearly enough attention at the top.
Copyright Business Recorder, 2024
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