Where are the jobs?

LAHORE: The rising cost of living in Pakistan now forces people to let go of the concept of a single-income household. A family cannot afford to have one breadwinner, and both husband and wife should work. But the problem currently is that there is an acute shortage of jobs in the country.

The state needs to formulate policies for job creation in sectors like manufacturing, services, and agriculture. Unfortunately, the manufacturing sector in Pakistan is shrinking. Small and medium industries have been impacted by historic inflation and high interest and power rates. Many small industrial units have closed down having failed to bear high input costs.

Though almost all large industries are still operating, they hardly employ 30 per cent of the country’s manufacturing workforce. Around 70 per cent of employment is provided by SMEs, which are declining in number because of which manufacturing jobs are fast disappearing.

The service sector accounts for over 53 per cent of our GDP. While there has been an uptick in the number of jobs in this sector, most of them are low-paid sales jobs in food and e-commerce deliveries and telecommunications and IT repair. At the same time, many carpenters, masons, plumbers, and electricians have seen a decline in their engagements in the market because of declining construction and repair activities.

There is surplus labour in the agriculture sector that still accounts for over 40 per cent of employment in the country. This is further divided into two categories, mostly: lowly paid jobs and self-employed small farmers. Over 80 percent of farmers’ families earn below the subsistence level. The migration of the spare workforce to industrial centres has also halted as there are no jobs in cities. The country needs to start programmes that can create non-farm jobs in rural areas. Rural poverty could be adequately addressed if planners chalk out a strategy to establish agro-based industries. Urban poverty will go down if the construction industry is boosted.

There is confusion in Pakistan regarding what job creation means. If one ignores the technicalities, any new job created should have an effective impact on the living standards of a family and offer the minimum wage prescribed by the state. The statistical data will be misleading if jobs where total earnings are much lower than the minimum wage are included in employment statistics.

Unemployment here measures only one aspect of the problem: lack of work. Following this, the standard unemployment rate in Pakistan is around 6.6 per cent. Less obvious factors, such as partial lack of work, low employment income, underutilization of skills, or low productivity, are not accounted for in unemployment statistics. If these aspects are factored in (which in fact are a reality), the unemployment rate would be many times higher.