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5 years ago

Getting job and real wage data in time

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When the country is moving ahead with annual economic growth rate of over 7.0 per cent, all focus is on the size of the economy. A number of global estimates projected that Bangladesh would be the 24th or 26th largest economy by the next 10 to 12 years. In this process, the country is going to overtake rich countries like Austria, Ireland Denmark and Singapore and also developing nations like Pakistan, and South Africa. Again, some near-term projections mentioned that the country had already turned into the second or third fastest growing economy.

All these are good news and show the vibrancy of the economy. Policymakers also find these as successful outcomes of their policies and initiatives taken in the previous years. But higher growth or incremental size of the economy can't be a matter of satisfaction unless matched with jobs. This is a bitter fact and not acceptable to any government. Nevertheless, it has become a practice that governments in different countries claim credit for higher economic growth and lower unemployment. They generally also don't want to accept that things may worsen in their tenure than in the earlier regimes. Moreover, it is also easy to highlight the growth story by the numbers than by comprehensive anecdotes and other relevant indicators like employment situation.

Again, employment or job situation can not be adequately presented by statistics as these need the help of other data. Comprehensive and updated job statistics are, however, crucial to understand the impact of economic growth. Bangladesh is lagging in this regard.  The national statistical agency Bangladesh Bureau of Statistics (BBS) is yet to provide updated data on job situation. The latest available statistics is the Labour Force Survey (LFS) 2016-17 released more than a year ago by BBS.

More than three years ago, BBS decided to conduct labour force survey on three-month or quarterly basis and subsequently released the data. But the exercise faced some setback due to lack of coordinated effort. Moreover, surveys unveiled some uncomfortable reality of the country's job market which caused some irritation for the policymakers. As a result, BBS stopped releasing quarterly survey data on labour market. Instead, they released annual report putting estimates of four quarters together.

One year has passed since the release of LFS data for FY17 and the labour market situation report for FY18 is overdue.  But there is no indication from BBS to make the report available. This delay in releasing the annual LFS report makes it difficult to understand the country's labour market situation and also the real effect of 7-plus growth on employment situation.

According to LFS 2016-17, country's rate of unemployment stood at 4.8 per cent in FY17, unchanged from FY16. The rate was 4.6 per cent in 2010 and modestly declined to 4.3 per cent in 2013. Thus in the last seven years since 2010, unemployment situation improved little although the rate is quite low. During the eight-year period, annual average growth rate of Gross Domestic Product (GDP) was 6.45 per cent. It indicates that the good growth rate contributes little to reduce the unemployment rate.

If considered from job creation perspective, the picture may be clear which showed that some 6.70 million new jobs were created during the period under review. Thus 0.67 million jobs were created annually on average during 2010-2017. This is a dismal scenario especially when the economy has entered into higher trajectory of growth (see table). The Seventh Five-Year Plan (7FYP) projected that some 12.90 million new or additional jobs would be generated during the five years (FY16-FY20) of plan period. In reality, only 2.70 million jobs were created in the first two years (FY16 and FY17) of the plan period when GDP posted 7.11 per cent and 7.28 per cent respectively. It is thus also presumable that the economy is not going to generate some 10.20 million new jobs in last three years (FY18-FY20) even when it is going to post 8-plus growth rate annually in next two years. Growth rate was 7.86 per cent in FY18 and number of additional job created in the year is yet to be known.

It is not clear why BBS is not releasing the LFS report (this writer tried to contact senior BBS officials but didn't get any response).  Delay in unveiling the report makes research and analysis difficult. Related policymakers like the central bank are also in trouble to track the job situation.

Country's labour market situation is gloomy for several reasons. Low level of unemployment rate is not enough to overcome the other drawback like labour force participation rate (LFRP). LFPR in Bangladesh is now 58.20 per cent which is lower than the global average of 66.0 per cent. The rate is defined as a measure of the proportion of a country's working-age population that engages actively in the labour market, either by working or by looking for work. The rate is almost stagnant for a decade. In 2010, LFPR was the 59.3 per cent which came down to 57.1 per cent in 2013. In FY16, it improved modestly to 58.5 per cent but declined slightly to 58.2 per cent in FY17.

Low LFPR indicates that people who were willing to work may decide not to work anymore. It was not that already employed people are leaving jobs but mostly already unemployed people left the labour market. The whole thing is tricky and sometimes doesn't give the right picture.

Wage, especially real wage, is another critical thing to understand the job market. BBS has stopped releasing real wage index since FY09. The reason is also unknown. Thus one has to rely on proxy index to know the real income situation of the workers in different sectors. In such a situation, the onus is squarely on the BBS to release data for the consumption of all the stakeholders, including researchers and academics. 

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