The Financial Express

Snapshots of the rural labour market

| Updated: October 24, 2017 11:08:06

Snapshots of the rural labour market
The conventional wisdom about the current situation of the rural labour market in Bangladesh is that it is transforming to an extent. With diversification of the rural labour market, village economy too has changed substantially. The country's labour market is tightening and real wages of workers in rural areas are rising while poverty is declining fast, and if the rate continues, the country will soon get rid of extreme poverty
The best way to throw light on these issues is to undertake research using both macro and micro (i.e., household) level data, use relevant statistical tools and derive conclusions based on such data and results. 
However, when required up-to-date data are not available and some data are not even collected, it may not be entirely inappropriate to use what one might call field observations or "casual empiricism". This write-up is primarily based on some such notes from a field visit undertaken in a village which is about 75 km away from Dhaka, and not too far away from a major road and a market.
There has indeed been a transformation of life in that village, especially if the picture today is compared with that of about a couple of decades ago. The road serving the village is of good quality and suitable for travelling by a car. 
Cycle rickshaws have been replaced by auto-rickshaws. Many houses are brick-built, giving the impression of an urban area. Of course, the picture changes as one goes a little further from the road towards the heart of the village where the typical village scene of decades ago remains. 
A group discussion with a few young persons revealed interesting types of new work in the "new economy". Take the case of Saiful (this and other names used below are not the real names) who couldn't pass his B.A. examination and was not successful in getting any job. 
He is now a shareholder in a family fish farm and also works as its "manager". Likewise, Monir is engaged in facilitating the collection and depositing of loan instalments from debtors of a major commercial bank. 
The borrowers come to the local branch of a commercial bank where he collects the money and arranges its transfer to the bank in Dhaka which does not have a branch in that market. Monir does it as a part-time job because he is enrolled as a student in a local college. 
Not all are, however, lucky like Saiful and Monir. Saiful had access to his family's property that included ponds. Monir was able to use local "connections" to get the bank work. What do others do? As Monir himself mentioned, many spend a year or even two looking for jobs and then start to look for jobs abroad which itself is not an easy process. If one succeeds in getting one, it may be an unskilled worker's job and may even get involved with manual work (where his education is not of much use). 
One of the young persons mentioned that another reason for the difficulty in getting jobs was women candidates getting priority over men. Indeed, one not only notices groups of girls going to schools, but also women teachers in schools. 
It seems that unless employment grows at higher rates than at present, increase in women's participation in the labour market will simply mean substitution of male with female workers and contribute to unemployment of the educated. 
Raising female participation in the labour market as a policy goal needs to be pursued alongside the goal of raising the growth of employment as a whole. 
A common perception is that educated youths are not interested in physical labour needed for crop production. This may not be universal as is illustrated by the case of Latif. 
After completing HSC, he tried for jobs without any luck. Eventually he returned to his father's occupation and now works with him on land that he takes lease from others. 
Owners of land who depend on hired labour are increasingly resorting to contract labour for peak season operations (like land preparation and harvesting). But workers are still hired on a daily basis for other operations like weeding and daily rates still hover around Tk 350 per day (with of course two meals in addition). Compared to the last year, wages have not increased, indicating that real wages are probably plateauing out. Is it difficult to get labourers? 
It was informed that every morning one would find a good number of workers waiting for work at the Shantipur bazaar. 
"Molla fish farm" has half a dozen ponds where fish of different variety are grown. The farm has an arrangement with a group of fishermen who come at 3 a. m. in the morning, catch fish, and buy them on the spot for marketing at the nearby Shantipur bazaar. The whole operation takes about three hours.  
A  group of 11 fishermen is paid Tk 2000 for catching fish, i.e., Tk 182 per person. The daily catch is allocated equally amongst those 11 men who sell the fish at the nearby market. The difference between the price at which they buy from the farm and the price at which the fish is sold represents their profit/income. 
Based on the quantity of fish they got, the price at which they buy and the expected sale price at the market, it was found that the average daily earnings from this operation would be in the order of Tk 250. 
The daily earnings per person thus works out to be Tk 432. If they can get this job for 20 days a month, and earnings per day remain the same (which would depend crucially on the daily catch), the monthly earnings per person would be Tk 8,640. More days and/or more catch per day can yield higher incomes. 
Yet it is assumed that an income of more than Tk 10,000 per month would be unlikely. That, in turn, would be just around the poverty line income. Even if they are above the poverty line, they would be very close to that. 
There was thick fog and the temperature was 20 degrees Celsius when the work was being done, and some were standing in waist-deep water for hours. Do they have any savings that would enable them to tide over the period without earnings?
There is no doubt that life as a whole and the labour market in particular in the village concerned has undergone significant transformation. The new economy has opened up new job opportunities. And yet, it remains difficult, especially for the educated, to get jobs. 
Desperation of  young men to migrate for jobs is thus understandable. For many of those who stay back and have to work as wage labourers, the situation remains precarious and many suffer from vulnerability. 
The writer, an economist, is former Special Adviser, Employment Sector, ILO, Geneva. 

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