Joblessness: Public policy failure & faulty education system

Muhammad Mahmood | Published: September 08, 2018 21:16:03 | Updated: September 11, 2018 21:06:00

Despite Bangladesh's very impressive economic growth rate averaging around 6.0 per cent over the last 20 years, there are 2.6 million unemployed in the country, according to the Bangladesh Bureau of Statistic (BBS). The number of unemployed is likely to grow as an estimated two million job seekers are entering the labour market each year. According to the International Labour Organisation (ILO) and the World Bank (WB), 41 per cent of young in Bangladesh do not work, do not study and do not train. The situation is even worse for females. More alarming is the graduate unemployment which now stands at 47 per cent, the highest in the South Asian region. Some economists in the country even suggest that Bangladesh (like many other countries) is experiencing a jobless economic growth.  In a jobless growth economy, unemployment continues to remain high even when the economy grows. This clearly indicates that jobs are not growing as fast as the economy is growing.

The reality is when population is growing at a rate of 1.1 per cent in Bangladesh, one needs to hit record levels all the time to keep up with whether it is creating new jobs or spending on infrastructure or very rudimentary social services along with education and health care. It is a reminder that the government is talking up growth at 7.2 per cent this year and similar growth trajectory for  the years ahead and the consequent trickle-down effect or even the country graduating to become a developing country, are often much less impressive than they sound.

According to the BBS, Bangladesh has an economically active population of 62.1 million in a country of 167 million and that economically active population is largely dominated by the male population accounting for 69.4 per cent. But the country has 59.5 million employed population of which 70.2 per cent are males. There are 2.6 million people unemployed in the country who are exactly equally divided between males and females (50:50).  This is a clear indication that females in the country are  largely bearing the brunt of unemployment. The picture from the gender equality point of view is  rather very dismal given that the country has been lauded for achieving significant achievements in empowering women.

Only 37 per cent of the total population are in the workforce in the country and of which 96 per cent  are employed.  But the participation rate is 57.1 per cent and that figure averaged 56.9 between 1990 and 2017. Even accounting for people in the age groups of 0-14 plus 65+ who constitute 37 per cent of population, a  significant  number of people (26 per cent) appear to be missing  from the workforce than expected under the normal circumstances ( can be described as the missing working age population). We do not have any statistical information on them why they are out of the workforce, but we can  with reasonable accuracy  assume that bulk of these missing working age people are women on the basis of the female participation rate. Another less developed country in South Asia and also a very close neighbouring country, Nepal has a participation rate of 84.2 per cent (2017) and slowly rising. But the most important feature of the Bangladesh labour market is the difference in male and female participation rates. The female participation rate remains far below than that of the male participation rate at 33.5 per cent  relative to 81.7 per cent for males. About 7.6 million Bangladeshis are working overseas countries at present; hypothetically, if they are taken into account, the unemployment outcome would have been very dire indeed.

But more importantly, the actual number of Bangladeshis out of work (not counting discouraged workers who opted out of the labour market, thus not considered as part of the economically active population) has risen from 2.1 million in 2006 to 2.6 million in 2016. Over just one decade the number of unemployed has risen by half a million. It is rather very strange that hardly any attention is given to this figure. This number has not only slipped down the political agenda but also in public discourse including the media. This figure also hides a number of important facets of being unemployed, such as the duration of unemployment including long-term unemployment. It appears that there are no data compiled by the BBS on the duration of unemployment. The unemployment figure is not just a statistical figure; there are significant human costs associated with being unemployed. And that is the reason that makes unemployment much more than just an economic issue.

The unemployment rate in Bangladesh is estimated to be at 4.1 per cent  but 40 per cent are underemployed and many only work a few hours a week and also many are employed in what is described as ''vulnerable jobs''. Vulnerable employment is generally described as people working on their own account and contributing family workers. This type of employment is characterised by very inadequate income and work under very difficult, even sometimes under very dangerous working conditions  e.g. Jhal Muri  (chilli hot puffed rice) sellers, knife sharpeners, building site workers carrying bricks over their head ( it remains a mystery to me why quite inexpensive and a simple instrument like a  wheel burrow is  not used for carrying bricks in building sites which would have reduced injuries in building sites quite significantly as well as contribute to increased productivity)  etc. Whatever jobs are created outside the agriculture sector are mostly in low wage jobs in the services sector. Manufacturing has increasingly been becoming capital-intensive requiring highly skilled labour force and fewer in number. Bangladesh like many other developing countries, including India, have transited to become a service-oriented economy from an agrarian economy without fully completing the manufacturing phase. There is no suggestion here that such a transition is not a desirable growth trajectory but there are implications for skill and knowledge accumulation.

 While the agriculture and the services sectors contribute 18 per cent  and 64 per cent to gross domestic product (GDP) respectively, 43 per cent of the employed workforce are  in the agriculture sector while 37 per cent in the services sector. These two sectors are well-known for irregular and variable working conditions and also the principal domain for providing most of the vulnerable jobs. A better understanding of the labour market conditions can be gleaned from an analysis if we take into account the proportion of employed people who are in formal employment and they account for only 14 per cent and enjoy the normal employment and remuneration benefits. Even in the formal sector, only state-owned enterprises (SoEs) mostly adhere to the legal guidelines on employment and remuneration conditions and private sector enterprises, except multinational corporations, mostly flout them.  Even then  in most instances legal minimum wages are far below the living wage (e.g. the minimum wage for ready-made garment or RMG workers is TK 5,300 but the living wage is estimated to be TK16,000).The remaining 86 per cent of the workforce  in the informal sector have no such benefits (e.g. domestic helps).

The bargaining power of workers is also very weak as the trade union movement is highly fragmented and the leadership is known to be corrupt. No wonder, only 4.0 per cent of workers are unionised. There are 52 organisations at present representing RMG workers in the country and that tells the story of the nature of trade union movement in Bangladesh.

Yet we have been observing that almost a quarter of million foreign workers are employed in Bangladesh; mostly in garments, information and communications technology (ICT) and other services industries due to the lack of skills availability in the country. This highlights the role of the education system and its failure to provide employable skills which will enable people to find jobs. Related to this issue is the quality of jobs. We need to be mindful of not only on the quantity of jobs but also at the same time the quality of jobs that are being created. Most of the jobs created, especially in the urban areas over the last three decades, have been low-end jobs or, more precisely, vulnerable jobs mostly concentrated in the construction sector resulting for a boom in housing as well as roads and highways construction across the country.

 In a much broader sense the lack of employment opportunities also indicates to public policy failure. In this context, there is a strong feeling that the education system is failing miserably in delivering even whatever it is designed to be, let alone to be keeping up with the demands of the rapidly changing times. There are grave concerns based on anecdotal evidence that a sizeable number of children are completing their primary education without achieving the minimum levels of literacy and numeracy skills. As these children make their  progression in life to the job market as adults, their employability will remain extremely limited. The education system in Bangladesh has awfully failed generations of school children by not enabling them to reach their full learning potential. We must bear in mind that a sound foundation of knowledge is the necessary  basis to fulfil the potential of  individuals and  the society. The education system needs a complete overhaul  to focus on creating desired skills that will fulfil both individual and societal needs; thereby contributing to economic activity productively. To address the problem of jobless growth also needs developing carefully crafted policy options and failure to do so has the potential of engulfing the country  into social and political turmoil.

Muhammad Mahmood is an independent economic and political analyst.


Share if you like