Think tank sees understatement of labour force

LAHORE: The Institute of Policy Reforms (IPR), an independent think tank, raised a question over the official labour force figures, saying there might be a possible understatement of its actual size. 

The IPR, in a report, said the Pakistan Bureau of Statistics (PBS) said only 1.3 million workers entered labour market between 2012-13 and 2014-15.

“Historically, the annual number used to be 1.5 million workers,” the report said. “Therefore, given the conditions in the labour market, almost 1.7 million potential workers have either opted not to join the labour force or there has been a major understatement of the labour force size by PBS.”

The IPR’s fact sheet said a total of 1.4 million jobs were created between 2012-13 and 2014-15. Accordingly, the decrease in the number of unemployed workers was 100,000. The number of unemployed workers was 3.6 million by the end of 2014-15. 

“However, if the number of discouraged workers is included and the normal increase in labour force allowed for, the total number of unemployed rises to 5.3 million,” it said.

“If an appropriate adjustment is made, the unemployment rate rises to 8.5 percent in 2014-15. This is the highest rate of unemployment in the last 13 years.” 

The report said the rate among literate workers is more than twice the illiterate workers. 

After 2012-13, the unemployment rate was improved the most in Khyber Pakhtunkhwa. However, employment growth has been the fastest in Punjab, it added.

According to the fact sheet, almost two-thirds of the new jobs created during the last two years were in the manufacturing sector. Only one-third of the additional jobs are in the services sectors, which largely fall in the informal economy. 

“The prospect of finding ‘decent work’ is much higher in the formal sector. Currently, about 27 percent of the workers are engaged in the formal sector,” it said.

The think tank expressed concern over the number of ‘idle’ males aged between 15 to 29 years.

These individuals are neither undergoing education nor searching for a job. There are more than one million such ‘idle’ young males in the country.

“Both positive and negative developments were observed in the labour market of Pakistan,” it said. “For a sustainable unemployment-reducing situation, the GDP growth rate will have to rise to more than six percent. Simultaneously, the state and the private sector will both have to invest more in improving the skill endowment of the labour force.”