LAHORE: The International Labor Organization has not painted a rosy picture of employment around the world for 2024. It dims prospects for Pakistan already reeling with a high unemployed workforce because of recession and political chaos.
The ILO report states that the ongoing geopolitical tensions as well as persistent and broadening inflation triggered frequent and aggressive moves by central banks. Monetary authorities in advanced and emerging economies implemented the fastest increase in interest rates since the 1980s, with significant global repercussions.
Though most central banks are now gradually easing their monetary policy stance as inflation is going down, the State Bank of Pakistan is constrained to keep its high policy rate as the inflation in the country continues to range much above the policy rate.
The report further states that highly indebted developing countries are particularly at risk of quickly running into financial distress as global financial conditions tighten, with significant repercussions for jobs, working conditions and wage growth.
Pakistan without doubt is a highly indebted country and is already in severe financial distress.
The ILO pointed out that after a short growth spurt as countries recovered from the pandemic, aggregate labor productivity growth quickly returned to the low pace observed over the previous decade. During periods of slow productivity growth, real disposable income and real wages are often vulnerable to sudden price shocks. In Pakistan’s case the productivity did briefly go up during the pandemic as the then government opened the economy during the peak pandemic period. But that slight increase was short lived and productivity returned back to pre-pandemic lows because of various factors.
The resultant persistent recession has not only stagnated new investment, eliminating chances of job creation but the operating industries and other enterprises were also forced to prune jobs as demand declined appreciably in both domestic and foreign markets. Because of inflation, rupee devaluation and huge increase in utility rates the real disposable income of the middle class and the poor declined appreciably. This forced many households to lower living standards. Some were relegated into poverty. Because of large scale unemployment the jobless pool has enlarged.
Too many workers are running after few jobs. The wages have almost frozen while the price shocks are no more sudden but regular. Globally though the jobs gap saw improvements in 2023, still the number of unemployed remains high at 435 million. According to statisca.com the unemployment rate in Pakistan is forecast to 8.00 percent in 2024.
The statistics from World Bank and other creditable agencies reveal that the unemployment rate in Pakistan was 5.8 percent in 2018 and it gradually peaked to 8.5 percent in 2023. Surprisingly the employment rate in Pakistan was 50.99 percent in 2018. It reached a peak of 53.73 percent in 2021 before declining to 52.12 percent in 2023. The employment rate in Pakistan is forecasted to 52.27 percent in 2024.
One of the primary challenges in the socioeconomic indicators domain across Pakistan is addressing income inequality. The concentration of wealth among a small portion of the population widens the wealth gap. Moreover, access to quality education and employment opportunities plays a crucial role in socioeconomic advancement. Ensuring equitable access to education, skill development programs, and job opportunities is essential for reducing disparities in the country.
