May 22, 2006	Monday	Rabi-us-Sani 23, 1427

THE risk is, the more educated you are, the more chances there are to be unemployed. It seems to be against the conventional wisdom. But it is true.

In an interesting paper on ‘Employment generation strategy’ presented at the consultation workshop on Poverty Reduction Strategy Paper II (PRSP), Dr Junaid Ahmad pointed out that unemployment has been rising among persons educated above matriculation but not possessing any degree, by 10.65 per cent between 2000-01 and 2005-06.

This is not all. In this period, unemployment among post-graduates has risen at the rate of 18.15 per cent. And in the last two years, unemployment rate in this category has accelerated to 24.52 per cent.

On the other hand, the good news according to the latest official Labour Force Survey is that overall unemployment rate has started shrinking. While every eighth (8.27 per cent) person of the labour force was unemployed in 2001-02, now only every seventh (6.8 per cent) person is unemployed. This means that at present 3.47 million persons of the total 51 million solid workforce have no jobs.

The reduction in unemployment rate seems plausible when these percentages are translated into real numbers. While size of the labour force in the last three years has increased by some 7.5 million, the number of employed persons has risen by 8.5 million, showing creation of additional one million jobs in three years.

But, if the survey data is looked at from the gender balance angle, it reflects the overall social bias. The rate of unemployment among women is as high as 10.3 per cent as against 5.9 per cent for men.

Looking at this data, two basic issues come to mind: First, how authentic is this data? Second, why the unemployment rate is higher for the educated people?

Let’s take the first issue of authenticity of the data. There is hardly any independent survey which can be used to compare with the official data. It cannot be denied that a higher growth rate in the last three years has created employment opportunities. However, open-ended challenge is how to sustain this trend?

The increased employment is supported by empirical evidence. Just take a few sectors. First, cement production has shot up from an average below 60 to over 80-90 per cent in the last three years. And the revival of the construction sector, indicated by the rising cement consumption, has stimulated production in 40 affiliated industries. It means creation of new jobs. The daily wages of unskilled construction workers and masons have almost doubled in the period. The trend is continuing with existing cement production capacity expected to rise by almost 50 per cent in the coming two years.

Second, automobile sector has shown robust growth which has given vendor industry a shot in the arm. According to a vendor’s association representative, over 20,000 jobs were created in the first two years of the industry’s take off. This does not include the jobs created by expansion in capacity by the automobile industry and the indirect employment in the related service market.

Third, the overall country’s exports have risen by over 50 per cent in this period. Much of this expansion in exports has come from rise in the share of value-added products, which couldn’t have been possible without employment of additional workforce.

Fourth, the telecommunication sector has shown phenomenal growth in the last three years. New jobs were created jobs to service now over 2.4 million customers.

And finally, the media has expanded to over 30 private channels and witnessed a mushroom growth of print media. More radio stations have also been opened. These new and old players are finding it hard to get the qualified people for their outfits.

They are just poaching on each other. The newcomers are changing jobs quickly as it is the sellers market. Creation of these channels has also given growth to a number of private production houses.

Now let’s move to the next question: Why unemployment growth rate is higher among the educated people? According to the Labour Force Survey quoted by Dr Junaid Ahmad, over 1.32 million persons having education above matriculation are unemployed. This indeed has serious issue and explains the urban social commotion. Unemployment is also leading to rise in crimes committed by the educated youth.

On the other hand, business outfits in the urban centres complain that they are finding it hard to get the right person for the available jobs. Much of the unemployment among educated people is caused by a serious gap in the type of qualification required by the market and what our education system is producing.

According to a study, not updated, more than 80 per cent students go for general humanities, while the demand for this qualification was only 14 per cent. The situation has not changed much since the study, which was done in the nineties by AERC. This shows serious communication gap between the employment market and the educational institutions.

Probably, there is no institution which has the capacity to monitor the job creation trends and forecast what type of workforce would be required in medium and long-term. The ministry of manpower has started to think about undertaking some research on the issue. The need is that students and their parents be provided career counselling at the ninth and tenth class level.

At the same time, there is lot of talk about setting up of technical institutions but with not much focus on this sector. Just take a few examples. Pakistan has a sizeable oil and gas sector and is situated in the region, which is living on these resources, but the country does not have any gas technical institute.

Next, the hospitality industry is growing at a much faster pace in this country and the region. The Gulf countries, it is estimated, would need thousands of trained persons for their fast growing hotel and restaurant sector, but we have no decent hospitality industry institute. What is needed to find jobs for the educated youth is to establish technical and other educational institutes with world-class quality, so that our youth is accepted around the world.

Another major factor for higher rate of unemployment among the educated is that our universities are churning out thousands of students every year for whom there is no demand and often the quality of education leaves much to be desired. Most of the students who come from quality educational institutions find jobs. The children from affluent classes, who can afford to go to expensive quality institutions, have no problem in getting the good jobs.

It’s a Catch 22 situation for the poor. They are poor they cannot afford to go to the good educational institutions and hence cannot get employment. While the government is moving ahead with the agenda of promoting quality higher education, the primary and secondary level education is completely neglected. There is focus on quantity at the primary level, but no emphasis on quality.

The market reality is that most educated job seekers fail in getting the position because their English, which is the official language in Pakistan, is horrible.

This negligence to quality education at school level would lead to further accentuating the inequalities in our society – if the poor have no access to quality school education, they cannot get to the quality higher education institutions, so they are destined to slog where they are.

The government should intervene to break this vicious cycle and reverse the rising inequality trend in our society. Dr A. R. Kemal’s says: “Whereas income inequality in 1996-97 had been low, income inequalities have been the maximum in the 1990s compared to any other time in the history of Pakistan.”

The poor 20 per cent lost their share while the richest 20 per cent gained in both rural and urban areas between 1987-88 and 2001-02. The erosion in the share of middle 60 per cent was substantial, resulting in the considerable gain in the share of richest 20 per cent” (in the national income).

The government has still to go a long way to find the jobs for over 3.7 million unemployed and then to attend to the bigger problem of high under-employment. What is to be done is known for ages, but how it would be done is the question? While the policy makers may allocate all the resources, the government’s implementing machinery is crumbling and lacks the capacity to deliver.