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Pakistan witnessed negative wage growth in 2015-16: ILO

Updated November 18, 2018

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A Pakistani labourer makes clay dishes at a factory in Karachi on April 30, 2017. — AFP/File
A Pakistani labourer makes clay dishes at a factory in Karachi on April 30, 2017. — AFP/File
A home-based worker from Mithi displays arts and crafts materials that a cluster of women create and supply to dealers in various parts of the country.—Photo by Sumaira Jajja
A home-based worker from Mithi displays arts and crafts materials that a cluster of women create and supply to dealers in various parts of the country.—Photo by Sumaira Jajja

ISLAMABAD: The Inter­na­tional Labour Organisa­tion (ILO) has warned that Asia-Pacific still faces structural weaknesses in its labour markets despite two decades of economic growth.

In its ‘Asia-Pacific Employ­ment’ and ‘Social Outlook 2018’, released on Friday, ILO pointed out that although the regional unemployment rate is projected to remain 4.1 per cent through 2020, the vulnerable employment rate is expect to creep up towards 49pc, reversing a downward trend of at least two decades.

The region’s future prospects will require that economic growth go hand in hand with a further expansion of decent work, it says.

While real wage growth surpassed labour productivity growth between 2010 and 2016 in almost all countries, the increase in wages of employees looked especially strong in China, Thailand and Vietnam. However, negative wage growth was witnessed in Pakis­tan in 2015-16 at minus 4.7pc.

In Pakistan’s education sector, 6.6pc of the total female employment in 2016 was well behind the 72.9pc share in agriculture and 12.7pc in manufacturing.

Pakistan stands out with 15.3pc of women working from their homes, and 37pc working on the land (in agriculture) in 2017.

Structural transformation has been strongly felt in the region, with employment moving from agriculture mainly into services and only to some extent into industry. Most of the loss in agriculture was taken up by the increase in employment in the services sector, where 740 million jobs have been gained since 2000.

Manufacturing jobs dec­rea­sed slightly from the peak in the mid-2000s, with more job losses accruing to women than men.

The report says while the Asia-Pacific region has made rapid progress to substantially reduce extreme poverty, one fourth of all workers in the region — 446m workers — still lived in moderate or extreme poverty in 2017 and nearly half of the workforce — 930m people — were still making a living in vulnerable employment as own-account or unpaid contributing family workers.

With 1.9bn workers — 1.2bn men and 700m women, the Asia-Pacific region represented 60pc of the global workforce in 2017.

Asia and the Pacific has the most people working, relative to the working-age population. Employment-to-population ratio stands at 59.7pc, compared with 58.6pc at the global level.

Large numbers of workers in the region, especially those in low-paid jobs, work more than 48 hours per week.

The average hours worked in Southern Asia and Eastern Asia in 2017 were the world’s highest, at 46.4 and 46.3 hours per week, respectively.

In Eastern Asia, almost one in five workers worked in excess of 60 hours per week. The regional unemployment rate at 4.1pc is the world’s lowest and well below the global rate of 5.5pc in 2017. But while the global unemployment rate has held steady since 2015, the rate in the Asia-Pacific region has increased slightly by 0.1 percentage point.

In total there were 80.9m unemployed persons in Asia and the Pacific in 2018.

At 10.4pc, unemployment rate among youth remained unchanged from 2015, while the global rate increased to 12.6pc. Thirty five per cent of the region’s unemployed were youth (aged 15—24), although youth made up only 20pc of the working-age population.

In general terms, the labour market gains evident in the Asia-Pacific region in the past few years remain present but fragile.

Decent work deficits persist in all countries in the region and continue to weigh heavily on development trajectories.

Over the coming years, economic growth is expected to remain strong in the region, with growth rates of 5.6pc expected for 2018 and 2019, compared with 3.9pc at the global level.

Yet, there are lingering fragilities in the foundations of growth in the region that have the potential to offset the positive forecasts.

Recent threats of increased trade protectionism are already having an impact on investment in the manufacturing sector, which many workers in the region continue to rely on for their livelihoods and occasionally their first foray into paid employment. Demographic trends, and in particular the impact of ageing societies, are adding strain to the already-limited social protection systems and call into question the future labour productivity gains.

Published in Dawn, November 18th, 2018

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