Structural transformations

Updated November 18, 2019

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The writer teaches politics and sociology at Lums.
The writer teaches politics and sociology at Lums.

EARLIER this year, the Pakistan Bureau of Statistics (PBS) published the 2018 edition of its semi-frequent Pakistan Employment Trends report. The report draws data from previous rounds of the Labour Force Survey (LFS), including the latest one which came out in 2017-18, and confirms a number of accelerating (and potentially worrying) transformations.

This piece is going to focus on three such transformations — the declining share of agricultural work in the labour force; the persistently large share of casual and informal work, especially in paid employment; and the working conditions confronting a large segment of workers.

The first trend is probably the most important, highlighting long-term structural change in the economy. While it is now as big a cliché to suggest that Pakistan is no longer an agrarian country (as it was once to suggest that it is), the shift over the last decade is worth highlighting. In 2007-08, approximately 42 per cent of the country’s labour force was engaged in activities defined as ‘agriculture’ by the Pakistan Standard Classification of Occupations. This amounted to approximately 22 million people out of a total labour force of 51m.

By 2017-18, the percentage employed in agricultural activities had fallen by 5pc to 37pc. While the absolute number of people employed in agriculture is still growing by about 1pc per year, largely on account of overall population growth (and higher fertility rates in rural areas), the trend away from agricultural activities is fully in place. Barring a major catastrophe, the trend is likely to hold, and it would be reasonable to assume that the coming decade may witness an absolute decline in the number of rural workers for the first time in the country’s history.

Even when the data is usable, its presentation and access pose a challenge for users here.

The second trend relates to where the former potential pool of rural workers is now heading to meet subsistence requirements. In an encouraging development, the trend of the past decade remained tilted in favour of industry, which saw labour force participation rise from 21pc to 24pc, while the services sector absorbed the remaining 2pc.

Substantively, this reflects a ‘modernisation’ of the economy, a fact borne out by another key statistic — the rise of paid employment during the same decade. Overall, the number of wage and salaried workers has risen by nearly 5pc to an all-time high of 43pc, which, in absolute terms, comes to just over 28m individuals.

A worrying trend underscoring this change, though, is that of the 28m or so that are now reliant on wage work to make ends meet, only 51pc of them have access to regular paid employment. This number, combined with the number of piece-work based workers, has declined by about 6pc over the last decade. What has increased, providing cause for consternation, is the figure of casual paid employees (or irregularly paid employees) whose share now stands at 33pc of all wage workers.

Alongside this casualisation of labour, the overall share of informal employment (in manufacturing and services) remains at 71pc of the total labour force. While more granular data will help us obtain a more comprehensive picture, one plausible conclusion that can be drawn is that new wage (and own-account) work located mostly in urban areas continues to be heavily informalised, outside of the remit of extant labour regulation and employment-based social protection.

Historically, such regulations and protections are downstream consequences of structural transformations in the labour force, which are accompanied by the increasing political power of the working class nested in labour unions and representative political organisations. Growing informalisation, however, undercuts that by creating isolated and disconnected working conditions, which remain exposed to all manner of shocks. Little surprise then that nearly 70pc of workers in retail-wholesale trade, one of the biggest sectors that absorbs low and semi-skilled workers, are categorised as vulnerable.

This facet leads us to the third point, concerning working conditions confronting individuals who are being absorbed by the ‘modernising’ economy. Informality, and the lack of requisite social protections that come along with it, have already been identified as persisting issues from the preceding decade.

Also of considerable concern is the issue of excessive hours worked, which the LFS defines as over 50 hours per week. Here too growing urban sectors like wholesale retail trade and transportation and storage reported one quarter and one-tenth of their total workforce engaging in excessive work respectively.

The government’s job creation agenda, launched as it was with much fanfare at the start of its term, needs to remain cognisant of these structural trends, and their worrying aspects that pose social development challenges. It needs to present a clearer picture of where new jobs are being created, who is taking them up, and what prospects do these jobs hold for long-term social mobility.

Doing so would also involve assessing the role of PBS and the quality of material that it puts out. Official statistics, and accompanying reports, are vital for judging government performance, doing academic research and informing policymaking. It is also true that all over the world they remain inundated with issues of data quality; however, this problem appears to be particularly acute in the case of Pakistan. Even when the underlying data may be usable, its presentation and access pose a considerable challenge for users.

The 2018 Employment Trends report suffers from a host of such issues, wracked as it is with poor editing and bizarre language. In one particularly egregious passage, a decade-long trend was described as “change down the time-lane is wavy”. The point here is not to shovel criticism onto personnel working in the PBS, but to highlight that capacity constraints, dictated by chronic underfunding of the institution, and recent changes in its governing structure, pose long-term issues for government accountability, research and policymaking in the country.

The writer teaches politics and sociology at Lums.

Twitter: @umairjav

Published in Dawn, November 18th, 2019