Recently, the Pakistan Institute of Development Economics (PIDE) painted a grim picture of the rising rate of unemployment across the country, underlining that 24 percent of educated people were jobless at the moment.
The PIDE informed its Senate Standing Committee on Planning and Development that the unemployment rate in the country had reached 16pc — contrary to the government’s claim of 6.5pc. Another important development underlined by the survey is the 40pc of educated women were also unemployed countrywide.
The term ‘educated’ here refers to those people who have acquired an undergraduate or graduate degree, which should enable them to find a job. These findings indicate how serious the educated unemployment issue is. It needs the attention of policymakers.
The Pakistan Tehreek-e-Insaf (PTI) promised in its election manifesto before July 2018 polls that it would provide 10 million jobs over a span of five years. Instead, its policies have resulted in massive layoffs nationwide. The ongoing structural reforms, aimed at fixing the faltering economy, have crippled almost every sector.
The economic slowdown has not only prevented employers from hiring fresh graduates and newcomers in the market, but has also forced many of them to lay off staff in order to adjust to the emerging tough working environment.
Parents have high expectations for their fresh-out-of-college kids. After all, the price of a private degree is crushingly high. If a reasonably good economic growth rate does not produce enough jobs, it is time to review economic policies to remedy the situation.
Pakistan is considered to be the fifth-largest young country in the world. Around 63 percent population of the country comprises youth aged between 15 and 33. A greater proportion of young people is considered to be a major economic driver for growth and progress. But unfortunately, it seems that the concerned authorities are unable to figure out the root cause of the problem.
The issue can possibly be on the demand side. With investment and business confidence declining in the country over the last few years, new opportunities for recent graduates are limited. Yet the supply of graduates significantly exceeds their demand. The issue is also on the supply side as a rising number of graduates are from humanities or social sciences while their demand in the job market is low.
Policymakers should try to address these problems by making universities divert their resources towards vocational or technical education, which is more in demand. Employers should also incentivise employees to work in different locations to better utilise their skills.
However, for the common citizen job alone is not the only problem. A higher economic growth fuels inflation and raises the cost of living which becomes more problematic since most people can’t make a comfortable living if their incomes do not rise commensurately; just to maintain the level of inflation-adjusted real wages from falling.
In Pakistan, the state is required to promote social and economic well-being of the people pursuant to its constitutional Principles of Policy. The state is mandated to “provide basic necessities of life … for all such citizens … as are permanently or temporarily unable to earn their livelihood on account of infirmity, sickness or unemployment”.
Pakistan does not have an employment policy in place to comply with this constitutional mandate. It should formulate an employment policy designed to promote full employment through job guarantee programmes and unemployment benefits through various compensation and insurance schemes.
