Jobless growth in Pakistan: An Anomaly or Reality?
- Pakistan experiences jobless growth, where GDP increases fail to create proportional employment opportunities due to structural weaknesses, automation, and reliance on low-productivity sectors.
- Actors such as lack of industrialization, informal sector dominance, policy inconsistencies, and a rapidly growing labor force contribute to rising unemployment and underemployment.
- Pakistan must promote labor-intensive industries, enhance skill development, formalize the informal sector, and implement effective industrial and trade policies to bridge the employment gap.
Introduction
Economic growth is traditionally associated with job creation, as expanding economies demand a larger workforce. However, the phenomenon of “jobless growth” arises when economic growth fails to translate into substantial employment opportunities. In Pakistan, this paradox has sparked debates about whether it is an anomaly or a persistent reality. Underemployment and unemployment are still major problems in Pakistan, even during times of increasing GDP growth. This analysis delves into the causes, implications, and possible remedies for jobless growth in Pakistan.
Understanding jobless growth
Jobless growth refers to a situation where an economy grows but does not generate sufficient employment opportunities. This disconnect can occur due to various factors, such as automation, structural imbalances, and reliance on sectors that are not labour-intensive.
Is jobless growth a reality in Pakistan?
Recently, Pakistan has experienced episodes of economic growth without a proportional increase in job opportunities. The following factors highlight why jobless growth is a reality for Pakistan:
- Structural issues in the economy:
Pakistan’s economy is dominated by low production sectors, such as agriculture, which employ a significant portion of the population, but its contribution to the GDP is minimal. The manufacturing sector, which traditionally absorbs labour, has remained underdeveloped and is unable to provide large-scale employment.
2. Lack of industrial Policies
The absence of robust industrial policies and reliance on imports has hindered the growth of labour-intensive industries.
- The adverse impact of automation
Technological advancement in certain sectors, such as banking and telecommunications, has reduced the requirement of manpower.
- Population growth and youth bulge:
With an annual population growth rate of around 2%, the labour force is expanding faster than the economy’s capacity to absorb it.
- Informal sector dominance:
The majority of Pakistan’s workforce works in informal jobs, many of which are unstable and not officially recorded.
6-Policy and governance challenges:
Inconsistent economic policies, political instability, and a lack of focus on vocational training and skill development have exacerbated the unemployment crisis.
Implications of jobless growth
- Rising unemployment and poverty:
Failure in job creation leaves millions of individuals, particularly the youth, unemployed or underemployed, which is contributing to poverty and inequality.
- Brain Drain:
Talented professionals and skilled workers seek opportunities abroad, depriving the country of valuable human capital.
- Social unrest:
High unemployment rates, especially among youth, are fuelling frustration, resulting in rampant crime and political instability.
- Stagnant living standards:
Jobless growth prevents households from improving their socio-economic conditions, perpetuating cycles of poverty.
5-Economic inefficiency:
A mismatch between the skills of the labour force and the demands of the economy leads to less effective utilisation of human resources.
Way forward
1. Promotion of labour-intensive industries:
Encouraging the growth of industries such as textiles, automobiles, the IT sector, and agro-based manufacturing, as well as small and medium enterprises (SMEs), can create more jobs.
2-Revamping education and skill training:
Linking education with market demands and expanding vocational training programs can help align the labour force with new job opportunities.
3. Formalisation of the informal sector:
Bringing informal jobs into the formal economy can improve the job quality and provide the workers with social protections.
4. Improved industrial and trade policies:
Policy should focus on boosting exports, reducing import dependence, and encouraging domestic production to generate employment.
5-Youth Centre employment program:
Various programs, such as internships, apprenticeships, and entrepreneurship incentives, can empower young individuals to contribute to the economy.
- Strengthening a public-private sector partnership:
Collaboration between the government and private sectors may help in reducing unemployment through investment, infrastructure, technology, and other services.
- Targeted economic zones:
Establishing special economic zones (SEZs) focused on labour-intensive industries can help absorb a growing workforce.
Conclusion
Growth in Pakistan is not merely an anomaly but a pressing reality that reflects deep-rooted structural and policy challenges. While economic growth is essential, it must be inclusive, creating employment opportunities. By fostering industrialisation and aligning the education sector with market demands, Pakistan can address the issue of jobless growth. A proactive and comprehensive approach is essential to ensure that economic progress can be translated into a meaningful improvement in the employment and living standards for all.
The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of The Spine Times.
Sahibzada Sultan Mohammad Bahoo
The author has a keen interest in politics and philosophy.
