EDITORIAL: The Labour Force Survey (LFS) published by the Pakistan Bureau of Statistics (PBS) carries data till 2018-19, and does not take into account the effects of the pandemic on the job market, but it does provide the government with a valuable insight into the direction that it must take. Unemployment rose from 5.8 percent in 2017-18 to 6.9 percent in 2018-19, quite a pronounced jump in just the first year of the PTI (Pakistan Tehreek-e-Insaf) government, but scratch just a little beneath the surface and you’ll see that the spike in rural unemployment was even larger, from 5 percent to 6.4 percent.
Now here’s a situation where the largest employer - agriculture absorbs 39.2 percent of the total workforce - also has the highest unemployment and, what is more, it is not governed by any laws, unlike industrial sector workers, which are protected by a good two dozen laws. Except the Land Tenancy Act in Punjab and the Hari Act in Sindh, there are no laws to look over rural workers; no defined minimum wage or rules to enforce it, no basic provision of working conditions, no social safety nets, and no worker welfare fund for the country’s majority labour force.
The second largest employer is the services sector, which makes for 37.8 percent of the workforce. Within it, a vast majority is the informal sector. There, too, no laws apply so the workforce has no security. The government, to its credit, is trying to drag much of the informal sector into the formal economy, but it is also learning that removing roadblocks on that way will take a lot of time. It is only when the informal sector will become formal that laws will be applied to it. But oftentimes the drivers of this sector, whose interests an unprotected, unregulated workforce suits just fine, are also the biggest hurdle.
These trends go some way in explaining just why a country with such a large population, a very big part of which is its youth, generates so little employment and income and hence is locked well below its production possibility frontier. There is, quite clearly, a deep structural defect at the heart of the economy’s production matrix. And not nearly enough has been done so far to address it, for which some people should be held accountable. All the problems presented by the informal sector aside, how much foresight and wisdom could it possibly take to understand that the rural sector - the biggest employer and all that - needs to be properly regulated? More importantly, for a government apparently so obsessed with reform, how much time could it possibly take to get this job done? Yet here we stand, going round in circles, wondering what to do with two-year-old statistics that only quantified a phenomenon that everybody was already aware of.
A peculiar thing about the largest part of the workforce is that it is also among the top voting populations; which can be a double-edged sword from the political point of view. If this bunch is taken care of, for which one needs only to enact and enforce laws already prevalent in much of the world, then they take good care of you at the election. But if they break their backs to give the country their food and get bare subsistence in return, in stark contrast to promises that fetched their votes, then they can also very quickly deliver the kiss of death.
There is a lot more at stake than mere votes and voters, of course. In unlocking worker potential could well lie the kiss of life that the economy so desperately needs right now. Therefore, it suits the time to undertake reforms that will at least cover the rural workforce. Hopefully, this matter will not remain tangled in official files any longer.
Copyright Business Recorder, 2021
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