EDITORIAL: Released after a significant gap of four years by the Pakistan Bureau of Statistics (PBS), the latest Labour Force Survey (LFS) published on November 25 offers an unsettling portrait of the country’s economic trajectory. Far from easing, unemployment remains a critical pressure point that has continued to worsen over time, underscoring an economy increasingly unable to create durable and dignified work.
The unemployment rate has reached a 21-year peak of 7.1 percent, and the scale of joblessness is even more disturbing when viewed in absolute terms: the number of unemployed Pakistanis has jumped by 31 percent — around 1.4 million people — since 2020-21, the last time the LFS was conducted, rising from 4.5 million to 5.9 million in 2024-25.
Moreover, the rise in unemployment spans across gender, age group and both rural and urban populations, revealing a labour market under strain across every demographic and region. Youth joblessness remains particularly acute, with the unemployment rate for 15-29-year-olds climbing to 11.5 percent from the 10.3 percent recorded in 2020-21. During the same period, men’s unemployment edged up from 5.5 to 5.9 percent, while women’s rose more sharply from 8.9 to 9.7 percent.
Meanwhile, rural unemployment has moved from 5.8 to 6.3 percent, and in cities the rate has increased from 7.3 to eight percent. This across-the-board rise in unemployment has simultaneously been accompanied by an increase in labour force participation, with 47.7 percent of those aged 10 and above — around 85.6 million people — working or seeking work, marking a yearly influx of roughly 3.5 million new entrants into the labour force since 2021.
The emerging picture points to a deep-rooted skills and education gap lying at the heart of the problem, where an increasingly youthful labour force lacks the capabilities demanded by the job market, leaving it ill-prepared for available opportunities. The economy has further been weakened by stagnant FDI, declining domestic investment and the steady exodus of multinational companies from Pakistan, further constraining employment prospects.
However, instead of crafting effective strategies to take on this crisis, policymakers regularly demonstrate an inability to even accurately diagnose its root causes. The fact that Planning Minister Ahsan Iqbal has attributed rising unemployment to an unforgiving IMF programme and climate-induced disasters underscores a glaring abdication of responsibility, deflecting attention from the ruling elite’s own policy failures and chronic mismanagement of the economy.
The reality is that capital gravitates towards safety and stability. The rulers must ask themselves: have they worked towards creating an economic, political and security environment conducive for businesses and job creators to flourish? Or, have their policies contributed to increased volatility on multiple fronts, resulting in meaningful investment and employment generation remaining stifled? Also, given that one of the core issues remains a substantial skills gap, is there any appropriate strategy on the cards to address this area? It must be noted that Business Recorder has repeatedly called for an increased focus on polytechnic education and vocational training across the country, as this can help equip young Pakistanis with industry-ready skills, providing practical career pathways for those the regular education system currently overlooks.
It is equally important to strengthen the SME sector, which is labour intensive in nature and can generate employment at scale, and to revitalise rural areas, where boosting job opportunities can reduce the flow of workers to overcrowded cities and ease urban unemployment pressures.
Above all, there is a need to structurally reform a system plagued by elite capture, and that is where successive governments have routinely faltered as that essentially entails belling the cat by challenging entrenched interests. Until this fundamental barrier is addressed, efforts to reduce unemployment will remain piecemeal, leaving millions of young Pakistanis trapped in a cycle of limited opportunity.
Copyright Business Recorder, 2025
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