EDITORIAL: Among the many glaring challenges that the budget document has thrown up, the enduring burden of unemployment — particularly youth unemployment — stands out as a critical concern, reflecting both a sluggish job market and inadequate policy response to the needs of a growing workforce.
As reported by the Economic Survey 2024-25, the unemployment rate stands at 6.3 percent, with the situation especially troubling for youth aged 15-24, among whom joblessness reaches 11.1 percent. This cohort represents nearly 45 percent of all jobseekers, underscoring the scale of the challenge.
The crisis is deepened by stark gender disparities — 14.4 percent of young women are unemployed compared to 10 percent of young men — as well as a persistent mismatch between the skills imparted through education and those demanded by the labour market, leaving many young people unprepared for available opportunities.
However, far from mounting a focused and determined effort to address unemployment and underemployment, the issue continues to be met with persistent neglect by policymakers. In fact, the scale of the neglect can be judged by the fact that even before meaningful solutions can be crafted, the government has failed in as basic a task as providing an accurate picture of the problem as the unemployment figures cited in the Economic Survey rely on outdated figures from the 2020-21 Labour Force Survey.
As reported in this newspaper, the reason given for the failure to calculate more up-to-date figures was the delay caused by the Pakistan Bureau of Statistics undertaking the 7th Population and Housing Census. That exercise, however, concluded two years ago, and one would have expected that a challenge as fundamental to Pakistan’s economic future as unemployment would have commanded greater urgency by our economic managers.
The delay in addressing the data gap underscores a broader inertia in policy thinking around how to confront the unemployment crisis. The least the government could have done for the upcoming fiscal year was to come up with a comprehensive plan aimed at bridging the country’s substantial skills deficit. This could have encompassed meaningfully incentivising the establishment of polytechnic institutes and vocational training centres across the country.
Moreover, there could have also been a focus on encouraging the corporate sector to take an active role in developing structured apprenticeship and training programmes that equip young individuals with market-relevant skills through hands-on, on-the-job experience.
It is vital to understand that without serious investments in technical education and adult vocational training, any attempt to address unemployment in Pakistan will remain superficial. Polytechnic institutes, in particular, have the potential to play a critical role in preparing a workforce aligned with the evolving demands of industry by offering practical alternatives to traditional academic tracks and opening viable employment pathways for millions of young Pakistanis who are currently being left behind by the system.
Properly developed, vocational training and polytechnic institutes can prove to be transformative by offering youth a path to economic empowerment and meaningful inclusion in the workforce, while simultaneously boosting industrial competitiveness and productivity.
Beyond skills development, any strategy to tackle unemployment must also target the SME sector, which is inherently labour-intensive and largely informal. Here, the priority must be to incentivise its shift to the formal economy, unlocking its access to banking finance, which could prove crucial both for the growth of these businesses and their capacity to create jobs.
Simultaneously, investments in labour-intensive sectors such as agriculture, construction and manufacturing are essential to absorb a growing workforce, while encouraging digital entrepreneurship could also serve as a key driver of job creation, particularly among the youth.
Ultimately, equipping the workforce with skill sets and education that reflect market demand coupled with fostering an environment conducive to private sector-led job creation will be vital for addressing the country’s significant employment gaps.
Copyright Business Recorder, 2025
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