Female participation in workforce makes sense – at all levels
Would not only provide cheaper labour but also benefit households, improve living standard of poor strata
There is strong empirical evidence that employment of female workers in industries that are reliant on cheaper labour and unskilled workers benefits producers as it lowers the costs of production. PHOTO: FILE
KARACHI:
The declining trend in export revenue is alarming. Despite the GSP Plus preferences awarded by the EU to Pakistan, exports to Europe have failed to achieve the desired level of growth.
The major contributing factor to this decline is the loss in competitiveness of exporters in Pakistan vis-à-vis the exporters in other countries along with rising electricity tariffs, higher gas prices, and increasing labour costs and taxes.
As Pakistan mainly exports products whose revenues are sensitive to changes in their price, the products become less appealing to the consumers in the foreign markets. Industries such as garment and apparel, textile as well as food and beverages rely upon sources of unskilled and cheap labour and consumers are sensitive to small changes in prices.
In order to develop strategies to counter the loss in competitiveness, we need to understand the factors that have allowed other countries to increase their exports.
The lack of “feminisation” of employment in Pakistan, particularly in industries that consist of mainly unskilled and cheap labour, is seldom discussed in major economic forums in Pakistan as a factor that affects the competitiveness of the exports.
The newly industrialised countries of South Korea, Taiwan and Malaysia took advantage of an increased participation of females in the workforce in their earlier stages of industrialisation.
According to the statistics borrowed from the World Development Indicators, compiled by the World Bank, the labour force participation of females in Pakistan in 2014 was approximately 25% compared to more than 50% globally and 58% in Bangladesh. The number of female workers in Pakistan was approximately 30% of the number of male workers compared to approximately 70% globally as well as in Bangladesh. This pattern is disconcerting as Pakistan mainly exports goods produced by unskilled workers that require minimal training in order to participate in the workforce.
It is reported that the garment industry in Bangladesh now employs more females than males. There is strong empirical evidence that employment of female workers in industries that are reliant on cheaper labour and unskilled workers benefits the producers as it lowers the costs of production.
It is estimated that the wages paid to the female workers range between 50 and 70% of the wages paid to their male counterparts. Although female participation in the labour force is low across all segments of the society, this discussion focuses on the poorer strata. A large proportion of females in these strata are unpaid workers, who could benefit tremendously from formal employment.
Women in developing countries are often described as “source of competitive advantage” to producers in industries reliant on cheaper labour and unskilled workers.
For instance, females employed in apparel and garment manufacturing industries are not only paid lower wages than their male counterparts but are also more likely to work as subcontractors on piece-rate wage payments. This provides the employers with greater competitiveness in their markets relative to other producers who may not have adopted similar strategies.
In Bangladesh, there is a concerted effort to increase participation of female workers in the apparel and garment industry. The success of the efforts is apparent as Bangladeshi exporters have not only captured a large proportion of the global market in apparel and garment sector but have also introduced newer products that have generated considerable consumer appeal in their destination markets.
As females may be employed at lower wages relative to their male counterparts, it adds to the savings of the exporters, who subsequently reinvest to improve the product quality and further increase their sales.
Furthermore, greater labor force participation for females provide additional sources of family income that is likely to benefit their households since women tend to be more prudent in their expenditures and are more likely to spend a larger proportion of the income on the needs of the households relative to their male counterparts.
As future employment opportunities improve, we may observe higher female enrollment rates in schools and universities, which will provide numerous social and economic benefits. Improvement in national competitiveness will likely reduce gender inequalities that currently plague the social and economic environments in Pakistan.
It is imperative that Pakistani policymakers promote employment of female workers, particularly in industries that rely on unskilled workers. The government may provide subsidies to employers that hire a certain proportion of female workers, which can be transferred to the workers. This may allow fair wages to be paid to female workers relative to their male counterparts and female employment may serve its purpose to reduce the costs of production.
Similarly, reduction in tariffs on the imports and exports of products that incorporate a greater proportion of female employment may be emphasised.
The government can also provide technical and vocational training to female workers so that female workers can avail better jobs when the opportunity arises.
The displacement of male workers may not be necessary to achieve greater participation of female workers. It is likely that tasks such as operation of machinery and equipment and tasks that require higher skill levels will be performed by males, while tasks that can be subcontracted or performed with lower levels of skills to be performed by females. Such has generally been the case in Bangladesh and during the earlier stages of industrial development in the newly industrialised East-Asian countries.
The government must address this issue and at the same time implement rules and regulations that reduce the disparity between males and females. The competitive advantage that can be generated may increase the exports, improve the living standards of the poorer segments of the society and may eventually lead to better working conditions in factories. Inclusive strategies that promote employment opportunities for females are necessary if Pakistan is to achieve higher levels of economic growth.
The writer is an Assistant Professor of Economics & Research Fellow at CBER, IBA
Published in The Express Tribune, April 4th, 2016.
The declining trend in export revenue is alarming. Despite the GSP Plus preferences awarded by the EU to Pakistan, exports to Europe have failed to achieve the desired level of growth.
The major contributing factor to this decline is the loss in competitiveness of exporters in Pakistan vis-à-vis the exporters in other countries along with rising electricity tariffs, higher gas prices, and increasing labour costs and taxes.
As Pakistan mainly exports products whose revenues are sensitive to changes in their price, the products become less appealing to the consumers in the foreign markets. Industries such as garment and apparel, textile as well as food and beverages rely upon sources of unskilled and cheap labour and consumers are sensitive to small changes in prices.
In order to develop strategies to counter the loss in competitiveness, we need to understand the factors that have allowed other countries to increase their exports.
The lack of “feminisation” of employment in Pakistan, particularly in industries that consist of mainly unskilled and cheap labour, is seldom discussed in major economic forums in Pakistan as a factor that affects the competitiveness of the exports.
The newly industrialised countries of South Korea, Taiwan and Malaysia took advantage of an increased participation of females in the workforce in their earlier stages of industrialisation.
According to the statistics borrowed from the World Development Indicators, compiled by the World Bank, the labour force participation of females in Pakistan in 2014 was approximately 25% compared to more than 50% globally and 58% in Bangladesh. The number of female workers in Pakistan was approximately 30% of the number of male workers compared to approximately 70% globally as well as in Bangladesh. This pattern is disconcerting as Pakistan mainly exports goods produced by unskilled workers that require minimal training in order to participate in the workforce.
It is reported that the garment industry in Bangladesh now employs more females than males. There is strong empirical evidence that employment of female workers in industries that are reliant on cheaper labour and unskilled workers benefits the producers as it lowers the costs of production.
It is estimated that the wages paid to the female workers range between 50 and 70% of the wages paid to their male counterparts. Although female participation in the labour force is low across all segments of the society, this discussion focuses on the poorer strata. A large proportion of females in these strata are unpaid workers, who could benefit tremendously from formal employment.
Women in developing countries are often described as “source of competitive advantage” to producers in industries reliant on cheaper labour and unskilled workers.
For instance, females employed in apparel and garment manufacturing industries are not only paid lower wages than their male counterparts but are also more likely to work as subcontractors on piece-rate wage payments. This provides the employers with greater competitiveness in their markets relative to other producers who may not have adopted similar strategies.
In Bangladesh, there is a concerted effort to increase participation of female workers in the apparel and garment industry. The success of the efforts is apparent as Bangladeshi exporters have not only captured a large proportion of the global market in apparel and garment sector but have also introduced newer products that have generated considerable consumer appeal in their destination markets.
As females may be employed at lower wages relative to their male counterparts, it adds to the savings of the exporters, who subsequently reinvest to improve the product quality and further increase their sales.
Furthermore, greater labor force participation for females provide additional sources of family income that is likely to benefit their households since women tend to be more prudent in their expenditures and are more likely to spend a larger proportion of the income on the needs of the households relative to their male counterparts.
As future employment opportunities improve, we may observe higher female enrollment rates in schools and universities, which will provide numerous social and economic benefits. Improvement in national competitiveness will likely reduce gender inequalities that currently plague the social and economic environments in Pakistan.
It is imperative that Pakistani policymakers promote employment of female workers, particularly in industries that rely on unskilled workers. The government may provide subsidies to employers that hire a certain proportion of female workers, which can be transferred to the workers. This may allow fair wages to be paid to female workers relative to their male counterparts and female employment may serve its purpose to reduce the costs of production.
Similarly, reduction in tariffs on the imports and exports of products that incorporate a greater proportion of female employment may be emphasised.
The government can also provide technical and vocational training to female workers so that female workers can avail better jobs when the opportunity arises.
The displacement of male workers may not be necessary to achieve greater participation of female workers. It is likely that tasks such as operation of machinery and equipment and tasks that require higher skill levels will be performed by males, while tasks that can be subcontracted or performed with lower levels of skills to be performed by females. Such has generally been the case in Bangladesh and during the earlier stages of industrial development in the newly industrialised East-Asian countries.
The government must address this issue and at the same time implement rules and regulations that reduce the disparity between males and females. The competitive advantage that can be generated may increase the exports, improve the living standards of the poorer segments of the society and may eventually lead to better working conditions in factories. Inclusive strategies that promote employment opportunities for females are necessary if Pakistan is to achieve higher levels of economic growth.
The writer is an Assistant Professor of Economics & Research Fellow at CBER, IBA
Published in The Express Tribune, April 4th, 2016.