Another unbelievable labour force survey

The Federal Bureau of Statistics released the Pakistan Labour Force Survey 2011, which has declared the official rate of unemployment in Pakistan as being six per cent. While independent analysts are dismissing this assessment as being grossly inaccurate, it is still instructive to take a closer look at what the government data reveals, and what its implications are, before identifying issues which have evoked doubt about the reliability of the survey results.

Government figures indicate the unemployment rate rose to six per cent in July 2011, compared to 5.6 per cent a year ago. Out of a total workforce of 57.3 million, the total number of unemployed only rose by 280,000 people during the past year. The Labour Force Survey in fact documents a general decline in employment across urban areas of the country, as the unemployment rate has risen to 8.8 per cent, from 7.2 per cent last year. Given that the energy crisis has crippled most businesses across cities and towns of the nation, this finding is hardly surprising. What is surprising, however, is that the only province where a relative fall in unemployment is documented by the survey is Khyber-Pakhtunkhwa. This is difficult to understand given that Khyber-Pakhtunkhwa is not only plagued by energy shortages like the rest of the nation, but it also happens to be the worst affected by the ongoing violence and terrorism which is widely acknowledged to be depressing our national economic growth.

Conversely, overall unemployment in rural areas according to official figures has declined from 4.8 per cent to 4.7 per cent. The agriculture sector continues to be the largest employer, with 45.1 per cent of the workforce working on farms and with livestock, three-quarters of whom are women. In absolute terms, the number of unemployed women is thus said to have decreased to 1.18 million from 1.21 million. It is being argued that this positive outcome is a reflection of strong growth in agricultural commodity prices and consistent government support for several crops such as wheat. One would, however, not be hard-pressed to find a plethora of agricultural economists to dispute these claims.

It is not hard either to find expert rejections of the methodological approach and categorisations used by the labour force survey. About 34 per cent of the national labour force is described as people who either own their own business or work as independent contractors or day labourers with no fixed employer. One would be hard-pressed to describe a majority of these people working in the informal sector as being gainfully employed, given the number of days these people work, not to speak about the miserable conditions in which they have to work, or the inadequate remuneration they receive. Another 27 per cent or so employed people are described by the current labour force survey as being “aligned with family businesses”, which includes for instance family members of poor indebted haris or brick kiln workers, not receiving any direct compensation for their work.

It is time for the government to begin taking adequate measures to address the dismal state of working conditions in the country by enabling more effective labour inspections in both the formal and informal sectors, and to curb common infringements against worker rights, including the widespread practice of child labour.

Politically motivated handout schemes like the Benazir Income Support Programme or the Yellow Cabs scheme launched recently in Punjab will not do much to arrest actual unemployment, nor improve working conditions of the hard-working labour force in our country.

Published in The Express Tribune, August 4^th, 2011.