Every passing day adds more jobless people to Pakistan, a country with one of the largest young labor forces in the world.
With a 6.3% unemployment rate among youth aged 15 to 35, millions are waiting for a miracle to change their economic conditions.
Irfan Ali
Imagine a day in the life of a hunter-gatherer who goes out in the morning and returns with food in the evening, compared to a 25-year-old jobless youth scrolling endlessly on his laptop screen in search of employment. Who do you think is better off economically?
Every passing day adds more jobless people to Pakistan, a country with one of the largest young labor forces in the world. With a 6.3% unemployment rate among youth aged 15 to 35, millions are waiting for a miracle to change their economic conditions.
Jobs are not only about economic progress but also a necessity for survival. In Pakistan, thousands of young graduates from different fields are desperately searching for the jobs they once dreamed of, but very few succeed in finding one. Unemployment has placed a heavy burden on Pakistan’s economy. Let’s explore the economics of unemployment, its causes, and possible solutions.
Every country has a basic factor of production—labor—which forms the backbone of the economy. These are the people who work for others in exchange for money. They may be bankers, teachers, security officers, or anyone who produces goods or services. However, not all people are counted as part of the labor force. For example, Pakistan’s population of about 255 million includes students, retired people, disabled persons, and prisoners, who are not part of the labor force. The labor force is divided into two groups: the employed (those working) and the unemployed (those above 15 years of age who are actively looking for a job but cannot find one).
Unemployment is usually divided into three types:
- Frictional unemployment: when people are temporarily unemployed because they left a job or refused one, they were offered.
- Structural unemployment: when people’s skills do not match the jobs available. For example, a person offered a computer-related job may not have the qualifications for it.
- Cyclical unemployment: the most painful type, which occurs during recessions, when companies cut staff due to falling profits, leaving many people unemployed through no fault of their own.
Another factor that worsens unemployment is sticky wages. This happens when wages do not keep up with inflation. Workers demand higher pay, but employers cannot always provide it. This cycle of rising wages and inflation creates problems and slows down economic growth.
In Pakistan, all three types of unemployment exist. In many rural areas of Sindh, for example, skilled and educated workers cannot find local jobs. They are sometimes offered jobs far away with very low salaries, making relocation difficult. In other cases, jobs are available, but the required skills or experience do not match, causing structural unemployment. For example, someone with a degree in economics may not qualify for a teaching job in the science category.
To tackle this growing problem, the people, government, and social organizations must work together. The government should improve the quality of education and ensure equal opportunities for both rich and poor. Reducing educational costs will make schooling affordable. It should also create more jobs by encouraging new businesses and institutions where people’s skills match the available work. Each job opening must be filled with transparency and merit. Additionally, small business opportunities should be promoted in villages so people can earn a livelihood in their own communities.
If these solutions are not adopted quickly, Pakistan may fall further behind in economic development, and another century could be wasted in the blink of an eye. Then there will be little difference between today’s unemployed youth and the hunter-gatherers of hundreds of years ago.
Read: Inflation, Unemployment, and Population Bomb
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Hailing from Sanghar, Irfan Ali did BS in Economics from University of Sindh, Jamshoro. He is former teacher of Bahria Foundation College Sanghar and OPF high school Sanghar campus. He writes article on different economics and social issues in Pakistan. He can be contacted at: laghariirfan37@gmail.com
