Jobless growth impacting SDGs

Over the past decade, Bangladesh showed praiseworthy growth momentum in the economy. Bangladesh was able to display over 6.0 per cent growth rate continuously. Policy reforms as well as demand-driven decisions have worked as the gear regarding the backdrop of the positive growth trend. Working people in an economy is considered one of the key elements in growth momentum.

There should be a correlation between the economic growth rate and the employment situation. In the case of Bangladesh, the economic growth scenario is not harmonized with the employment rate. Despite the falling unemployment rate, growth as expected is not visible. Unemployment is considered to be a key measure of the health of the economy.

The impact of unemployment on the economy is many. Due to unemployment, tax revenue earning goes down, consumers demand decreases, the government has to expand more for social welfare, an increase in social problems, and taxation burden on employed people. Besides, the economy faces a high range of inequality and poverty rates resulting in falling living standards. Ultimately, expected output in the economy is not possible if the unemployment rate increases.

The world economy experienced stagnant growth in presence of the coronavirus epidemic. Bangladesh was also hit hard by the deadly Covid-19. During the virus time, the wheel of the economy in Bangladesh remained unmoved resulting in a rising unemployment rate. The Center for Policy Dialogue (CPD) and the Citizen’s Platform for SDGs, Bangladesh carried out a comprehensive study during the lockdown forced by the coronavirus. The study revealed that a significant portion of the people lost their jobs. State-owned BBS in its survey showed that the unemployment rate rose to 22.39 per cent in July 2020. According to the Bangladesh Institute of Development Studies (BIDS) around 13 per cent of people lost their jobs due to the pandemic.

According to the Labour Force Survey 2022 revealed by the Bureau of Bangladesh Statistics (BBS), the unemployment rate came down to 3.6 per cent from the previous 4.2 per cent. With a currently 73.40 million labour force, Bangladesh’s economy is performing. It is important to mention here that out of the total labour force, there are 47.40 million men and 25.90 million women. Currently, around 2.63 million people have no jobs- BBS sources said. After the 2016-17 fiscal year, the unemployment rate in Bangladesh has been calculated by BBS for 2021-22 fiscal year. In line with the definition given by the International Labour Organization (ILO), unemployed means those who do not get a chance to work even for an hour a week.

According to BBS, the unemployment rate in Bangladesh was recorded 4.5 per cent and 4.3 per cent in 2010 and 2013 respectively. The rate in recent times has come down to 3.6 per cent indicating that the state has achieved the capacity of employing people in job of any kind. On the contrary, the youth unemployment rate in Bangladesh is now significant. The International Labour Organization (ILO) in its study revealed that the youth unemployment rate now stands at 10.6 per cent. If the youth are not brought into jobs, there is little possibility of achieving economic goals set by the government. ILO country office director, Tuomo Poutiainen said that skilled youth is the key to Bangladesh’s future. Fresh graduates in Bangladesh look for quality jobs. But, it is being seen that most graduates seek abroad jobs finding no quality jobs in Bangladesh. BIDS study in 2017 said that unemployment among graduates is 66 per cent.

The issue concerning job creation has become one of the burning issues for the economy. Since working-age people are increasing to a great extent, the state has to create jobs for them. It should be noted that unemployment is a curse for an economy. According to the World Bank study, the 170,000 working-age population will be increased every month and 1.1 million additional jobs is required every year. The Labour Force Survey (LFS)

2016-17 said that the labour force increased in Bangladesh from 56.7 million in 2010 to 63.5 million in 2017. The increase is 6.8 million in seven years. So, it can be said that the number of employed people increased by an average of 0.96 million every year. On the contrary, the average Gross Domestic Product (GDP) in Bangladesh grew annually by 6.6 per cent. In such a situation, job growth is below 1.0 per cent which is alarming for the times to come. The state has to be ready in employing a growing working-age population currently seen. The working-age population in 1950 was 17.9 million. The number in 2010 rose to 83.5 million. According to a study, its number is expected to rise 137 million in 20140.

Over the past five years, jobs in agriculture dropped by 1.1 per cent against output growth of 3.2 per cent, output growth in industry by 9.8 per cent against job growth by only 0.5 per cent, and output growth in service sectors by 6.0 per cent against 4.0 per cent job growth. The manufacturing jobs declined by 0.77 per cent despite strong output growth of 10.4 per cent from 2013 to 2016- 2017.

Based on available information regarding the unemployment rate, employment rate and growth rate stated earlier in this article, the economy is on an imbalanced track totally. There needs to be match between output growth and employment growth. If the economy shows jobless growth for a longer period, its consequences are supposed to be worse. In a jobless growth economy, there is the possibility of increasing inequality and poverty rate. Since the economy has so far set goals to become an upper-middle-country as well as trillion dollar economy, jobless growth might become a bottleneck in achieving the goals. Because of the eighth five-year plan, the policymakers have to chalk out programs regarding employment creation. Bangladesh is likely to fail to achieve some sustainable development goals if the unemployment problem and jobless growth remain unaddressed. In SDGs, no poverty, zero hunger, reduced inequalities, decent work and economic growth are highly connected with employment issues. The policymakers must think about reducing jobs in the informal sector which accounts for 85 per cent.

The writer is an economic affairs analyst. He can be reached at mazadul1985@gmail.com