Case Study on Unemployment in Pakistan Essay Example

been rendered unemployed.

Educated young men like white collar jobs. They do not like to perform manual labor. The higher age of retirement in government services has blocked the employment of educated young men. Reemployment of civil and military high ranking offices in government corporations and agencies deprives the qualified men from employment. The unemployment rate is a sensitive indicator of conditions in labour market unemployment is often associated with improving wages and working conditions as well as employers compete to attract retain workers.

When the unemployment rate is low, jobs are secure and relatively easier to find. Low employed “A person is employed if he or she worked full time or part time (even for a few hours) during the past week or is on vacation or sick leave from a regular job. Out of labor force: A person is to be out of the labor force if he or she did not work in the past 4 week. In other person neither employed nor un employed are out of the labor force. Labor force: Labor force consists of employed and unemployed person.

A person is employ if he is able to work and looking for work.The term “ able to work and looking for work” means who is able to work and is making effort to get work on pay and profit or trying to establish a business or enter into a profession or a waiting results of any of the following efforts. Writing applications for job to different institute suited to him. ?Working with out pay in order to get experience and training. Applying for job on different advertisement persons looking for work may be

of two types:

• Previous experience
• New job seekers

Causes of Unemployment in Pakistan

There are a number of causes of unemployment in Pakistan. The most important of these causes is a non stop increasing population. Deteriorating law and order situation has slowed down the tempo of economic activity.

Karachi is the biggest industrial base of our country. But investors are reluctant to invest there because of continuous unrest and violence. Our educational system is also responsible for the high unemployment rate among the educated youth. The attitude of our youth towards the choice of a career is also unrealistic and unproductive.They want to get only some white-collar job. Rapid mechanization and Computer technologies are also causing unemployment.

Unnecessary and frequent strikes in factories have compelled the owners to go for automation and such technology as requires less manpower. Lack of infrastructure facilities, especially in the field of energy, telecommunication and transportation also prevent the industrialist from setting up new industries. Large scale smuggling which has flooded the market with cheaper goods poses a serious threat to the development of local industry. Tight bureaucratic control on the economy, inadequate credit facilities and complex tax system are also some important factors that are creating hurdles in the way of private sector investment in industrial The causes of unemployment in Pakistan are:

1. Lack of enough industries to employ ever increasing number of graduate in the country.
2. The government is not involving in capital expenditure which creates job

Main problem of unemployment in Pakistan is that whenever a new technology comes as Software or hardware then all the people starts studying about that.Then at the end, you will see ten thousand students of a

particular field against 5 or 10 job vacancies.

Other reason is that in Pakistan, things are not handled in appropriate manner. Vacancies are less, but job seekers are more than that. Opportunities are not enough, and system of reference is so much indulged in our society that if a company need some employees then workers of that company will provide some resume to them of their relatives and friends so in this way many people don’t get the opportunity to apply for those jobs. I know system of reference is every where in the world, but not to that extend as in our society. But as these days software companies are growing and some new companies are starting their business very rapidly so I hope ratio of unemployment will become low soon.

Review of Literature

Pakistan at the moment houses the largest number of youth in its history.

According to census 1998, youth under the age of 29 constitute 70% of the total population. As much as 64. 87% young population recites in rural areas and 35. 13% in urban area.The censes of 1998 counted 56 million children under the age of 15. there were another 13 million adolescents between the age of 15 and 19, and 11 million youth age between 20-24 years.

it is a great tragedy that the vast amount of youth energies has never been put to proper use. It is clear in Pakistan:

1. Youth unemployment is high and rising
2. Youth are more unemployed then adults
3. Youth women face poorer employment prospectus
4. The majority of new jobs are low paid and of poor quality
5. The cost of youth unemployment are high

It is also clear:

1. The cost
   

of youth in unemployment are high

Poverty Rate in Pakistan

Pakistan poverty rate continuous to rise.

Unemployment in Pakistan has been aggravated due to constraints on public expenditures in recent years. Rising unemployment not only creates economic problems, but also has social consequences for society as a whole. A major contributing factor to growing impoverishment is Pakistan’s population growth rate of 2. 6% per annum that will lead, according to one estimate to a doubling population by 2020.

Pakistan’s Image in Recent Years

In recent years Pakistan image in international community has been damaged to the rise of violent extremist and fundamentalist elements in the society. The elements have been involved in kidnapping and killing foreign national in the country, resulting in the deteriorating image of Pakistan worldwide. This has aggravated the decline of foreign investment in Pakistan.

Improvement in Pakistan's Relation

In recent years there has been improvement in Pakistan relations with international financial institutions due to sound economic policy pursue by the military regime.Pakistan successfully completed a stand by agreement with the IMF in 2001(i. e, the first ever, fully completed agreement between the IMF and Pakistan since 1988), with the poverty reduction and growth facility project in process and scheduled for completion at the end of 2004.

The IMF and The World Bank have shown satisfaction with Pakistan’s economics performance in recent years.

Views of Quiad-e-Azam

Quaid-e-Azam’s dream of exploiting the immense natural resources of the country for the best possible benefit of the people did not come true By Syed M. Aslam Jul 05 - 11, 1999The founder of Pakistan, Muhammad Ali Jinnah, had dreamt of exploiting the immense natural resources of the country

for the best possible benefit of the people. Accordingly, he eulogized the people to "work, work and work" to make Pakistan a prosperous state where Muslims of the sub-continent would have better religious, economic and financial freedom unlike the limitations imposed on them by the Hindus in the undivided India.

After over fifty years, today, the dream of Quaid-e-Azam still remains to be materialized as the successive governments failed to exploit the natural and human resources wisely.Arguably, the economy is in such a worsening state which the country never experienced before. It is obvious from the fact that the biggest portion of the budget today goes towards the payments of foreign debts. Little is left for education, health and development. This has taken a serious toll on the employment opportunities in the country where finding a job at all levels is becoming harder by each passing day due to frequent lay-offs in the public sector in particular and private sector in general.

Few Chances of Employment

There are many seekers but few jobs.

In a society where ‘who you know’ has replaced ‘what you know’ as the major criteria for jobs, chances of employment are bleak due to massive downsizing in the public sector. Tens of thousands of graduates leaving the universities every year are finding it harder to find a suitable employment. Not only it is hard to find a job but the high level of unemployment has also hurt those already employed in a distinct way. With the abundance of workers the employers have leverage to hire and fire at will, play loose with the benefits and offer lower salaries and those who are not satisfied with

the working conditions are always welcome to leave.

Of course, there are thousands who are willing to fill the space at whatever the salary may be.

Impact of Unemployment on Society

Unemployment undermines the economic and social stability of any society. Societies which fail to provide gainful and secure employment to their people invite political instability, social unrest and economic insecurity. The link between unemployment and crime has also been well established.

Employment is also directly related to all industrial and trade activities. These activities slow down when there is a high level of unemployment but increases when it is low. In an inter-dependent world the unemployment issue has taken a global perspective. This is evident from the following example: The average annual rate of growth in global exports was 6. 6 percent during 1965-80.

It declined to 4. 1 per cent between 1980-91. While the developed world enjoyed the biggest share of the global exports, the slow-down not only affected it but also the developing countries, as declining industrial activities in the former decreased the prices of primary commodities in the latter.In addition, many of the developed countries became more protectionist raising new protective barriers against imports, particularly the competitive products, from the developing countries to further worsen an already bad situation. The situation has worsened with the eroding of trade borders and supersonic speed of communications and transfer of money today.

Increase in Crime

The socio-economic fall out of the high unemployment rate in Pakistan is evident from the drastic increase in the crime wave. Today robberies, dacoities and kidnapping for ransom have become a fearsome fixture of life in the country.The resultant lack of civil peace and the rule

of the law undermine the very basis of all industrial, economic and trade activities in the country. The case for sustainable development for employment can hardly be argued more forcefully. According to “UN” report: Economic policy plays a vital role to help keep the unemployment rate under check. According to a UN report, the East Asian economies in the 1980s avoided stagnation and unemployment did so because they got their domestic policies right by prudent borrowing, creative use of foreign exchange rates, promotion of exports, and protection of food growers and restraint of nominal wages.

All these measures have combined to keep the growth of employment in step with overall economic growth. Can we learn a thing or two from this? The theme of The First United Nations Decade for the Eradication of Poverty (1997-2006) was "Eradicating poverty is an ethical, social, political and economic imperative of humankind. " UN Secretary General Kofi Annan delivering his message on the International Day for the Eradication of Poverty observed on October 17, 1997 that "some individuals today are enjoying wealth on a scale previously unimagined.Yet victims of poverty still endure intolerable forms of deprivation. They continue to be marginalized and excluded. " He also said that though overall, the relative incidence of poverty declined, yet the number of world’s poor has risen considerably as almost one quarter of world’s population still lives in a state of poverty.

For instance, he added, the number of people with incomes less than $ 1 a day increased by almost 100 million between 1987 and 1993 and 1. 3 million people, one-third of world population, live with an earning of less than $

1 a day.

Uneven Distribution of Income

The over emphasis on the maximization of the GDP has also led to uneven distribution of income in Pakistan. The data on income distribution, based on Household Income and Expenditure Surveys conducted by the Federal Bureau of Statistics during 1963 to 1994, shows at least four distinct phases of inequality at the ratios of the highest 20 percent and the lowest 20 percent income groups.

The first phase between 1963-71 shows that inequality in income distribution narrowed the ratio of highest to lowest 20 percent income group decreased from 7. 1 percent in 1963-64 to 4. 9 percent in 1970-71.The second phase, from 1971-79 widened the income inequality from 5. 4 percent to 6. 1 percent.

Once again, the ratio declined in the third phase, 1984-87 from 6. 2 percent to 5. 5 percent. In the fourth phase, 1987-93, the inequality in income distribution worsened as the ratio sharply rose by 2.3 percent to 7. 8 percent. The inequality between the household income shares of the lowest 20 percent and highest twenty percent is obvious from the data collected by the Federal Bureau of Statistics from 1979 to 1993. In 1979, the lowest 20 percent enjoyed a share of 8 percent of the total income while that of the highest 20 percent was 41. 3 percent. By 1992-93 the share of the highest 20 percent increased by 7. 6 percent to 48.9 percent while that of the lowest 20 percent decreased by 2. 2 percent to 6. 1 percent. The middle 60 percent share also declined from 47. 6 percent to 45.6 percent during the same period. But the statistics also tend

to give the false impression about the share of family income due to very basic flaw in the criteria for measurement of the labor force which includes all those over ten years seeking work during the year. The sharp decline in the household income shares of the lowest and the middle income groups can be attributed to unemployment and under-employment.

Objective of Study

According to the topic of our survey research, “causes of unemployment in society” the basic purpose of the survey that what are the basic causes of unemployment among the people of the society. To attain our objective we define the main reason of unemployment in society as follows:

1. Extreme growth of population
2. Quota system
3. Lack of resources’
4. Red ribbons
5. Education system
6. Non-coordination between education and job opportunity
7. Non investment of land lord in technical field

Methodology

In designing the questionnaire, we have considered the following points. All the questions are formed in such a manner that they are relevant to the objectives and purpose of study. All the questions are so easy that the investigator and respondent can understand them. The questionnaire is designed in English language.

Our questionnaire consists of 16 questions:

• PROCEDURE ADOPTED: The following was the method of the study
• TARGET POPULATION:Target population means the population about which we wish to draw inferences. Target population related to our survey research consists of all the individuals living in Islamabad and Rawalpindi and persons who are capable of any professional job and unemployed including all the status classes.
• SAMPLE POPULATION A sample population is that from which a sample is chosen. Sampled population related to our survey research consists of all people, who are capable of
  

any professional/technical education and unemployed of the following randomly selected areas. Dheri Hassanabad and DHA IISAMPLE SIZE: Sample of size 75 selected and then equally disturbed for two areas.

Findings

Following are the findings of the study:

1. Conducted survey shows that 37% of post graduate are unemployed in Pakistan.
2. 53. 33% people are those who applied 1-3 times and then they get job
3. Result shows that 68% people are those who done 1-2 times jobs.
4. When asked that do their jobs match with their qualification 63% replied in negative.
5. 69% people told that they are satisfied with their pay.
6. 41. 34% respondents are those who applied for job more then 6 times. So we may conclude that people are ambitious.
7. 46.7 % people quit jobs due to personal reasons in which the main reason
   

is that the pay was nit enough for them.

Conclusion

One of the primary aims of any government should be the elimination of unemployment.Although achieving zero level unemployment is not only ‘highly impossible’ but also undesirable at various levels to check the inflationary trend. It is imperative that all governmental policies need to be directed towards achieving this goal. Identifying the problem is the first step towards successfully solving it.

However, a look at officially compiled statistics shows that unemployment level in Pakistan is much higher than that portrayed by the government. This is primarily due to the criteria used for the measurements of labor force, employment and unemployment.Population census and periodic Labor Force Surveys are the major sources of data

on labor supply, employment and unemployment in Pakistan. In addition, agricultural census also provides information on employment in the agriculture sector, the biggest employer of labor force, over 44 per cent or 15. 98 million people in 1999. Many changes have been made to define the meaning of labor force and employment in Pakistan— The Population Census of 1951 defined the labor force as all persons of 12 years and above was self-supporting, partially self-supporting or seeking work.In 1961, its definition was changed to include all those of ten years and above who were working for profit or wages or helping their family members. Not only the change lowered the age but it also included the unpaid family members in the employed.

Today, Labor Surveys define employment as "all persons of ten years of age and above who worked at least one hour during the reference period [the year] and were either ‘paid employees’ or ‘self employed. " Based on this definition, the total number of employed labor force in 1999 is estimated at 36. 2 million.The basis for the measurement of Labor Force and Employment; all persons of ten years of age and above in the first case and a minimum work of just one hour during the year in the second, tempts to under-estimate the level of unemployment in the country. For instance, based on a population of 134. 5 million today and a participation rate of 28. 7 per cent, the total labor force in Pakistan comes to 38. 6 million of which 36. 2 million were employed. This also shows that only 2. 4 million persons were unemployed in the country which

reflected an affordable unemployment rate of 6. per cent. In fact, unemployment is a much more serious problem than the official statistics show.

This also poses another relevant and worrying question. If the unemployment rate of 6. 1 per cent is correct, the employment rate is an ideal 93. 9 per cent. Those who know Pakistan, and there are many, find this highly unpalatable. Unemployment in Pakistan today is prevalent at all levels.

It does not spare the highly qualified professionals any more be they doctors, engineers and MBAs. It hurts the illiterates, non-skilled, skilled, and educated and professionals alike.However, it hurts the first two disadvantaged classes more than the others. While the weekend editions of major national dailies appear to be full of ‘help-wanted’ advertisements they only tend to give a wrong picture of the unemployment situation. Firstly, the majority of jobs advertised are aimed at the highly qualified professionals whose share in the total employment is just 3. 6 per cent.

There are little or no vacancies advertised for the two biggest occupational groups— skilled agricultural and fishery workers whose share is 36. per cent and the elementary or unskilled workers whose share is 22. 9 per cent. In a country like Pakistan, where less than 1. 4 per cent of the children, enrolled in primary school, manage to reach universities and professional colleges, the increased demand for professionals in the job market could hardly make any difference for the majority which drops out at all levels of the academic progress.

SUGGESTIONS: Following recommendations and suggestions in order to reduce the unemployment in society:

1. Birth rate of country must be kept with in the reasonable limits.
2. Education
   

must be constructive and beneficial, so that the government should open different institutes for technical and professional educational.

References

1. Bernanke, Ben (1998). “Basic principals of Macro Economics” Macgraw Hill, New York.
2. D. S. Hansel, Principal of Macro Economics-1, Macgraw Hill, New York.
3. E.W. Peaterson, (1980) . “Education and Development strategy in south and East Asia” Honolulu: 780pp.
4. Frank, Robert.(2001), “Workers, wages and Unemployment in the Modern Economy” in Principals of Micro Economics. John Wiley and Sons, New York, 57-58.
5. Pakistan/ Netherlands project on human resource (situation report and statistical year report 2003). by ministry of manpower and over seas Pakistan government of Pakistan.
6. Pakistan/ Netherlands project on human resource (crisis management in employment planning) prepared by Dr. B . Herman and Karim Tejani.