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Review of unemployment rate in Pakistan

The Government of Pakistan officials recorded in their report that not only population size but its characteristics also play a vital role in the development of country. Thus, with regards to the rising population in terms of age also in size, the capability of country for offering social protection, health care, education and other basic services such as housing, sanitation, water, food, becomes an issue. Our country is the fifth most populous country globally. According to the National Institute of Population Studies the estimated population of Pakistan in 2019 is 211.17 million. Hence, population density stands at 265 per km square. Dissimilar sources record that unemployment creates socially and ethically wrong activities in a society. It is the root of all criminal activities like street crime, mobile snatching, target killing and prostitution.

However, the rate of unemployment has grown to a dangerous stage in Pakistan. According to a report, the rate of unemployment in 2018 was at 4.8 percent which has reached at approximately 4.45 percent at the start of 2020. According to a survey, 5.8 million people are jobless in the country who can eventually indulge in the list of addictives, gamblers and street criminals; the list of the jobless people is probable to raise up in 2021 which is alarming.

Prime Minister Imran Khan recently urged that the Government of Pakistan was doing all to promote tourism and generate career opportunities for youth in the country, which was bestowed with abundant natural resources counting sea, high mountains, salt ranges and historical sites. According to the Labour Force Survey 2017-18 the total labour force was 65.5 million in Pakistan, while unemployment rate is 5.8 percent. According to the survey, the highest unemployment (11.56%) is among the age of 20-24 years, indicating youth unemployment.

Initial ILO (International Labor Organization) estimates show an increase in worldwide unemployment between 5.3 million and 24.7 million. Likewise, an initial assessment by the World Trade and Tourism Council forecasts a fall to 25 percent in 2020, which would put millions of jobs at risk. In the current scenario of worldwide economic disruption, the possibility of laying off Pakistani workers through foreign employers can’t be overruled. According to the Bureau of Labor Statistics, the US unemployment rate was 3.8 percent before the COVID-19 pandemic (February 2020). By May 2020, the unemployment rate may have been as high as 16 percent. By September 2020, the unemployment rate declined to 7.9 percent. By the end of 2021 or early 2022, expert predict that the worldwide economy to revert to its pre-pandemic level of output. However, this picture masks an uneven pattern. At one end of the spectrum is the Chinese economy, which is already bigger compared to its pre-pandemic size. On the other end are mostly advanced economies which are either service-based (UK, France, Spain) or more focused on exporting capital goods (Germany, Japan) and are unlikely to recover to their pre-crisis levels by the end of the year. In these economies, growing but lower levels of output is projected to lead to push up unemployment rates. In its December 2020 economic outlook, the Organisation for Economic Co-operation and Development (OECD) projects an unemployment rate of almost 7 percent in its member states compared to pre-pandemic levels of around 5.5 percent. Most of the jobs affected are probable to be those at the bottom end of the earnings distribution which is likely to exacerbate income inequalities.

Experts also therefore expect governments’ focus to gradually shift from fighting the COVID-19 virus to dealing with higher unemployment rates by upskilling their workforce and creating jobs in newly emerging labour-intensive sectors. No doubt, Pakistan is experiencing the phenomenon of unemployed educated people, mainly jobless graduates. The unemployment rate among degree-holders is almost 3 times higher than the other overall unemployed people. The reason given for this is a mismatch between the education being imparted and the need of the economy to sufficiently absorb fresh graduates. Unluckily Pakistan’s economy has badly suffered with the outbreak of Covid-19. This adverse economic impact of the pandemic has translated by various channels, counting fall of local demand, decline in business activities, fall in import and export and reduction in production because of supply chain disruption. One of the very obvious effects is a decline in employment, mainly among people belonging to the vulnerable employment group. The avenues of manpower have suffered. The pandemic has rapidly extended from the health crisis to economic and labour market crises. The annual plan, according to government claims, focuses on creating gainful employment opportunities under the broader framework of the government plans for economic growth and reforms and suggests Covid-19 responsive measures to protect workers and their jobs in Pakistan. It is being requested to the Government of Pakistan that they should create career opportunities for the people of Pakistan to decline unemployment rate.

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