Realities beyond the unemployment numbers

Bangladesh can take pride in its unemployment figures, which stand lower than the USA, the UK, and neighbouring India. In September, the US Bureau of Labor Statistics reported a 3.8% unemployment rate, while the UK marked 4.2%, and India 7.1%. Bangladesh, in contrast, boasts an impressive 3.53% unemployment rate, nearly half that of India, marking a favourable position compared to many countries globally.

However, the recently released data from the final Labour Force Survey (LFS) of 2022 reveals a more complex reality.

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Bangladesh's working-age population, those aged 15 and above, totals 119.37 million, with 73.05 million actively in the labour force. Of this, 70.47 million are employed, leaving 2.58 million, or 3.53%, unemployed.

Yet, a broader perspective includes underemployment and potential labour force, which dramatically increases the percentage of the population facing job-related challenges. According to LFS 2022, 2.83 million individuals are underemployed, while over 1.35 million make up the potential labour force. Collectively, the data shows that 6.76 million people, or 9.6% of the total labour force, fall within the category of the underutilised labour force, with over 60% belonging to the 15-29 age group, a cohort eager for employment opportunities.

Further analysis reveals that the underutilised population is diverse in terms of education, with the highest share (12.8%) having completed tertiary-level education, followed by those with Higher Secondary (8.1%), Secondary (4.9%), and those with no formal education (3.6%).

The nature of underutilisation varies, with 41.8% engaged in work less than 40 hours a week, 38.2% counted as unemployed, and 20% categorised within the potential labour force.

Youths without jobs

Though unemployment is a global problem amid a slowing growth phenomenon,  it is more acute in economies with huge populations. The world's second biggest economy, which is also the most populated country in the world, China is also grappling with the soaring youth jobless rate which prompted the country's official statistical agency to suspend monthly unemployment data.

China's National Bureau of Statistics did not publish the youth unemployment rate in July after a spate of record-high readings for the past few months with the latest data showing one in every five youths (21.3%) was without a job.

It is bad news for a record 11.6 million college graduates entering the Chinese job market this year.

Although the official explained that they are reviewing the methodology whether or not youths still in college should be counted in the employment data, it failed to pacify a disillusioned generation who vented their frustration in social media debates.

Analysts viewed that the higher unemployment among Chinese youths, including graduates, is a reflection of China's sluggish post-Covid rebound, decline in consumer demand and crisis in real estate sector – all having knock-on impacts on corporates reducing their hiring capacity. Previous crackdown on private firms and tech sectors also threw many graduates out of job, worsening the situation further.

Now, China's job market is flooded with a surplus of highly educated individuals.

"Unemployment and underemployment/over-qualifications among graduates are the evil twins of the mismatch between the supply of the degrees and growth of graduate jobs," Liu Ye, a senior lecturer in international development at King's College London, told DW.

Complaints of being turned down by recruiters due to "high education" and "lack of work experience" are widely shared by graduates on Xiaohongshu, a Chinese equivalent of Instagram.

This resembles the fate of graduates in Bangladesh, whose prospects for jobs look bleak due to scant job openings in corporates, banks and other private sector entities that employ most of them. Graduates interviewed by The Business Standard complained about their ordeals to get a job and receive a monthly pay less than even the tuition fee they paid every month.

India's unemployment rate climbed to the highest in more than two years in October as joblessness in rural areas increased, according to a private research firm, as reported by Bloomberg.

The overall rate rose to 10.05% last month, the highest since May 2021, despite India's economic activity has been relatively strong, with manufacturing and consumption expanding.

The unemployment rate in the United States remained steady at 3.8% in August and September, amid a surge of unemployed re-entrants looking for a job, data from the U.S. Bureau of Labor Statistics, with payroll gains attracting more jobs in hospitality-leisure and education-health care sectors.

Youths are better employed in developed economies. The OECD youth unemployment rate (workers aged 15- 24) increased by 0.5 percentage point compared to its lowest rate recorded in April 2023, mainly driven by a rise in the youth unemployment rate for men.

Meanwhile, in August 2023, unemployment rate remained at its record low in the OECD (4.8%), the European Union (5.9%), and the euro area (6.4%).

What defines unemployment in Bangladesh

Persons in employment are defined as all those of working age who worked a job at least one hour a week and were engaged in any activity to produce goods or provide services for pay or profit, own use consumption, and unpaid family worker.

But this employment definition, especially any activity to produce goods or services for own use consumption contradicts the International Labour Organisation's (ILO) standard.

According to the ILO in its 19th ICLS resolution adopted in 2013, employment work is defined as work performed for others in exchange for pay or profit, and using that definition employment work consists of 56.5 million or 80.1% of the working-age population. So, as per the ILO definition, 19.9% or nearly 14 million do not fall under employment as they do not work for pay or profits.

Professor Birupaksha Paul who teaches economics at the State University of New York, Courtland, said the Bureau of Bangladesh Statistics follows a defective definition of employment.

"Bangladesh unemployment data looks like people here are living in Switzerland. If we follow the USA Bureau of Labor Statistics, unemployment would be 20%," he said.

The official unemployment definition used in the US comes from the US Bureau of Labor Statistics, which states that "people are classified as unemployed if they do not have a job, have actively looked for work in the prior four weeks, and are currently available for work. Persons who are not working and are waiting to be recalled to a job from which they had been temporarily laid off are also included as unemployed.

However, Aziza Rahman, project director for the Improving Labour Market Information System (ILMIS) project, told TBS that the BBS conducted the labour force survey using both of the methodologies defined by the ICLS of the ILO.

The majority of the countries generate an unemployment rate using the new methodology and both of the findings regarding the number of unemployed people are correct.

She said that the unemployment rate using the previous definition has been highlighted to make it comparable with the previous time series data of the labour market