Topic

Unemployment in Pakistan

NAME OF GROUP MEMBERS

Mir Ahsan Ali
Hafiz Asad Altaf
Mohammad Faizan
Omais Waiz
Ajay Kumar
Zaki Agha
 Unemployment in Pakistan

INTRODUCTION
Workless people can always be dangerous to a country’s security.

 The frustrated youth of the country is falling a prey to drug-addiction, violence, theft, and
many other social evils. Smugglers, drug-traffickers and terrorists are engaging them in
heinous activities.

 A Working Definition of Unemployment:

“People able, available and willing to find work and actively seeking work – but not
employed”

Unemployment in Pakistan
Unemployment is one of the major issues confronted by our youth today. Every year many new
graduates are added into the labor force but few of them get very good jobs; some others get a
reasonable one but many keep on looking for jobs for a long time.

Recently, the unemployment rate of Pakistan increased to 6.5% and so it can be said that one out
of every 10 people of the country are suffering from unemployment.

The unemployment rate in urban areas of Pakistan increased by 2% to 10.1%, whereas, the
unemployment rate in rural areas increased from 4.3% to 5%.

According to Economic Survey of 2013-14, population of Pakistan is 177.1 million. Total labor
force is about 54.92 million out of which 51.87 million is employed and remaining 3.05 million
is unemployed. Rate of male unemployment is 5.6 % and female unemployment is 9.3 %. 

You will find so many graduates, master students, engineers and people of every profession
being wasted due to unstable employment system in Pakistan

Not only educated people of Pakistan, but also the labor class is going through a rough phase and
their daily life has become a living hell for them.

Over the years, many less developed nations and the developing nations have tried to wipe-out
the intensity of unemployment, which seems quite prevalent and widespread among these
countries. The reasons and causes for this have remained subject to different interpretations
depending upon the specifications, demographics, and regional profiles of different countries,
thus the perceptions regarding having a plausible solution lacks concurrency. Not surprisingly
among these unemployed a vast majority and victims belongs to young age group. According to
ILO, there are 160 million unemployed people in the world and 40 percent of those out of work
are young people. Pakistan is no exception to this, not only unemployment rates have been
beyond reasonable limits but also a vast majority who fall prey to this belongs to youth category.
As observed in various countries the unemployment graph accounted for age specification
reveals a U shaped pattern high unemployment in the initial phases or among youth category, a
moderate trend for the middle age group people and again highly intensive among old. Pakistan’s
trend is not far apart from this general trend. Moreover distribution of unemployed according to
gender figures out high unemployment rates on the part of females. The recent government
programs have contributed to a high degree in confiscating the child labor by launching the
educational campaigns rigorously and by increasing the enrolments at primary levels especially
in urban areas. This policy of promoting the education has confined the variance of
unemployment rate to reasonable extent on the part of males but on part of females the
conventional and traditional norms are still strong enough to impede the way of females from
coming out of this hall. Table 1 has fortified these distributional impacts for the economy of
Pakistan which clearly testifies that among the young age group unemployment rate has been
higher and also among old, furthermore the data also figures out the intensity of unemployment
among females.

suicides cases by unemployment

Over the same period, 1,160 cases of attempted suicide were reported. According to the report;

 469 people committed suicide for domestic reasons.

 136 because they were unemployed.
 193 over disputes within families.
 74 over the rejection of marriage proposals.
 85 after fights with parents.
 97 because of poverty.
 159 for other reasons.

Major Causes of Unemployment in Pakistan

The causes are endless and countless. But the major causes of unemployment in Pakistan are as
follows:-

1. Economic Causes.
2. Social Causes.
3. Financial Causes.
ECONOMIC CAUSES
 Low Industrial Growth Rate

Low industrial growth rate is 1.7 % in Pakistan. Number of industries is not increasing in
Pakistan. Lack of industries means less opportunities of employment.

 Mechanization of Agriculture

Due to mechanization of agriculture there is less use of labor in agricultural sector. These
unemployed persons move to cities to find jobs at less wage rate. Accordingly, use of
modern techniques in agricultural sector is also a further cause of unemployment and
under employment.

 Reduction in Foreign Employment

Due to illiteracy, ill training and lack of skill & efficiency demand for our labor in
foreign market is decreasing. It also creates problem of unemployment.

 Use of Advanced Technology

A poor country uses backward techniques of production and labor intensive technologies.
But when it uses the advanced technology there spread more unemployment in the
country.

SOCIAL CAUSES
 High Population Growth Rate

One of the major problems regarding unemployment in Pakistan is uncontrolled growth

of population. The population of Pakistan is increasing at very high rate this time.
According to the statistical the population of Pakistan is increasing at the rate of 2.2%.
There are plenty of factors responsible for over population such as early marriages,
illiteracy, desires for sons, lack of awareness etc. As we all know that the education
system of Pakistan is not upto the mark therefore increasing in population means bring
more uneducated person into the field of labour. Government or any other company
cannot provide jobs or work places to this huge amount of uneducated people at time.

 Illiteracy & Literacy

 Illiteracy and literacy both are the causes of unemployment in Pakistan. Due to Illiteracy
people are not able to work and they remain unemployed. On the other hand number of
educated is increasing annually but government is unable to create employment
opportunities e.g., students of B. Com. are increasing at very fast speed but they cannot
find jobs and admissions for higher education. Rate of illiteracy in Pakistan is 42.3 %.

 Follow New Trend of Education

Students are that whenever there comes a new trend or a new technology, then everyone
follows to study that specific subject only rather than differentiating themselves they all
follow the same pattern.
Later, when there are only 5-10 vacancies of that specific field the number of graduates
of that field are in thousands.

 Under Govt. Educational Institutions

The education system in Pakistan has been really poor since the creation of Pakistan.
Unfortunately any government since independence didn’t take especial steps to make the
education system good. Education system in Pakistan is unbalanced. It has been seen
even talented students left study due to injustice of system. You will see many technical
educational colleges and private technical institutions are being found which are only
selling degrees because technical education which is being given in these institutions has
no value, therefore people are wondering about for jobs due to lack of experience and
skills.
Around 80% of the educational institutions in Pakistan are under government. So, our
educational and technical institutions do not equip the students properly to suit
international and at times even local markets.

 Lack of Confidence in Educated Persons

A student may have a master’s degree ,but when he walks into an office for his interview,
he lacks the confidence to carry himself for a formal conversation and in the end so many
students of this type are rejected and left unemployed.

 Lack of Technical Education

Today, literacy rate is 57.7 %. Number of students of every field especially of commerce,
are so large but employment opportunities for them are few.

 Rural-Urban Migration
Pakistan an agricultural based economy, is currently undergoing the process of
mechanization. Labor is being replaced by machines, creating unemployment in rural
areas.
  Political Instability
There is political instability in Pakistan, which creates less attraction for foreign
investment. Due to political instability investor hesitates to invest.

 Afghan Refugees
They create a bad effect on our labor market. They are ready to work more at less wage
rate.
Afghans refugee to Pakistan is the additional problem of unemployment in Pakistan.
When American army attacked on Afghanistan in 2001 about 13 years ago and due to
this plenty of Afghans migrated to Pakistan for making them save till the betterment
situation of their country but the situation in Afghanistan is still critical. The migrated
people caused labour markets as they are ready to work for fewer wages.

 Nepotism and Favoritism

It means selection according to relation, language, caste, sects not according to ability.
Here deserving candidates do not get jobs and remain unemployed or under employed.
 Law and order situation of Karachi
Karachi is the biggest and an ideal place in terms of industrial base of Pakistan. Sadly,
investors are not willing to invest in Karachi due to violence that has taken over Karachi
in the past few years.

FINANCIAL CAUSES
 Lack of Credit Facilities
It is so difficult to manage the personal business and self-employment due to absence of
easy credit facilities. Accordingly, shortage of credit facilities is also a main cause of
unemployment
 Deficiency of Capital
There is shortage of capital that leads to low level of saving and investment in Pakistan. It
results in low rate of capital formation and caused in unemployment.

Recommendations & solutions.

 Establishment of Employment Offices
There is not any single office for the information about employment opportunities in
Pakistan. More and more employment offices should be established these would cause in
reduction in unemployment.
  Population Control
Fast growth rate of population should be controlled. Due to population control there will
be more employment opportunities and reduction in unemployment.
 Growth of Industrial Sector
Government should provide basic infrastructure to established industries is rural areas.
Growth of industrial sector is needed to reduce unemployment.

 Reduction in Retirement Period

Retirement age is 60 years in Pakistan. It should be reduce to 55 years to provide more
employment opportunities
 Subsidies to Private Sector
Stable government is required to subsidize the private sector. Government should help
the private sector to development. It will create more employment chances.
 Job on Merit
Government should eliminate the nepotism and favoritism. Employment opportunities
should be provided in accordance to skill and ability.
 Economic Growth
Govt. should make efforts to push economic growth process. For this purpose Economic
Revival Package should announce for the revival of industries sector, to stimulate
production and investment.
 Fiscal and Monitory Policies
Beside this a number of fiscal and monetary measures should take to attract industrialists
and particularly foreign investment.
 Export more than import
Government needs to motivate people to export more than import through broadening the
tax base and by lowering down the tariff plans.
 
 Foreign Investment
The government need to make such policies that attracts foreign investment in our
country which will lead to more job opportunities.

Conclusion
In conclusion, another erupting challenge standing before Pakistan is wide-spread
unemployment. Thousands of educated graduates are jobless. Hundreds of thousands of
unemployed workers are forced to lead their lives below their status. Large scale unemployment
has serious effects on the country’s production also. Moreover, the country’s population has
drastically increased during recent years. Therefore, every step taken to improve the living
standard of common man proves to be futile and ineffective.

We conclude that there are two major elements, which can reduce the unemployment i. e., use of
labor intensive industries and adoption of self-reliance policy. Progress and prosperity is
impossible without the reduction in unemployment.