Deciphering the employment riddle

People work for living a worthwhile life and ensuring for themselves a livelihood. For this, they have to search for jobs or work most suitably for them. They have to look into the job market. Again, firms and enterprises require workforce to employ and run business activities. Due to this, they look into the labour market which supplies labour force.  All these processes are full of complexities and difficult to understand most of the time. Sometimes, the issue of labour market and employment triggers confusion and creates riddles even for the policymakers.
Against this backdrop, the latest book by eminent economist Rizwanul Islam, titled 'Unnoyon Bhabnay Kormosongsthan O Shromobazar' (Employment and Labour Market in Development Thoughts), appears as an important contribution to the deciphering of the riddles mentioned above.
The book, written in Bengali, is actually a true reflection of Mr Islam's long work in the field of labour issue in local and global contexts. He started his career as a lecturer at the Department of Economics at Dhaka University in the early '70s and has continued it for several years. He finally joined International Labour Organisation (ILO), where he served until 2009 and had retired as special adviser. Thanks to his professional engagement with the international body, he had the vast opportunity to work on labour market and employment.
Clarifying concepts
There is a dearth of knowledge on employment generation and labour market dynamics in Bangladesh. The theoretical concepts are also not clear to many. Rizwanul Islam puts stress on clarifying different concepts of labour economics.
An interesting topic that he discusses is the rate of unemployment. It is really difficult to understand why unemployment rate in Bangladesh is lower than that in the United States or United Kingdom. For example, unemployment rate in Bangladesh is 4.1 per cent (as of 2010 labour force survey), while the rate is 8.3 per cent and 8.2 per cent in the USA and the UK respectively (as of January, 2012). These figures clearly show that having lower unemployment rate doesn't mean better economic performance. Then, what leads to 'lower unemployment rate' in the poor countries like Bangladesh even when huge numbers of jobless people are very much visible? Dr Islam clarifies the riddle. He points out that it is related to the ILO methodology measuring unemployment.  
The ILO measurement of unemployment assesses the number of jobless people who want to work, are available to work and are actively seeking employment. But, at first a country needs to identify its economically active population with the help of labour force surveys. The currently active population (or the labour force) comprises all persons above a specified minimum age (i.e. 15 years) who, during a specified brief period of one week or one day, are engaged in merchandise or service production activities.  Students, the elderly, those unable to work and do not want to work are, however, excluded.
Now the 'employed' comprise all persons of the economically active population who, during a specified short period of either one week or one day or even an hour, just before the survey takes place, are engaged in paid-employment or self-employment. On the other hand, the 'unemployed' comprise all persons of the economically active population who during the reference period were: (a) without work or were not in paid employment or self-employment, (b) currently available for work during the survey period; and (c) those seeking work, which means actively searching for employment.
Thus the ILO definition of unemployment is intended to refer exclusively to a person's particular activities during a specified reference period. "And this is the reason why rate of unemployment is lower in developing countries like Bangladesh," says Dr Islam. He adds, "In the countries where a large number of population is poor, unemployment allowance is almost absent and people have to engage in any kind of work for sustaining their lives, there the number of people who do not work for an hour a week have to be very small which is not surprising. Moreover, this kind of people has to be involved in searching for employment, if they are labelled as unemployed. Where a large segment of the labour market is included in the informal economy and where no special mechanism of searching for formal work or employment is available, very few people can fulfil the condition there. Thus, a small segment of labour force is identified as unemployed." (Page-8)  
In fact, defining employed and unemployed labour force is not an easy task, and the ILO methodology is quite 'hectic'. That's why the author writes, "It is visible from the general scenario of employment and labour markets of developing countries that in many cases, there are no resemblances with existing concepts of employment. As a result, the number derived by using all accepted definition and measurement of unemployment couldn't reflect the real situation of labour markets of these countries.  That's why some other indicators of the labour market need to be used along with unemployment rate. Underemployment is also not easy to measure." (Page-15)
It is important to note that the author uses the term 'underemployment' instead of the familiar 'disguised unemployment'. It refers to those segments of the labour force, which, if removed from production activities do not have any effect on the production process.
Dr Islam tries to explain all such concepts in a simple language. But additional examples with some illustrations would have been more helpful in understanding these.
Linking Development
There is a proposition that economic growth automatically translates into benefits for the poor as it generates more employment. Dr Islam, however, categorically differs with such proposition on the ground that "there is no linear relationship between economic growth and poverty reduction or employment generation, as revealed in development experiences of many countries." (Page-17) In this context, he sheds light on pro-poor growth and discusses inclusive growth in detail.
Analysing 'cross-country' data, Dr Islam also says that the mixture of 'high-growth, low-employment' is more visible in developing countries than 'growth with no employment.'  Besides economic policy, he recommends reviewing other policies like labour laws to identify whether these policies are creating barriers to employment generation. He also stresses education and skill of labour.
In the final chapter, Rizwanul Islam reviews the employment situation in Bangladesh and concludes: "Though Bangladesh's achievement regarding economic growth is modestly satisfactory, the same thing cannot be said in terms of employment and labour market. In the long term, 2000-10, underemployment doesn't decrease, rather increases for men. Increase in women's participation in labour force and decrease in women underemployment are, however, a positive achievement." (Page-198)
The writer also mentions that the trend of wage increase has yet to become a permanent one.
In fact, Rizwanul Islam puts the issue of development in a wider context and shows the complex linkages between growth, poverty reduction and employment generation. He stresses more contribution from industries to GDP, and finds it to be a more viable option for employment generation.     
The book is divided into 11 chapters covering critical subjects such as labour market in dual economy, youth employment, employment in the informal sector, employment generation through public works programme, social safety and macroeconomic policy.  Discussions and arguments are substantiated by relevant statistics and graphs. A small glossary is also there.
Like his previous book `Unnayoner Orthoniti' (Economics of Development), this one is also expected to be very helpful for students, academics, researchers, activists, journalists and, even, policymakers. There are some gaps in Bangladesh in the study of the labour market and employment issue. Rizwanul Islam's sincere effort will definitely help reduce this gap.
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Unnoyon Bhabnay Kormosongsthan O Shromobazar
(Employment and Labour Market in Development Thoughts)
By Rizwanul Islam; Cover: Samar Majumder
Pages: 226; Price: Tk 450; Published by University Press Limited,       Dhaka, 2014