As the year 2016 starts with a lot of troubles across the globe and everyone wishing for improvement, two forecasts in the first month of the year gave an ominous signal. The core message of these forecasts is rise in unemployment across the world in the coming years.
International Labour Organisation (ILO), in its latest report titled 'World Employment and Social Outlook Trends 2016' projected that global unemployment would rise by nearly 2.3 million in 2016 and further 1.1 million in 2017. The report, released in the third week of January, also mentioned that the number of unemployed people was about 197 million in 2015, which will surge to 200.5 million by the end of 2017. ILO pointed out that slow growth of global economy is not generating enough jobs.
Three days before the ILO released such a gloomy forecast on the global job market, a report released in the annual meeting of the World Economic Forum (WEF) at Davos came out with a similar grim forecast. The report said that there would be a net loss of 5.1 million jobs over the next five years in 15 leading countries of the world mainly due to rise of robots and artificial intelligence. These 15 countries currently account for around 65 per cent of the world's total workforce. Not that there will be no job creation at all. WEF projected that there would be 2 million new jobs but at the cost of 7.1 million jobs lost.
LOW GROWTH, HIGH TECH: The major reasons behind projecting such job losses in the next two to five years are interrelated to some extent. ILO identified slow growth of world economy as the major reason for increase in unemployment in the coming days. International Monetary Fund (IMF) estimated that global economy would grow by 3.1 per cent, 3.4 per cent and 3.6 per cent in 2015, 2016 and 2017 respectively. The growth is below 4 per cent since 2011. Low growth reduces scope of more jobs and this is what is going to happen in the days ahead.
On the other hand, WEF study report identified high level of technological innovation as a threat for millions of jobs. The outcomes of such innovation are robots and artificial intelligence (AI). In fact, AI is the most exciting and, at the same time, most controversial field in robotics. Although there is no doubt that a robot can work efficiently in an assembly line, there is a lot of disagreement whether a robot can ever be intelligent.
The WEF study, aware of the technological innovations especially in robotics, cautioned that human labour forces will have to pay for such innovation. Thus, technological innovation, which is considered one of the major drivers of economic growth, again comes under critical scanner. Over the last few decades, technological innovation and its gradual expansion drove the global economy significantly. But, there is no strong consensus among the experts and economists that such innovation has wider positive impact on economy. The much cited examples in this regard are the United States and Japan. A book titled 'Technological Innovation and Economic Performance' published by Princeton University Press in 2002, observed: "Although innovation drove a late-1990s US productivity surge in a few key computer-related industries, there is no strong evidence that this had a transformative effect on the rest of the economy. Conversely, Japan's extended slump was caused not by a failure to innovate, as many believe, but rather by deep-seated structural and macroeconomic failures."
The WEF study has caused unhappiness among the Davos participants who are mostly leaders and representatives of the global corporates. Every year, they gather at the Swiss ski resort to outline their next course of action for attaining higher profit and acquiring more resources. As a cover for the highly profit-motivated initiative, some pro-people agendas like 'Decent Work and Economic Growth' or 'Peace and Justice' are also there. But forecast like 'tech-driven growths to steal million of jobs' was disconcerting for the organisers and participants alike.
WHERE IS BANGLADESH: Bangladesh Bureau of Statistics (BBS) recently published the Labour Force Survey (LFS) 2013 which provides the latest official data on job market situation and it is for 2013. According to LFS, unemployment situation in the country remained almost unchanged during the last one decade. The rate of unemployment was 4.3 per cent in 2003 which remained static in 2006 but increased to 4.6 per cent in 2010 and again slided down to 4.3 per cent in 2013 and 2.6 million people were unemployed in that year.
The survey also revealed that the number of employed people increased to 58.1 million in 2013 from 54.1 million in 2010. The Sixth Five-Year Plan (6FYP), however, projected to increase total employment to 61.6 million people at the end of the plan period 2015 (FY15, to be precise). The LFS data clearly shows that employment generation is very much in line with the projection of the plan (Table-1).
It is a good sign as 6-plus growth rate of the economy is accommodating more people in the job market. Â
However, the statistics on unemployment appears to some extent misleading, although BBS follows the criteria formulated by the ILO. According to this criteria, an unemployed person is he or she who, during the reference period, was without work (neither in paid employment nor self-employed); or currently available for work (either paid or self employment) during a week; or seeking work (had taken specific steps in a specific reference period - generally one month- to seek paid or self employment). In fact, the ILO measurement of unemployment assesses the number of jobless people who want to work, are available for work and are actively seeking employment.
There is also a mismatch in projecting the source of employment in the 6FYP. The 6FYP said: "The employment target for the Sixth Plan will be to create adequate number of high productivity, high income jobs not only for new entrants but also to allow a substantial transfer of labour from the informal sector to the formal sector." In reality, the opposite happened. About 87.5 per cent of the country's total employment is in the informal sector. As a result, the number of employed people in the informal sector increased by 150 per cent, from 35.1 million to 50.8 million in a decade, while employment in the formal sector actually declined from 9.2 million to 7.3 million. Â
In view of the bad signal for global employment situation in the coming days, there is the critical need for Bangladesh to synchronise economic policies to cushion against any eventualities that might seriously affect employment generation.
asjadulk@gmail.com
Grim signal for employment
Asjadul Kibria | Published: February 10, 2016 00:00:00 | Updated: February 10, 2016 00:03:03
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