Published on August 2nd, 2006 | by admin0
More statistical puzzles
The economy is just not creating jobs
When government recently published new statistics showing that poverty in the country had dropped, insight welcomed the news but asked how this could have happened given strong suspicions that employment had hardly risen. Now a new set of statistical findings provide further support to those who believe the economy is simply not creating jobs. The 2004 Namibia Labour Force Survey, published recently by the Ministry of Labour, is the third in a series of labour force surveys following those carried out in 1997 and 2000. Taken together with the population and housing census of 1991 and 2001, a long-term picture can be put together showing the extent to which government is succeeding in achieving its key development goal: to create employment for the mass of the population. Unfortunately, the picture is not an encouraging one. The new survey estimates the population to be 1.7 million people (a mystifying one hundred thousand less than the last census). Of these the survey cannot make up its mind how many are 15 years of age and over. Page 7 puts the number at 888,348 while the Indicators section and Table 3.3 put it at 1,024,110. Table 3.4 puts the number of people of working age (15-64) at 938,585. Of this population some 493,448 are estimated to be “economically active” that is to say not students, homemakers, income recipients, disabled, or retired people. This means that the labour force appears to have dropped by some 100,000 since the census and by almost 50,000 since the last labour force survey. In fact the latest labour force estimate is about the same as it was in 1997. Out of this labour force, about 385,000 people are “employed” while 108,000 are “unemployed”. The number of employed is lower than the estimate of 1997 and even of the 1991 census, which in those days excluded Walvis Bay. The drop in female employment appears to have been particularly steep since 1997. A question of definition The trouble with the concept of being “employed” is that it is a hard one to pin down. The Labour Force Survey counts anyone as employed if they have worked “for at least one hour for pay, profit or family gain during the reference period of seven days preceding the interview”. Those who did not work but had a job to return to are also regarded as employed. This puts the total of 385,000 employed people in perspective. The number includes, for example, some 16,000 unpaid family workers (the vast majority in agriculture) and 24,000 domestic workers, hardly the kind of employment government is aiming to create A better understanding of what is going on can be gained by taking a closer look at how the different sectors of the economy have fared in creating employment. Agricultural employment is back up from the surprisingly low level of the last census. But the really eye-catching changes have been in “wholesale and retail trade” – which employs considerably more people that at the last labour force survey – and in “real estate, renting and business activities” which has seen an almost equally sharp drop. These are probably two sides of the same coin since so much “informal” employment might have been hard to categorise and have now been placed under trade instead of business activities. Looked at since 1991 the real employment generating sectors appear to have been fishing (although this must be exaggerated given the previous exclusion of Walvis Bay), the service sectors and government. A total of more than 86,000 people are estimated to be employed by government or parastatals compared to 195,000 people employed by private companies. Underemployed For a whole variety of reasons – it is often casual, seasonal, unpaid family work – many countries focus on non-agricultural employment when they try and measure changes in employment. Agriculture is often regarded as “employment of last resort” providing a minimum subsistence for those who cannot find employment elsewhere in the economy. If agriculture is excluded from the picture, the latest survey suggests some 283,000 people are actually employed, about the same as shown by the census in 2001 and 20,000 less than in 1997. But underemployment is also pronounced. Of all those employed, almost 117,000 are “underemployed” that is to say available and preferring to work more or actively looking for more work. The hard truth seems to be that the economy has simply not been generating jobs. As a result, the rate of unemployment has risen. If the “broad” measure of unemployment is the preferred yardstick – the definition that includes people who do not have work and who are not actively searching for work – the survey shows that unemployment has risen from 34.5% in 1997 to 36.7% in 2004. Unsurprisingly, there seems to be a strong relationship between education and employment. While 43.2% of those with junior secondary education are unemployed, only 4.1% of those with university education are without work (although, curiously, the rate of unemployment for those without any education is lower than for those with primary or junior education). The latest survey will come as little surprise to many observers of the Namibian economic scene. The IJG Business Climate Monitor published at the back of insight each month shows that businesses are extremely reluctant to take on labour regardless of how the economy is faring. The job creation promised in successive Swapo manifestos does not appear to have materialised. The creation of a “Ministry of Employment Creation” and a “Council on Employment Creation” appears to have achieved little while everyone agrees that bloating the public sector has reached its limits. Government will have to do some serious soul searching to reverse what now appears to have become a long-term trend: low and jobless economic growth.