24 November 2021 09:23 am Views - 182
While Sri Lanka had made progress in bringing its official jobless rate down, the issues facing the workers appear to run deeper as many who lost their employment due to the pandemic-induced economic restrictions appear to have given up looking for work, a segment, which isn’t captured in the official unemployment rate.
Sri Lanka’s official jobless rate came down to 5.1 percent by the end of June this year, according to latest data released by the Census and Statistics Department, easing from the 5.8 percent reached during the third quarter last year and 5.7 percent in the first quarter this year.
However, this data leave out the people who stopped looking for work as the Labour Force Participation Rate (LFPR) fell to 49.8 percent by the end of June this year, from 50.2 percent a year ago reflecting that some people who lost their jobs due to the economic hardships caused by the pandemic related restrictions have distanced themselves from the labour market.
This is because they have either lost hope in waiting for their jobs to return due to prolonged effects of the pandemic on their specific sectors of work such as leisure and tourism or some remaining in the sidelines due to the fear of the virus.
LFPR measures those who are both employed and unemployed but are looking for work, measured in relation to the working age population.
Its decline below 50 percent should spark alarm among policymakers as this indicates people are losing hope on their ability to rejoin the labour force due to the lingering effects of the pandemic, specially in sectors which are most susceptible to the pandemic.
For instance, those who worked in leisure and tourism industries, events, travel and others which require close proximity to people were the first to lose jobs and the last to be recalled due to the extremely slow nature of their recovery due to pandemic’s lingering effects.
For instance, the monthly Purchasing Managers’ Index data spotted continuously declining employment in the broader services sector due to higher pace of retirements and voluntary resignations, a condition which continued through October, according to such data available through the first ten months.
As the issues facing leisure and tourism, and the events segments pre-date the pandemic as they continue from the 2019 Easter Sunday attacks, these segments have seen their employees moving out.
Meanwhile, making matters worse, the highly unproductive agriculture sector continues to attract more workers from the industrial sector, a trend which gathered pace last year as the pandemic forced many people out of work and some of them appeared to have moved back to their villages where the main livelihoods is farming and agriculture.
For instance, 2.25 million people were engaged in agriculture representing 27.8 percent of the total employed population, which is an increase from 2.16 million or 27.1 percent a year ago.
Meanwhile, the industrial segment lost workers from 2.15 million to 2.04 million or from a share of 26.9 percent to 25.3 percent during the year while services added workers from 3.67 million to 3.79 million, slightly expanding its share of employed from 46.0 percent to 46.9 percent.
The changing labour market mix in favour of agriculture from industries should raise serious concerns for policymakers who are confronted with serious socio-economic challenges such as rising poverty, loss of income for large swaths of its population, loss of economic opportunities and escalating cost of living.
What is yet to be seen is the collateral damage caused to the economies of the farming community from the fallout of the abrupt and ill thought out transition into organic fertiliser use.
At a meeting held between President Gotabaya Rajapaksa and State officials representing the agriculture sector earlier this week, it was revealed that only 70 percent of the agricultural lands in the ongoing season had been cultivated so far.
Any shortfall in the cultivation of the entire arable lands available could deal a severe blow to farmer incomes and thereby their living conditions which will then fall on the budget - the taxpayers - unless addressed proactively, not to mention the food shortages and the inflationary pressures that could follow.
Meanwhile, the government’s pledge to give another 50,000 State employment to unemployed graduates makes mockery of their attempts to cut State expenditure. This runs counter to their claim that the public service is a burden to coffers.
Further, the proposal also runs against their quest to building a strong manufacturing economy and makes the private sector, which has been grappling with industry-wide labour shortages for decades, thoroughly disappointed as they few weeks ago hailed the government’s previous decision to halt any new recruitments to the State sector, which could potentially alleviate the labour market shortage facing them.