Unemployment is a global challenge, but in Pakistan, it’s reaching critical levels with deep-rooted economic and social impacts. Tackling this issue is crucial for the nation's stability and growth.
Pakistan’s unemployment crisis is worsening. The International Labour Organization (ILO) projects the unemployment rate to hit 9.5% in 2024, up from 6.2% in 2021. Female unemployment, often significantly higher than male rates, could soar to 11.1%. This increase reflects the ongoing fallout from the COVID-19 pandemic, the devastating 2022 floods, and persistent economic instability.
The ILO’s latest report shows a troubling decline in the employment-to-population ratio, which fell to 47.6% in 2023. With around 5.6 million people unemployed—a rise of 1.5 million since 2021—Pakistan is facing a serious setback in its quest for decent work. Looking ahead to 2024, the unemployment forecast paints a grim picture. Estimates vary widely, with some predicting a staggering 52.25% rate, while others, like the United Nations, anticipate 87.8 million unemployed individuals, equating to a 4.2% rate. The World Bank and ILO offer different figures, but the consensus is clear: the job market is in dire straits.
Pakistan’s recent $3 billion standby arrangement with the IMF, aimed at preventing a debt crisis, offers some relief. However, the short-term impact may be a tightening of public finances and additional stress on the labor market.
High youth unemployment fuels a range of social issues, from increased crime rates to precarious and poorly paid jobs. The lack of opportunities, combined with inflation, exacerbates these problems. The ILO emphasizes the need for robust social dialogue and targeted recovery strategies to create decent jobs, particularly for women and young people.
Addressing youth unemployment requires fresh, innovative approaches. Supporting startups, investing in the gig economy, and aligning education with job market needs are critical. Additionally, managing population growth, enhancing women’s participation in the workforce, and attracting international investors are vital for Pakistan’s economic prospects.
Pakistan’s unemployment crisis is a multifaceted problem with economic, educational, and political dimensions. To overcome these challenges, comprehensive and sustained efforts from the government and all stakeholders are essential. Prioritizing education, creating job opportunities, and fostering a supportive environment for entrepreneurship are key steps toward a brighter economic future for Pakistan.
The author is a student at Forman Christian College, majoring in economics.
