Working people’s real income falls

In between 2010 and last year, number of people employed in three economic sectors in Bangladesh - agriculture, service and industry - rose from 54.1 million to 60.8 million. In terms of absorbing the workforce, service sector is doing relatively a better job than the industrial sector while farm sector, though remains top employer, has been on the slide.

Service sector is fast catching up to the agriculture sector in terms of generating maximum number of employments in Bangladesh. The sector's contribution to employment generation marked a remarkable growth from 25.5 percent in 2010 to 39 percent in last year.

With agriculture still absorbing 40.6 percent of the country's 60.8 million workforce, the farm sector's employment generation capacity witnessed continuous fall since 2010.

Though industrial sector has contributed a lot in accelerating the country's GDP growth over the past seven years, the sector's role as employment generator was not that great. It now absorbs 20.4 percent of employed workforce comparing to 17.7 percent back in 2010.

According to a recent CPD (Centre for Policy Dialogue) report, within the service sector the majority of the additional jobs were created in wholesale and retail trade, transport, food and beverage etc.

Majority of additional jobs in the industrial sector were created in manufacturing of wearing apparels and in construction of buildings. Many important manufacturing industries, including textile and food products, continued to experience loss in terms of net jobs, CPD report stated.

Of the 60.8 million people currently being employed in various economic activities in Bangladesh, 24.7 million are working in agriculture sector, 23.7 million in service sector and the rest 12.4 million in industrial sector.

Back in 2010, total number of people employed was 54.1 million. Sector-wise distribution of that workforce was - 25.7 million in farm sector, 19.1 million in service and 9.6 million in industrial sector.

But the most worrying episode in this growth spectrum is - though employment generation marked some increase in recent years, the real income has declined. In CPD's words, Bangladesh is sliding towards an 'incomeless employment' as real income of working class people has declined.

"Female workers and rural workers are facing more decline in their real monthly income while the unemployment rate among the youth with higher education is increasing," Dr Debapriya Bhattacharya, distinguished fellow of CPD came up with the remark during a programme in the city presenting CPD's recommendations for fiscal 2018-19 budget recently.

According to CPD report, the real monthly income of female suffered 3.8 per cent erosion, while that of man suffered 1.9 per cent erosion nationally. And though in urban area, male workers monthly income marked a marginal rise of 0.9 per cent, in rural area male workers face 4.1 per cent erosion in their income.

Despite the improved number of employment, average real monthly income suffered erosion in the last financial year. CPD emphasizes on refocusing development objective from the existing 'GDP Growth Acceleration' centric strategy to a 'Decent Employment Generating High Economic Growth' centric strategy. GDP growth trend does not necessarily capture the underlying fact that people living below a certain economic strata at times find themselves in soup. Erosion in real wages/income put people in economic hardship and they lose purchasing capacity.

It is also found out that unemployment rate has remained constant at 4.2 percent due to the balance of increased labour supply and increased demand. Definition of employment is rather loose here - a person working for only one hour in a week is also considered as employed. The concept of decent work in the SDG framework goes far beyond this definition. CPD observed that unemployment rate among the relatively more educated labour force, particularly with secondary and tertiary education, has risen.

People with no education have a far better unemployment rate (only 1.5 percent) comparing to people having secondary and tertiary-level education (14.9 percent and 11.2 percent respectively). Besides, it is found out that unemployment rate among the youth increased from 8.7 percent in 2015-16 financial year to 10.6 percent in 2016-17 FY. More than one-third of the total youth labour force with tertiary education (34.3 percent) remained unemployed in the last fiscal.

Against this backdrop, we have to look at the qualitative result of GDP growth and how the increasing GDP is having its impact on general people's lives. At national level an accelerating GDP growth means, among other things, country's shining prospect of graduation from a least developed country to a developing economy. But at a microeconomic perspective it is equally important to see how individuals across the economic spectrums live and thrive as national economy keeps prospering.

Reaz Ahmad is Executive Editor, United News of Bangladesh

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