Report

Asia-Pacific / Economic growth is not generating sufficient decent and productive employment says the Asian Development Bank

The Asia-Pacific region as a whole has had considerable success with the Millennium Development Goals (MDGs), particularly in reducing levels of poverty. Nevertheless, the region is off track then it comes to hunger, health and sanitation – and even in areas such as poverty a number of countries are lagging some way behind. After the target date of 2015, there will therefore be a significant ‘unfinished agenda’. The region also faces many emerging threats including rising inequality and unplanned urbanization, along with climate change and environmental pressures such as pollution and water scarcity. Among the issues that will be of greatest importance in the years after 2015 are:

Poverty and inequality

Although levels of poverty have fallen, about 743 million people in the region still live on less than $1.25 a day. If the poverty benchmark is $2 a day, the number rises to 1.64 billion, revealing a high degree of vulnerability; some 900 million people could easily fall into abject poverty (below the $1.25 a day poverty line) due to personal misfortune or economic shocks or natural disasters. Another concern is increasing inequality. During the 2000s, while most Asia-Pacific countries enjoyed rapid economic growth, the benefits were being distributed unevenly. Between the 1990s and the latest available year, the population-weighted mean Gini coefficient for the entire region rose from 33.5 to 37.5. Income inequalities are evident between urban and rural areas, between women and men, and among different caste, ethnicity and language groups.

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Lack of decent and productive jobs

One reason why the region continues to experience significant levels of poverty and rising inequality is that economic growth is not generating sufficient decent and productive employment. This is due to the nature of growth and the pattern of structural change in many countries in which workers move from agriculture into low-productivity services. A consequence has been that many people are in vulnerable employment – working on their own or contributing to family work. Without adequate systems of social protection, they have to take whatever work they can find or generate, no matter how unproductive or poorly compensated or unsafe. About 60 per cent of the Asia-Pacific region’s workers are in vulnerable employment.

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Growth across countries in the region has not generated productive employment. This is due partly to technological change and labour substitution but also to the nature and pattern of growth. The problems tend to be greatest in countries that rely on extracting natural resources or the export of primary commodities – where growth is less likely to produce commensurate increases inemployment.Morecanbedonetochannelresources, especially those from extractive industries, towards employment generation. Countries can also tailor macroeconomic policies to generate domestic demand, catalyse investment and increase employment. Thus far, however, most countries have been neglecting the rural farm and non-farm sectors, which account for a major share of the incomes of the poor and the ‘near poor’.

All this is happening at a time when, as populations increase, the labour force in many parts of the region is expanding. As a result, since 2002 the formal employment-population ratio in South and East Asia, for example, has dropped significantly. This does not, however, mean that people are likely to be unemployed. Without adequate systems of social protection to fall back on, people have to take whatever work they can find or generate, no matter how unproductive or poorly compensated. Generally, a significant number of people work in the informal sector as self-employed workers, as own-account workers or as contributing family workers, and more than half are women.

These people can be considered to be in vulnerable employment. Globally, on average around two-thirds of the workforce is considered vulnerable. But the proportion is significantly higher, close to 80 per cent, in South Asia where 486 million workers are in vulnerable employment.9 Even in East Asia, which has had rapid economic growth, the proportion is around 50 per cent. Nor has there been much improvement in recent years. The proportion in vulnerable employment has been falling only slowly. Indeed, as a consequence of population increase, in some parts of the region the absolute numbers in vulnerable employment have risen – as in South Asia, South-East Asia and the Pacific over the period 2000 to 2011.10

Those in vulnerable employment make up most of what are considered as the ‘working poor’, and their numbers are increasing. About 1.1 billion workers, or 60 per cent of the Asia-Pacific region’s workers, are in vulnerable employment. The region accounts for almost 73 per cent of the world’s working poor – 422 million workers living with their families on less than $1.25 per day.11 Bangladesh, for example, has an unemployment rate of only 5 per cent, but more than half of those working are below the $1.25 poverty line, and the proportion increases to 80 per cent when using the $2 a day poverty line (Table II-2). Armenia on the other hand, which has stronger systems of social protection, has a 29 per cent unemployment rate, but among those who are employed less than 1 per cent are below the $1.25 poverty line, though the proportion increases to 9 per cent on the basis of a $2 poverty line.

Vulnerable employment is more likely to affect women. This is partly because many women work in agriculture. In Asia and the Pacific as a whole, 44 per cent of women work in agriculture compared to 36 per cent of men.12 A high proportion of women in agriculture are unpaid family workers, and women are more likely than men to be employed at a low- productivity, subsistence level. But women also tend to be in vulnerable employment even outside agriculture. In Bangladesh, India and Nepal, for example, around 90 per cent of female workers in non-agricultural employment are in informal work.

Unemployment or underemployment is also a concern for youth. Currently, the average rate of youth unemployment in Asia and the Pacific is around 11 per cent, more than double the rate for the total working-age population. Across the region, more than 80 million young people are looking for jobs. Lacking economic and social opportunities, many are forced into high-risk and vulnerable forms of employment.

Chosen excerpts by Job Market Monitor. Read the whole story at 

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via Asia-Pacific Aspirations: Perspectives for a Post-2015 Development Agenda Asia-Pacific Regional MDGs Report 2012/13

Discussion

6 thoughts on “Asia-Pacific / Economic growth is not generating sufficient decent and productive employment says the Asian Development Bank

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Trackbacks/Pingbacks

  1. Pingback: India / McKinsey calls for an ‘inclusive reforms’ to reduce poverty | Job Market Monitor - February 19, 2014

  2. Pingback: IMF – There is growing evidence that high income inequality can be detrimental to achieving macroeconomic stability and growth | Job Market Monitor - March 18, 2014

  3. Pingback: East Asia Pacific – more than 30% of people ages 15 to 24 are completely left out—they have neither a job nor receive any education or training says World Bank Report | Job Market Monitor - May 8, 2014

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