Ceylon Today Editorial

Joblessness increases

26 January 2017

Sri Lanka's labour force participation rate (LFPR) in the third quarter (3Q) of the current year declined over its 1Q figures, while unemployment increased, latest Census and Statistics Department (CSD) data showed.

Whereas the LFPR in the review period decreased from 54.1% to 53.8%, a 0.3 percentage point or a 0.55% fall, the unemployment rate in review period increased from 4.2% to 4.5%, a 0.3 percentage point or a steep, 7.14% incline.

In numerical terms, the LFPR in 1Q 2016 numbered 8,318,667; whereas by end 3Q, this figure had had jumped to, 8,376,002; a massive increase of 57,335 (0.69%).LFPR or the economically active population is defined as those who are 15 years and above who are employed, coupled with those who are of the same age category who are unemployed, but who are actively looking for employment.

However, from a percentage perspective, LFPR has declined from 54.1% to 53.8% in the review period. Such an indicator may be pointer to people giving up hope of looking for employment, as reflected by the lower LFPR, or, otherwise, due to ageing, which may increase their inability to search for work (thereby pushing, or else due to sickness, which too would make them unable to look for work.) On the assumption that the majority of those who are sickly are the aged and are therefore unable to search for work, based on that hypothesis,then, ageing comes first, ipso facto followed by sickness, therefore, another reason for the low LFPR may be due to ageing.

Based on that premise of thinking, it, then, logically follows, that the two reasons behind the lower LFPR may be due to ageing and/or simply people giving up looking for work, either because they have no hope of securing a job, or, the third reason, because they have got rich! If they have become wealthy, then too there is no necessity for them to look for work.

But, considering the fact that poverty in the island has stagnated last year, therefore, it's unlikely that the decline in the LFPR in the review period is due to poverty having had declined and those being rich have had increased, but, rather, the decline in the LFPR may be attributed to ageing and/or people, having had given up looking for a job, and not due to any other reason.

In fact Sri Lanka has been bogged down in poverty for the whole of last year, CSD data showed. Of Sri Lanka's 25 districts, 14 of those, or 56% of the island's total districts were mired in poverty at the beginning of last year, with no change in the status quo by the year end. (Ceylon Today of 20 January 2017).

In tandem with these unsavoury developments, it, naturally followed that the country's unemployment rate in the review period increased from 4.2% to 4.5%, a 0.3 percentage point or a steep, 7.14% incline. The ranks of the unemployed jumped from 349,686 to
376,180; an increase of 26,494 (7.58%) in the review period.

But, also from a numerical perspective, the number of employed in the review period increased by 30,891 (0.39%) to 7,999,821; whereas, those who were economically active increased much faster, by a speed of 57,385 (0.69%) to 8,376,002; but, not as fast as those who were considered as being of an eligible age for employment, which number increased by a massive 186,576 (1.21%) to 15,568,777 in the review period, hence the reason behind the decrease in the LFPR between the two review periods, because, not everyone who's eligible for work, according to the criterion adopted by CSD, was looking for a job, whereas among those looking for a job, their numbers have increased, as reflected by the unemployment statistics.

The increase in unemployment may be due to the drought, in the context that nearly 30% of Sri Lanka's labour force is employed in the Agriculture Sector. For instance the numbers of those employed in this Sector in the review period declined from 2,274,722 (28.5% of total employment) to 2,168,982 (27.1%); a fall of a massive 105,740 (4.65%) in the review period.

In comparison, the Industry Sector grew from 2,068,453 (26%) to 2,144,808 (26.8%); an increase of 76,355 (3.69%) and the Services Sector from 3,625,756 (45.5%) to 3,686,092 (46.1%); a hike of 60,336 (1.66%) in the review period. Those show that on a net basis a total of 30,951 new jobs were created in all three sectors, whereas the LFPR in the review period increased much more rapidly, i.e. by a number of 57,385 (0.69%) to 8,376,002; but not as fast as those eligible for employment which grew by 186,576 (1.21%) to 15,568,777 in the review period. The number 15,568,777 is derived by computation of the LFPR and the economically active population, as CSD hasn't given that number.

Therefore, it may be construed that the failure of the Agriculture Sector is the cause for increased unemployment in Sri Lanka.

The need therefore is to hone new skills to those in the Agriculture Sector to find alternate employment in the other sectors of the economy.