Asia-Pacific: Quality and quantity of jobs dropping

Slowing growth in many Asian countries has accentuated labour market challenges in a region that has the world’s largest youth population, and where precarious work is widespread.

HANOI (ILO News) – Economic growth has slowed down in many Asia-Pacific countries, affecting labour markets both in terms of the quantity and the quality of jobs available, according to an ILO report.

The October 2012 Asia-Pacific Labour Market Update, says jobs growth in the region has slowed down compared to 2011, although the situation varies greatly among countries.

For example, while Indonesia, the Philippines, Australia, New Zealand and Taiwan (China) experienced a significant slow-down in employment growth, the Republic of Korea and, to a lesser extent, Singapore and Thailand, saw a rise in job creation.

Employment growth, latest available period 2012

Poor quality of employment – which often means low wages and limited access to rights and benefits – is another huge challenge for the region, especially in developing countries.

“Urgent measures are needed to create more and better jobs and to reactivate sustained growth and development,” said ILO Vietnam Country Director Gyorgy Sziraczki. “New initiatives should focus on supporting infrastructure development to boost employment and long-term productivity growth, improving access to bank credits for small and medium enterprises, and extending the coverage of social protection, especially in developing Asia.”

Around four out of five workers in Nepal, India and Pakistan work informally in the non-agricultural sector. In Indonesia, the Philippines and Viet Nam, the proportion was around 70 per cent. Many of these workers are women.

The latest data shows unemployment stands below 5 per cent in most Asian economies. There are no signs of this changing in 2013.

Glum outlook for youth

Labour market prospects for youth – aged 15-24 – remain gloomy in parts of the Asia-Pacific region, which has the world’s largest youth population.

One in six young people are unemployed in Taiwan (China), Hong Kong (China), the Philippines and New Zealand. In Indonesia, the ratio is one in five.

Youth make up nearly 60 per cent of the unemployed population in Samoa and 50 per cent in Vanuatu. In the Marshall Islands, economically active youth are nearly three times as likely to be unemployed as their adult counterparts.

“Unless Asia taps the full potential of young women and men, its quest for prosperity and development remains elusive,” said Sziraczki.

A major challenge for companies, workers and governments alike, is the mismatch between the skills that are available and the needs of the labour market. In Malaysia, for example, there were 340,000 registered jobseekers in July 2012, but only 1,700 job placements, leaving 153,000 registered vacancies unfilled.

“The priority area for policy makers in the region is reforming the education and vocational training system, making sure that the link between this system and the industries is stronger and more relevant,” said ILO Bangkok labour economist Phu Huynh, an author of the report.

But unemployment and skills mismatches are only two dimensions of the problem, as there are far more young people working in poor quality and low-paid jobs than there are unemployed.

The recent tragedy at a Pakistani garment factory was a stark reminder of this reality.