PERENNIALLY obsessed with securing the next IMF bailout package, our economic managers spend much time and energy curating facts and figures to meet the demands of the proverbial donor. There is one macroeconomic statistic, however, with which the ‘experts’ are least bothered: unemployment.
The publication of the latest Labour Force Survey caused a brief ripple but, predictably, the news cycle moved on swiftly. In my estimation, the LFS greatly understates the scale of unemployment, making the lack of meaningful debate generated by its publication even more remarkable.
Let us start with the quoted facts: the official unemployment rate is said to be 7.1 per cent, equating to an absolute figure of around six million people. In the four years since the last LFS was published in 2021, unemployment has surged by 30pc, or almost 1.5m people. Youth unemployment rates are particularly high, with the 15-24 age group worst off at almost 13pc. Women suffer from fewer employment opportunities than men, with educated segments especially hard hit across the gender divide.
All of these figures — and there are many more — tell a story of a structural crisis that has no precedent in this country’s history. Put simply, the population is exceedingly young, with a median age of 23; millions join the labour force every year, with almost 180m out of 250m people of working age; and formal employment rates are actually decreasing over time.
Working people from a relatively declining agrarian sector have faced displacement for decades, alongside manufacturing and service sectors that cannot absorb the surplus labour. But the gap between the supply of jobs and the demand for them has simply never been as big, and growing as rapidly, as it is today.
Employment has been downplayed as a measure of the economy’s health.
People still have to find ways to make ends meet, which is why, as the LFS meekly acknowledges, three of every four men who do actually find work do so in the ‘informal’ sector. This figure is two-thirds for women. This means that the vast majority of workers in our society — and here I am referring not only to blue-collar segments — can only find impermanent and often highly exploitative work.
Recognising the sheer scale of informal sector work helps clarify why the officially acknowledged unemployment figures are a vast understatement. In a nutshell, a large number of informal workers suffer from chronic underemployment. They may be earning incomes, but they are easily let go, or work from one short-term job to the next, or fall into the category of self-employed. In all these cases, they simply do not earn enough to make ends meet. They run from pillar to post to do so, but then so do tens of millions more. The huge demand for work relative to the supply of jobs pushes wages and working conditions further and further down. This is an acute case of what Marx called the reserve army of labour.
The LFS includes mention of gig workers for the first time, and here too the story is bleak. Fifteen per cent of women and 10pc of men rely on gig work as a secondary source of income, confirming both underemployment and precarity.
Successive governing regimes in Pakistan have deliberately understated the structural crisis faced by working people, all while selling tales about ‘macroeconomic recovery’. To speak of the ‘economy’ is an abstraction without mention of the labouring majority of the population that is supposed to be the object of state policy.
Donors and Pakistan’s economic managers alike have consistently downplayed employment as a measure of the economy’s health becÂaÂuse the object of state policy has patently not been working people. Instead, external creditors, foreign and domestic invÂestors, big business cartels and resource-grabbÂing state personnel are both the subjects and objeÂcts of policy. This is why there is no long-term interest in land reform and industr alisation, and an obsession with geostrategic rents, resource extraction, speculative finance/ crypto and real estate.
And then there is ‘national security’. Take only the example of border trade, which is a source of informal income for millions of working people. When the Iran or Afghan border is shut in the name of security, the bigwigs who dominate the trade still do their business, but the daily wage earners are left completely high and dry.
The British Raj once worried about ‘dangerous classes’ whose disaffection could pose a threat to the political and economic imperatives of the empire. Today, the successors to the Raj are busy turning the majority of working people into dangerous classes. An eruption of popular discontent from below is inevitable, sooner or later.
The writer teaches at Quaid-i-Azam University, Islamabad.
Published in Dawn, December 5th, 2025