Time to Do Something about Underemployment

Are you one of those who think they have a job merely because the alarm is set to wake you up every morning and tackle Addis Ababa’s discomfort of transportation to get to office? Are you coerced to do a part time job when what you want is to work 40 hours a week in an office? Are you a secretary, these days referred administrative assistant, using an old typewriter in the world of computers or simply using the latest Macintosh computers for solitary games? Or, are you an Engineering graduate who took up a cobblestone job with the nation’s road construction projects?

No matter how much you make, if your employment resembles any one of these cases, Human Resource theories suggest that you are rather underemployed. This situation has numerous consequences with regard to your personal future and the economy in general.

Theory and industry observers agree that four to six per cent of underemployment in an economy is normal. Even such a rate, they also say, should not be a story for governments to brag about. Rather; governments should always work to bring it further down.

It is difficult to measure unemployment in less developed countries such as Ethiopia because of the lack of reliable data and the existence of various informal types of work. That makes it more challenging to raise issues of underemployment, which requires more complex data collection and analysis than unemployment. However, in the recent scenario in the country where university graduates are being encouraged to go for daily labor, it is timely to discuss matters of underemployment.

What has puzzled industry observers and the media over the past several weeks regarding the issues of youths engaged in cobblestone, farming and bee hiving in Ethiopia is rather the understatement and misunderstanding of some senior officials of the Ethiopian government. Junedin Sado, Civil Service Minister and Board Chairperson of the Addis Ababa University (AAU), was one such senior official. While addressing the 2012 graduates of the University at the Christmas Hall, on July 7, 2012, he suggested that the graduates could be employed in cobblestone work. This was booed by the prospective graduates, who resented the employment the Minister had in mind for them.

Soon afterwards the Minister of Construction and Urban Development, Mekuria Haile, also a board member of the AAU, was heard saying that cobblestone jobs needed engineering knowledge. His statement was indicative of what awaits the Engineering graduates of this nation.

Human resource experts, however, question why the nation is investing so much training students in universities to engage them in cobblestone jobs, while unskilled laborers can take these jobs. In fact thousands of unskilled citizens such as former beggars and street dwellers are already in the business.

Mukuria further mentioned that the nation has managed to create about 1.3 million jobs in the just ended fiscal year, mainly in small and micro scale enterprises. In fact he showed the number of jobs created as a sign of rather ‘a fast-growing’ economy. He said this while addressing a three-day workshop held at Mekele, the seat of the National Regional State of Tigray in August 2012. Senior federal and regional government officials were in attendance to evaluate the achievements of the national plan to create more jobs in small and micro scale enterprises (SMEs).

According to the Minister, SMEs running construction, services, trading, manufacturing and urban agriculture businesses had created 661,000 jobs. The lion’s share goes to housing projects; urban infrastructure development, in which cobblestone works are dominated; energy generation; railway construction; and sugar factory construction projects.

The achievement, according to Mekuria, was above the target. In the three days workshop, it was also mentioned that the new fiscal year would bring in 1.7 million employment opportunities.

In spite of the over million jobs created, no statistics seems to support how many of these jobs were free of underemployment. Even the National Labor Market Information Bulletin issued by the Ministry of Labor and Social Affairs does not provide any information regarding underemployment in Ethiopia.

The Ethiopian Radio and Television Agency (ERTA) also aired a long programme during the last week of September 2012, where it broadcasted a programme regarding university graduates engaged in cobblestone work, graduates of psychology engaged in ploughing the land the way their parents used to do, accountants engaged in small scale horticulture, and amazingly a masters graduate in business discipline and university lecturer engaged in hairdressing. Since then the issue of university graduates working in areas that do not require skills attained at higher education have become common in ERTA’s news coverage.

Underemployment: Is it an issue for Ethiopia?

Giving a specific definition for underemployment is difficult. The International Labor Organization (ILO) says that it could occur when employed persons have not attained their full employment level in the sense of the Employment Policy Convention adopted by the International Labor Convention in 1964. According to this Convention, full employment ensures that (i) there is work for all persons who are willing to work and look for work; (ii) that such work is as productive as possible; and (iii) that they have the freedom to choose the employment and that each worker has all the possibilities to acquire the necessary skills to get the employment that most suits them and to use in this employment such skills and other qualifications that they possess. The situations which do not fulfill objective (i) refer to unemployment, and those that do not satisfy objectives (ii) or (iii) refer mainly to underemployment.

Based on the above explanation, underemployment is certainly an issue in Ethiopia.

The 2009/10 Labor Market Information Bulletin issued by the Ministry of Labor and Social Affairs (MoLSA) states that there were 46,304 vacant posts in Ethiopia. In the same year there were 242,873 registered job seekers.

Surprisingly 86.8 per cent of the vacant posts were opened for unskilled laborers. Professional posts accounted for only 5.8 per cent of the vacancies.

What makes the statistics so worrying is the number of students who had graduated during the same year across the country – 55,770 with undergraduate degrees and 3,257 students with post graduate degrees. Forget underemployment and let’s assume that all jobs were to be given to university graduates, the nation could not still place them all. The fact that 86.8 per cent of the vacant posts opened in the same year for unskilled labourers implies that the nation is training citizens that it will not later utilize.

This raises questions like, where these graduates should be placed? And if the growing economy is generating jobs mainly for the unskilled labourers, why is the federal government spending billions of taxpayers’ money on training students at higher education?

Underemployment reflects under utilization of a productive capacity of employed population. If underemployment is widespread, it means the economy will be operating below its potential capacity.

Although there is a widespread underemployment in Ethiopia, statistics showing the magnitude of the problem seems unavailable. A search at the Central Statistics Agency and the Ministry of Labour and Social Affairs proved fruitless. This raises a question whether the nation views underemployment as an issue at all.

The existence of underemployment shows the presence of inefficient use of public resources. Given most university studies are funded by the taxes government collects from the public, producing university graduates who are not absorbed by the economy is more like an unproductive public spending.

The Costs of Unemployment and Underemployment

Theory seems to share the opinion- underemployment, if not given sincere attention, will end up causing economic, social and psychological complications. The same goes for unemployment.

One such impact is the pessimistic outlook such people develop on their present and future lives. Research indicates that underemployed people are more likely than the employed or unemployed to experience negative emotions. A study conducted by Gallup University, a university known for its human behavior studies in the United States, shows that the majority of the underemployed are not hopeful about finding a job, trends that are sure to contribute to daily worry, sadness, stress, and anger.

Research conducted by the American Psychological Association further strengthens the above idea. A survey conducted in 2009 by the Association shows that unemployed workers are twice as likely as their employed counterparts to experience psychological problems such as depression, anxiety, psychosomatic symptoms, low subjective well-being and poor self-esteem.

The burden of unemployment and underemployment can also affect outcomes for children. The stress and depressive symptoms associated with job loss can negatively affect parenting practices such as increasing punitive and arbitrary punishment. As a result, children raised by unemployed or underemployed parents report more distress and depressive symptoms. Depression in children and adolescents is linked to multiple negative outcomes, including academic problems, substance abuse, high-risk sexual behaviour, physical health problems, impaired social relationships and increased risk of suicide, the research indicates.

In a society like Ethiopia, where the dependency is high and family structures are usually extended, university graduates are expected to get jobs and share the economic burdens of their parents. So when graduates are unable to get jobs it becomes psychologically painful. A growing trend on unemployment and underemployment of graduates is also likely to cause loss of educational appetite among junior students in the university and down the echelon.

A United Nation’s statement in 2010 on the matter disclosed that underemployment may result in a social unrest, tension and a growing feeling of living in an unfair nation. The implications of these problems can not be underestimated. In fact if the situation is not handled, it may result in serious unrest and widespread instability in any country.

What should be the fix?

Much of the discussion to find solutions to the unemployment and underemployment problems is about achieving faster economic growth.

There is a need to overhaul the education and training system in the country. Young people should be trained with a greater focus on directly relevant and needed vocational skills in the market. This calls for the need to study industries sector by sector and analyse the kind of employees needed. It also need that government should project the number of new jobs to be created in each discipline based on its development plan and growth projections. Then higher education institutes should manage the quality and quantity of their trainees as per the demand of the economy. As things stand, the higher education system in the country does not seem to be producing graduates that fit the needs of the economy.

At the moment, it is clear that numerous vacant posts are available in construction areas. Some of the construction sites regularly display vacant posts to be filled. On the other hand, there is a situation, where hundreds or maybe thousands of graduates line up for a single vacant post, say in secretarial science or marketing.

Relying on just educational expansion as a means of social and individual advancement has begun to have diminishing returns, and perhaps counterproductive results. A research conducted by Beverly H. Burris, Professor of Sociology at the University of New Mexico, on the human effects of underdevelopment, suggests that more and more college graduates feel that they were not using their skills attained at colleges. Although the data is more obsolete, workers who felt that they were not fully using their skills increased from 27 per cent in the 1969, to 36.5 in 1977. The situation is likely to continue as the revolution in technologies has simplified and shortened work processes making the use human resources less relevant.

This situation is not a reality of the United States alone; several countries in Europe and the rest of the world have also experienced the same thing. So the need for a prudent response is unquestionably timely, if not late already. This urgent response would for sure require reinvigorating the entire landscape of the nation’s higher education systems.