Pakistan's labour market is showing its inability to continue the past trend of labour absorption. Generation of additional work opportunities commensurate with labour supplies, increasing by over 3 percent annually, has emerged as the most formidable challenge of the nineties. The labour market is presently confronted with the twin menace of unemployment and underemployment. Although, the rate of unemployment has not as yet assumed serious proportions, the worrying aspect of this 5 percent unemployment is its concentration amongst the youth, and educated and trained. The under-utilisation of manpower, however, is manifested in the form of under-employment. There are more than a-tenth of the employed who find their work unable to keep them busy for 35 hours a week [FBS (1994)]. Further, those employed a-quarter of them find their employment income only meeting half of the subsistence requirements, while a similar proportion find their employment income barely managing to meet the subsistence requirements [NMC (1989)]. Lesser productive and low remunerative work opportunities is thus emerging as the major characteristic of the labour market in Pakistan.

The situation in the labour market is serious on yet another account. The working conditions of those lucky found employed, by and large, are not satisfactory, rather they are deplorable. Long working hours and poor working conditions are the normal features of a significant number of work places. A number of them also carry occupational safety and health hazards. The situation is compounded further by observing denial of basic rights to a large number of workers. (1) Existing labour laws require reforms and whatever exist face implementation lacunas. Further discomforting is the fact that the trade union movement in Pakistan stands divided and fragmented. (2) The internal hostilities and mistrust has greatly weakened the labour movement in Pakistan. Despite 50 years of their existence and the related work, the trade unions have miserably failed to respond effectively and collectively to the challenges confronting them and the society.

The labour market situation is also being affected by the existence of widespread prevalence of "child labour." Children, at times as small as being 5 to 6 years of age, are found working in numerous work places, a number of their activities carry considerable occupational and health hazards. And this is besides the fact that these children are denied their very fundamental right of the "childhood" i.e. to have sufficient time to play and rest, and existing facility for the education.

Finally, labour market is expected to be seriously affected by the pursuit of free trade regime coinciding with the policies of privatisation and structural adjustments. These set of policies, importantly, are being pursued without taking adequate safeguards and doing greater homework. They carry considerable risk of severely affecting domestic manufacturing, and employment and labour market conditions.

This paper makes an attempt to further elaborate these points and concerns in seven sections. This has been done in such a way that Section II discusses the existing situation of employment and unemployment. The issue of underemployment and poverty is discussed in Section III. Working conditions appear in Section IV, while child labour is briefly discussed in Section V. The other issues such as unions and labour laws are briefly touched in Section VI. The concluding remarks appear in Section VII.


I. Labour Force and Participation Rates

The labour force in Pakistan was estimated to be 34.74 Mn. in 1993-94, see Table 1. A relatively smaller labour force, however, is due to the fact that crude activity rate of the labour force is as low as 27.9 percent, see Table 2. Hence, the potential for a rise in activity rate and the size of labour force does exist should the phenomenon of "discouraged workers' hypothesis" especially prevailing amongst females subside and their participation is accurately accounted. The participation rate for males falling in the age-group of 24-54 years, however, is more than 94 percent.

It is also important to point out that children are also active in the labour market. As high as 16.8 percent of the boys and 6.9 percent of girls of the age-group of 10-14 participate in the labour. (3) The participation rate rises substantially for the children in the age-group of 15-19 years. Half of the boys and over one-tenth of girls of this age group are active in the labour market. This is an area of serious concern, and is discussed subsequently in this paper as well.

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