Is working a privilege in the Middle East & North Africa? Who is most affected by MENA’s Joblessness Trap?
This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs.
Like many of my colleagues, I have now spent several years trying to understand the reality of labor markets in MENA, especially for young people. Looking back over the research involved to define labor market dynamics for the whole region, a focus group with young Moroccans about their work as informal street venders in Casablanca comes to mind. None of them considered what they did a “real job”. Their work was rarely rewarding, was risky, often persecuted by the police, and, more importantly from their standpoint, it did not provide them with the means to propose to a girl, let alone to start a family.
Yet they could not find anything better.
They had no faith in education, which they had abandoned long ago, as a path to a good job, and claimed that better and more stable positions were only available to upper middle class kids, backed by wealth and the right connections.
I learned many valuable lessons from this conversation. The first is that jobs provide much more than a livelihood. They are also critical for achieving many of life’s milestones, such as forming one’s own family, and are a vital source of social recognition and the sense of self worth that goes along with it.
It was also clear that the quality of available jobs is as important as their quantity. Street vending is not only risky and badly paid, but frustrating, and on a mass scale, this frustration translates into social instability. However, in MENA, good quality jobs are a privilege that continues to be out of reach for the majority of the population.
Much like the young Moroccans, the large majority of workers in the region’s low and middle income countries have informal jobs, which pay little, provide low returns to one’s education, and very rarely constitute a platform to better employment in the future, like forming thriving enterprises. On the other hand, the few desirable jobs in the economy – those with social protection or above-average earning - continue to be provided mostly by the state, and mostly to middle-age males at the expense of younger workers and women.
(Click to Enlarge Chart Images)
What makes things harder is that these stark differentials across workers tend to persist. In short, MENA labor markets suffer from a mobility deficit. Those who hold a good job keep it nearly forever, those in a precarious job hardly move into a better one. Residents of regions with high unemployment lack the means to move to places where labor demand is stronger, thus maintaining strong rural urban divides. Individuals with the same levels of education end up earning very different salaries, depending whether they work in the public or in the mostly informal private sector, but rigid rules prevent workers to flow across these sectors and to even out these disparities.
However, what surprised us at a closer look was to see that while protected or well paid jobs are few and persistent, most families tend to have at least one worker with such a job; probably this allocation allowed appeasing the explosive situation for quite some time, but at the same time it reinforced a social model centered around the male breadwinner – a model now crumbling under the weight of the demographic boom.
Perhaps, though, what would stand out most in a bird’s eye look of labor markets in MENA is the sheer number of working age individuals who are not employed, a vast well of untapped human resources.
Three out of four working-age women still do not participate in the labor force, and constitute 80–90 percent of MENA’s inactive population. These rates have not improved substantially in spite of improving educational achievement for women, and of a decade of sustained economic growth right up until the recent financial crisis. In addition, an alarmingly large number of young people are neither in school nor at work, and in many countries most of them are actually out of the labor force. Thus, the much-discussed youth unemployment rates of the MENA region, the world’s highest, grossly underestimate the extent of ‘joblessness’, because they only include those actively seeking work.
What I mostly gathered from my encounters was the frustration of not having any clue of how one could turn hard work and talent into success. I remember a 24 year-old woman from Tangier recounting how she went to law school, with the support and sacrifice of her poor family, only to find out at the end that her degree was no help in getting her a job.
Public sector jobs in some countries have become so rare, and so coveted, that only those from top institutions, or the most connected, can credibly aspire to them. When searching for work in private companies, she learned her degree had little value, and rather that what employers wanted were French language and computer skills, or, in some instances, her willingness to be in workplaces where her safety as a woman was at risk.
Above all, she struggled at explaining to her mostly illiterate family members why all those years of education had not led her to a better life than their own. And, in fact, the reasons for this inefficient and inequitable distribution of opportunities are complex, and rooted in the economic history and political economy of the region. Understanding them requires exploring a number of factors at play: why are educated young people no longer able to enter the middle class track as their parents could? Why did economic growth fail to translate into broader benefits for the majority of the population in the Middle East and North Africa, compared to many economies in Asia, or in a country like Turkey? Why are the few available good jobs allocated mostly to older males, at the expense of young people and women? Why is the formal private sector employing such a small share of the working population?
This blog is part of a weekly series that we hope will provide some food for thought on these critical questions, based on our latest data and research. The common thread and objective of these blogs is to spur a conversation on “what to tell your Finance Minister”, in preparation for the World Bank Annual Meetings in October 2012. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.
This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs. The common thread and objective of these blogs are to spur a conversation on “what to tell your Finance Minister.” This is in preparation for the World Bank Annual Meetings in October 2012, where the report's main messages and the results of the live chat will be presented to MENA policy makers. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.
Read the previous week's blog in the series: