What unemployment?

13-09-2014 11:07 AM

Mervat Ayoub -Fady Labib

Is unemployment in Egypt the real demon it has constantly been made to appear throughout the last decades, and which successive Egyptian governments were accused of failing to address?

“Just give us the ‘young unemployed’, and we’ll provide the jobs.” This was the reply of Egyptian industrialists and businessmen to a demand by President Sisi that they should provide jobs for Egypt’s young unemployed. The reply was flabbergasting since it challenged a ‘myth’ propagated by official figures that place unemployment at over 13 per cent. The industrialists insisted that they found it hard to fill vacancies, let alone find the right person for the right job.
So is ‘unemployment’ in Egypt some political fiction that does not exist on the ground? Yet it has been a hot topic for the past few decades, and was intensively exploited on the political level to criticise the performance of governments before the Arab Spring uprising in January 2011. After the Arab Spring and the subsequent economic decline, unemployment undoubtedly rose since many businesses and industries had to close or downsize.
So what is the truth about unemployment in Egypt? A casual stroll through the streets any time of the day will show clusters of young men idling at coffee shops and Internet cafes. Are these young people really unable to find work, or are they waiting for some dream job to materialise? And if employers, employees, and unemployed are all suffering, what exactly is the ailment?

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The informal sector
Economists define unemployment as the situation where someone of working age is actively searching for employment but is unable to find work.
Abdel-Mutaleb Abdel-Hamid, professor of economics and former of Sadat Academy for Management Sciences, says that unemployment figures in Egypt are calculated by State agencies, mainly the Central Agency for Public Mobilisation and Statistics (CAPMAS). The agency calculates the numbers of those who are of working age and looking for work, and also the number of those who find jobs and join the workforce. But do these figures take into account those working in the informal sector of the economy? According to Dr Abdel-Hamid, they do not. The staggering unemployment figures, he says, are the result of many young Egyptians working in the informal sector. Unlike the other sectors of the economy—the government, public, investment, and private sectors—the informal sector is not included in official statistics, and those who work in it are thus counted among the unemployed. The informal sector, he says, makes upwards of one-third the regular economy and thus absorbs huge numbers of workers.
Dr Abdel-Hamid reminds that the political turmoil in Egypt following the 2011 Arab Spring uprising was the main factor that raised unemployment figures from 9.5 in 2011 to 13.3 per cent in 2014. Many factories had to shut down, and those which were lucky enough to remain open had to reduce production and lay off many workers in order to survive.
Today, Dr Abdel-Hamid says, it is not impossible to reduce unemployment figures, given the positive economic changes throughout the last months. The new mega projects launched by the government are expected to create some two million jobs.

To reduce the figures
For his part, renowned businessman Louis Bishara believes that the problem of unemployment in Egypt owes in large part to the high population growth. The young labour force pumped into the market every year cannot be absorbed by the government or public sector. In fact, he says, it poses a huge challenge to the private sector and even to the new mega projects, since new technology relies on modern machinery and robotics, and is thus not labour intensive.
If the target is to reduce unemployment figures, Dr Abdel-Hamid says, the government should adopt policies that would work in that direction. The target should be to push down the figure to 5 per cent, then further to 3 per cent. The State must set a clear strategy that would translate into policies, and regular reports should be issued to track the advances achieved.
“The government must adopt a new agenda that would promote self-employment and encourage young persons to establish medium, small and micro projects within the formal economy,” Dr Abdel-Hamid says. “As matters stand, young Egyptians long for a government job. For instance, when the Egyptian Tax Authority announced 19,000 job openings, 300,000 young men and women applied. But the absorptive capacity of the public sector is no more than 100,000 to150,000 per year. The total number of current jobs in both the government and public sector amounts to 6.5 million, many of them categorised as veiled unemployment.”

Distrust of private sector
Former Minister of Manpower and Migration Aisha Abdel-Hady denies there is an unemployment problem on the ground. She insists there are plenty of vacancies in the industrial sector, but young Egyptians are unwilling to take them.
In total agreement with Ms Abdel-Hady is Minister of Industry, Trade, and Investment Mounir Fakhry Abdel-Nour. Many young men, he says, cling to the old idea that nothing matches a government job. Mr Abdel-Nour says that a sizeable portion of jobseekers is reluctant to work in the private sector because of prevalent suspicions towards the employers. The young men believe that most private sector employers do not abide by the Labour Law; demand working hours that may go up to 12 or 15 hours a day; offer no adequate vacations, bonuses, nominal salaries or, most importantly, social security. They choose to spend their days idling around in the hope that they will eventually manage to find the much-sought-after government job. But other young Egyptians realise that the times of the secure government job are gone, and willingly go for a job in the private sector.
Mr Abdel-Nour stresses the utmost importance of building bridges of trust between the jobseekers and private employers and ensuring that they provide the benefits announced in the job advertisement. He also says that the cooperation between Egypt and the World Bank must focus on launching comprehensive training programmes to bring the skills of workers and employees up to the needs of the labour market.
In the same vein, Dr Abdel-Hamid says that the supply and demand of the labour market must be thoroughly taken into account when setting a new strategy for education in Egypt. Technical education and vocational training programmes must be made accessible to qualify graduates for the job market.

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Change of attitude required
“The problem in Egypt is not unemployment; the real problem lies in the ideas of many young graduates who insist on working in the field of their study,” says Nasser Bayan of the 10th of Ramadan Investors Association. “The Egyptian market does not have the capacity to integrate every university graduate in his or her field of study. For instance, the number of law school graduates every year in Egypt is almost 100,000, which highly exceeds the number of job openings for lawyers. It is therefore imperative to encourage young graduates to acquire additional skills which would help them find other work.”
“There is a high demand for skilled workers in most factories, but unfortunately very few apply for these jobs,” Mr Bayan says. “Instead of planning to attract new investments to solve the problem of unemployment, work must be done to change the attitude of the young towards taking jobs that are different from their field of study. Until this happens, the State’s efforts at attracting new investments will not solve the problem, it will just add to it. ”
The Ministry of Industry offers special courses to teach the young the new skills they need in the labour market. “Unfortunately these courses are not very popular despite their significance, which indicates the importance of changing the culture of society towards work,” Mr Bayan says. “Another solution to the unemployment problem might be to encourage the young generation to establish small projects using bank financing. This strategy has already been put into action and must be encouraged and expanded.”

No job security?
Mr Bayan attaches little importance to the idea that many young Egyptians are reluctant to work in the private sector because of lack of job security.
“In Egypt, 90 per cent of the private sector is part of the investment sector, and this has to abide by the Labour Law that grants employees their basic rights such as insurance and protects them against layoff. This makes it a secure working environment, and consequently it makes absolutely no sense for young people to refuse to work in the private sector and long for a job in the government,” he says.
Sociology professor Ali Taha believes that the only explanation for young people’s refusal to work in the private sector is that most are underqualified and have totally unrealistic dreams and aspirations. “They look for a top management job in a comfortable working environment, and forget that this can only be found in the private sector, not in the government. They must understand that the private sector allows for faster upward mobility through the job hierarchy than the government. There needs to be a total change in young people’s ideas so that they abandon their misconceptions and start joining the private sector.”

Tailored self-employment
Hoda Badreddin, a human development expert, believes that the violations by some private employers owe to the lack of government supervision. “A study conducted on employees in garment stores,” she says, “showed that they received a monthly salary of EGP1000 in addition to a similar amount in bonuses, which constitutes a good take-home pay in Egypt. But their employers do not offer them insurance and often force them to work extra hours without compensation. Employees are demanding increased government supervision and the activation of the Labour Law to protect them from unfair dismissal.”
Not everyone, however, believes the problem is the quality of employment in public or private enterprise. A young social worker who preferred to have her name withheld told Watani that her work with young people revealed that young men are eager for work neither for the government nor the private sector. The trend is to be self-employed in such informal work as street vending or driving a tuk-tuk. Such jobs, she says, are convenient because the working hours are flexible and can be geared towards a person’s preferences or conditions. Usually, once a young man collects a decent sum of money, he rests on his laurels for several days until the need for money arises again.
As though in proof of point, Minister of Manpower Nahed al-Ashri recently said in a youth conference that the Ministry had announced 79,000 vacancies in various fields including human resources, business administration, and accounting; and found no one to fill them. The jobs, she said, paid anywhere between EGP2200 and EGP3500, considered on the high end for low experience jobs in Egypt. In one case, Ms Ashri said, the young man she interviewed for a EGP2200 job in the ministry declined on grounds that it didn’t “suit him”.

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Women as breadwinners
So how do families fare if the male members prefer to remain idle till the ‘right’ job comes up? The condition has led to a situation entirely new to the Egyptian community; the women of the family have become the breadwinners. It’s not that Egyptian women are foreign to supporting their families; they have always worked alongside their men or when the men were sick or disabled or no longer there. The new situation is that the women work while their [able] men idle around.
Recent statistics by the National Centre for Sociological and Criminological Research revealed that the percentage of female-headed households in Egypt has reached 34 per cent. Zeinab Afifi, Secretary-General of the National Council for Women (NCW), says the proportion increases in Lower Egypt and Cairo, especially in slum areas.
Women have no problem finding work; they have no qualms about accepting any job once they need to support their families and, according to the industrialist Louis Bishara, are more dedicated and committed workers so employers frequently prefer them to men.
Female breadwinners, however, frequently face the problem of being underpaid and deprived of any form of social and health insurance since, in the majority of cases, they work in the informal economy. In this regard, the NCW and a number of NGOs have been running programmes to help women in female-headed households acquire ID cards and file for social insurance and aid, as well as to teach them literacy when needed and skills required on the labour market. And God knows they need it; a recent study by the Health Ministry revealed that some 20 per cent of women who head households suffer from various illnesses, and that 38 per cent of their children are forced out of school and into the labour market to help their families.

Watani International
10 September 2014


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