On the concert economy | Bis

ave Pakistani labor market dynamics changed irreversibly for highly educated youth? Until recently, it was the public sector that educated young people sought coveted jobs because of job security, “not too demanding working conditions” and post-retirement benefits. It seems that the situation has changed. Lately, highly educated young people are considering careers in the private sector. This shift may well be inspired not so much by supply-side factors as by demand-side factors.

There is a huge lag between the jobs created in the economy and the growth in the labor force each year. According to Pakistan Economic Survey 2020-2021, 1.96 million students were enrolled in 218 universities. For simplicity, assume that these are undergraduate programs consisting of eight semesters, and that one-eighth of students (about 245,000) join the workforce each year. A recent labor force survey suggests that 1.61 million jobs were added to the economy in 2020-21, of which 450,000 were created in urban areas. Let us further assume that the share of good quality jobs in the newly created employment pool is proportional to the share of university graduates in the education sector, or about 4.43%. This translates into the creation of 19,935 highly paid jobs for 245,000 new university graduates. In other words, 92% of new university graduates remain unemployed for this year at least. It’s mortifying.

Moreover, sometimes the conditions of employment available in the private sector are very unfavorable to the interests of the employees. It is not uncommon to find university graduates working for Rs 20,000, which is even lower than the legal minimum wage.

Why might less-educated young people seeking public service jobs also be motivated by supply-side factors? The growth of the online job market has created a wide variety of jobs, including freelance and remote jobs. But other factors may have played their part. Over time, patterns of work-life balance have undergone significant changes. Only a few people in regular employment can be satisfied with what they are doing. Most people have to constantly strive to diversify their sources of income, including investing in real estate, trying their luck in the stock market, starting small online and offline business ventures, moonlighting or freelance. Does such a shift in work preferences stem from a massive increase in the cost of basic necessities? a continued decline in permanent jobs with guaranteed pension and post-retirement benefits; or has a consumer culture outgrown the popular imagination?

Just as the internet has created new job opportunities, it has also created new soft skills, including motivational speakers and ubiquitous influencers. Motivational speakers come in many varieties: some have appropriate training and the expertise to guide people; many more have their cookbook recipes improvised to provide simplistic answers to complicated questions. Still others do motivation for motivation’s sake. In doing so, they deceive the public. Motivational speakers regularly tell their puzzled audience stories of online workers making big fortunes overnight. Outliers inspire but the median best represents the reality on the ground.

Because correct information is essential to making an informed decision about one’s future, it is essential to keep a close eye on the advice that motivational speakers give to young people. This is important because the motivational speaking industry is very loosely regulated and there is little accountability for consequences.

It is important for the younger generation to clearly understand the opportunities and challenges of the online job market. Like a real economy, the gig economy can have business cycles. It can also be sensitive to developments in traditional sectors. A recession in some economies can reduce people’s purchasing power. This in turn may reduce their demand for certain services provided by freelancers. So online and offline activities no longer run parallel to each other, they are often intertwined.

Social media and freelance platforms have made it possible to enter the job market with any skill (some TikTokers have become famous for the sole reason that the originality of their swear words). This raised many questions about the need for formal education as opposed to learning practical skills to earn a quick buck. One of the favorite tips offered by many motivational speakers for the uninitiated is to learn Canva for logo design.

Just as a suboptimal education in a traditional setting can disadvantage individuals throughout their working lives, the lack of proper training and education can also disadvantage them in the online world. The lure of making money online is very compelling for young people who idealize income by creating video content for platforms like TikTok and YouTube. While it’s hard to deny the legitimacy of the showbiz profession, if the years of life that would be best spent achieving a quality education are wasted creating mindless online content, it can have a long-term negative impact on the economy and people’s lives.

It is important for the younger generation to clearly understand the opportunities and challenges of the online job market. Like a real economy, the gig economy can have business cycles. It can also be sensitive to developments in traditional sectors. A recession in some economies can reduce people’s purchasing power. This in turn may reduce their demand for certain services provided by freelancers. Thus, online and offline activities no longer run parallel to each other, they are often intertwined.

Let’s look at some online opportunities and how Pakistanis have taken advantage of them. Pakistanis have on the whole done a good job in the online market. According to recent estimates, Pakistanis provide 14.7% of services in the global online freelancing market. Considering that the share of Pakistani population in the world population is 2.7%, Pakistan’s contribution to the online economy is five times greater than the share of its population. This speaks to the resilience of Pakistan’s educated youth. The government must support the online community in a big way. This can take the form of an online payment system such as PayPal and tax clarification. The government can also devise a strategy to smooth the consumption of the freelance industry when the demand for freelance work declines. This could be done by creating pension funds for the self-employed.

While Pakistan’s share of the global online market is 14.7%, the share of Pakistanis in the total global online market income is unclear. However, some statistics are sobering. According to recent government estimates, Pakistan’s online community has earned around $0.5 billion from freelancing. Given that Pakistan’s GDP was estimated at $346 billion in 2021, half a billion from freelancing is only 0.15% of GDP.

Some other catches become apparent when critically examining the data. A breakdown of online jobs shows that Pakistan’s share of online services is 22.2% in the writing and translation work category, followed by the professional services category (18.4%), data and clerical entry (16.7%), software development. and technology (12.2%), creative and multimedia (10.6%) and sales and marketing support (7.9%). The data also shows that around 33% of online freelancing work done by Asian workers falls into the category of software development and technology, but in Europe, 64% of freelancers provide services related to software development and to technology. At first glance, most well-paid jobs in the online market are filled by Europeans.

India’s share of global jobs in software development and technology is 26.8%. However, the comparison between India and other developed countries is no less revealing. share of global workforce in software development and technology ranges from 0.2% in France, 0.5% in China, 1% in Germany, 1.6% in Canada, 2.5% in the United Kingdom and 3.7% in the United States. It may have specific explanations. First, the returns to software development and technology-related jobs are so low for workers in developed economies that they feel their efforts are not worthwhile. Second, the distribution of jobs may depend on the complexity of the job. Relatively simple tasks with unattractive price tags can be assigned to workers from developing countries, and more complex high-end jobs can be assigned to experts from the developed world. Third, even some highly skilled jobs requiring a high level of expertise are outsourced to workers from developing countries due to significantly lower labor costs.

An important takeaway from the previous discussion is that despite Pakistan’s large number of freelancers and a rosy image (Pakistan being the fourth fastest growing economy for freelancers (47%), online jobs are not a milk-and-honey proposition Young people need to learn About 45% of freelancers in the United States have a postgraduate degree 70% of full-time freelancers regularly attend job training How lucky is there for semi-skilled freelancers to win lucrative projects when freelance markets are dominated by highly-skilled labor There are also other challenges The sedentary lifestyle of freelancers is associated with increased risks for health, including cardiovascular disease, anxiety, depression and negativity, social isolation and disorientation that regularly accompany working late and losing contact. with the biological clock. Freelancing also has a social cost. Over 60% of freelancers worldwide believe that there is a general lack of respect for the work of freelancers and the freelance community.

Even though the government feels comfortable with the fact that fewer people are now seeking government jobs, it still has a responsibility to guide young people to contribute meaningfully to the national and international economy according to the best of their potential.

The author holds a PhD in Economics and is an Associate Professor in the Department of Economics, COMSATS University Islamabad, Lahore Campus. It can be attached to rafi.amiruddin @gmail.com

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