When analyzing Jordan’s unemployment problem, some tend to place the
blame on the labor force itself, especially university graduates. The pundits
claim that academic training (understood by most to mean type of degrees or
academic specializations) acquired by Jordan’s youth does not match the market
demand, which may be true, but not for the typically claimed reasons.
اضافة اعلان
To illustrate, one
often hears the statement that there are too many engineering graduates every
year, yet the market for engineers has a glut and, consequently, unemployment
among engineers continues to grow; thus, unemployment is caused by a mismatch
between degrees and market demand.
Few, however,
address the quality of the training or schooling received as a reason for not
hiring recent graduates, regardless of the field of study. It is widely
recognized that the three most important skills (critical thinking,
communication, and team work) are not taught at most universities and public
schools in Jordan. In actual fact, it is the quality of education, not the type
of education, which makes employing these graduates less attractive to
employers.
Nevertheless, the
mismatch argument has gained popularity in recent years. The mismatch argument
brings to mind the culture of shame argument (CSA), which was launched in the
mid-1990s and went on to dominate the unemployment discourse for over two
decades — some still use it, even though it has eventually died down.
CSA claimed that
Jordanians refused to work in several professions because of excess of pride.
Others could do these jobs, but Jordanians would be ashamed to do them. Hence,
they were voluntarily unemployed, and consequently, unemployment rates were
high. Of course, a policy maker could do nothing to employ such a proud
workforce.
Unquestionably,
there was no researched proof or empirical evidence that justified such an
argument. Nonetheless, it was popular among government officials and their
pundits because it shifted the responsibility for the rising unemployment from
the government to the governed.
Some employers saw
in it a suitable rationalization for their hiring preferences: cheaper,
informal foreign labor. Even the labor force, especially the youths
anticipating a government desk job, saw in it an apt validation for their
refusal to work. Such a win-win-win unsubstantiated claim became everybody’s
darling.
Note that both
arguments place the burden of unemployment on the labor force. Disregarded are
the roles of the public and private sectors. Never mind that the public sector
could have reduced its appetite for labor over the past few decades and thus
would have helped nudge and shift the demand for jobs more toward the private
sector. Moreover, so many negatively impacting policies could have changed to
improve the situation, such as the removal of market segmentation and ad hoc
ordinances, among others.
As for the private
sector, there is ample room for improvement. It is dominated by small firms
which make up over 96 percent of enterprises. They employ 60 percent of the
labor force, and contribute 24 percent of GDP — compared to 70-80 percent in a
developed economy.
For the labor situation to change, the private sector must grow and thrive to attract Jordanians away from government employment opportunities…
Also, Jordan
suffers from the “missing middle” — lack of semi-skilled workers. There are few
medium-size firms and small firms do not grow into medium sized due to, among
other things, lack of access to formal financing, which in turn encourages the
growth of informality.
Furthermore, not
only does the private sector not create enough jobs, it does not create enough
high-quality jobs, and even when the odd firm seeks highly skilled workers, it
may have a hard time finding them as the best and brightest have moved to the
Gulf countries.
Promising sectors
such as ICT, pharmaceuticals, and health tourism, having challenges in terms of
upscaling, tend to move to places like Dubai, and recently Saudi Arabia, where
hindrances are fewer and markets are larger.
Startups create very few informal jobs and
face many obstacles. The majority are established not out of rushes of
ingenuity but out of the necessity of securing a livelihood.
Jordan is a small
open economy that is heavily dependent in the public sector in terms of job
creation. For the labor situation to change, the private sector must grow and
thrive to attract Jordanians away from government employment opportunities, as
a solitary or most viable option, to a higher pay, greater learning, skill and
personal growth in the private sector.
Slogans and
excuses only numb the drive to come up with solutions.
The writer is CEO of the Envision Consulting Group and
former minister of state for economic affairs.
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