1. Analysis of the Egyptian Labour Market with a Special Focus on MDG Employment Indicators Dr. Magued Osman

2. Contents  Introduction  MDG Employment Indicators  Challenges and the Way Ahead

3. Introduction  The 1990’s, the IMF supported economic and fiscal reforms lifted Egypt’s growth profile to a 4.3% average GDP growth rate. However, unemployment remained high at an average 9.4% over the decade.  Starting mid-2004, a wide-ranging programme of economic reforms and a favorable external economic environment have contributed to relatively high economic growth rates in subsequent years; with an average annual growth rate of 6.4 per cent from 2005- 2008.  GDP growth dropped to 4.7 per cent in 2009 following the of the global economic crisis.  The growth surge lead to rapid employment growth and the decline of the unemployment rate from 11.3% in 2005 to 8.7% in 2008.1

4. Introduction  The 25 of January revolution lead to a sharp drop in economic growth from 5.1% in 2010 to 1.8% in 2011, and remained low at 2.0% in 2012.  As a result, the economy was not able to absorb new entrants to the labour market, and consequently unemployment rate continued to increase to reach 12.7 per cent in 2012, highlighting structural economic challenges that need to be addressed.

5. MDG Employment Indicators

6. Employment-to-Population Ratio  The number of people in employment as a percentage of the population for the corresponding age group and sex.  The employment-to population ratio typically falls between 50 – 75 percent, with a lower ratio for females compared males in most countries.

8. Unemployment Rate  Sluggish economic performance since the January 25 Revolution and a difficult transitional period have lead unemployment to jump from 9% in 2010 to 12.7% in 2012.  In the last quarter of 2012, the unemployment rate hit 13% compared to the preceding quarter where it stood at 12.5% according to CAPMAS. Which shows that 162 thousand Egyptians lost their jobs in the last 4 months of 2012.

9. Women and Unemployment  Higher unemployment rates for women compared to men.  In 2011, unemployment for females amounted to 22.7% compared to 8.9% for males according to CAPMAS.  This increased to 24.2% for females in 2012, compared to 9.3% for males.  This gender gap is even more extreme among youth where unemployment reached 44.6% of female youth, compared to 18.7% for male youth in 2011.

10. Youth Unemployment  74% of total employment in Egypt in 2012 were youth aged between 15 and 29 years.  In 2011, almost one in four youth were unemployed.

11. Unemployment by Educational Attainment

12. Labour Force Participation  The labour force participation rate measures the proportion of a country's working- age population that engages actively in the labour market; either by working (employed) or looking for work (unemployed).

13. Youth Labour Force Participation  The youth labour force participation rate reached 33.9 % in Egypt compared to the regional average of 33.4% in North Africa, and 48.5 % on the global level in 2012.  The persistent gender gap is also clear in the labour force participation rate for youth; where the female participation rate is almost half the male rate in Egypt.

14. Vulnerable Employment Rate  Vulnerable employment is calculated as the sum of contributing family workers and own-account workers as a percentage of total employment of the relevant group.  The two groups that constitute vulnerable employment in Egypt are showing different patterns in the labour market.  Contributing family workers as a share of all employment declined by 0.6 percentage points between 2000 and 2010, while the share of own-account workers rose by 0.8 percentage points.

16. Working Poverty  The working poverty rate is the proportion of working poor in total employment; where working poor are defined as employed persons living in a household whose members are estimated to be below the poverty line.  The inability of employment to lift families above the poverty line.

17. Working Poverty  In Egypt, getting a job does not necessarily keep workers above the poverty line. Before the revolution, the minimum wage in the public sector was estimated at $1.67 per day ($50 per month), which is higher than the international poverty line at $1.25 per day, yet lower than the threshold of $2 per day.  After the revolution, the public sector minimum wage was raised to $3.5 per day ($107 per month) in an attempt to lift Egyptian working class out of poverty, however this new wage structure turns to be inadequate against the increasing cost of everyday necessities, and workers are still trapped in poverty.

18. Labour Productivity  Labour productivity represents the amount of output achieved per unit of labour input. It is used to assess the likelihood that an economic environment creates and sustains decent employment opportunities with fair and equitable remuneration.  Linkages between labour productivity, vulnerable employment and working poverty.  Productivity increases obtained through investment, trade, technological progress or changes in work organization can lead to increases in social protection and poverty reduction, and would in turn have the potential to reduce vulnerable employment and working poverty.

19. Labour Productivity

20. Share of Women in Wage Employment in the Non-Agricultural Sector  This indicator expresses share of female workers in wage employment in the non-agricultural sector as a percentage of total wage employment in this sector.  It shows the degree to which labour markets are open to women in industry and services sectors, and thus reflects the ability of the economy in creating an environment that promotes decent and productive work for women.

21. Share of Women in Wage Employment in the Non-Agricultural Sector  The share of women in wage employment in the non-agricultural sector has been fluctuating during the period 2000 - 2008.  It increased from 16.2% in 2000 to 18.5% in 2002, and then continued to decline the following years with the exception of 2007.  This indicator shows the necessity for policies and action to increase employment opportunities for women to encourage women empowerment and influence poverty reduction.

22. Challenges and Way Ahead

23. Challenges  Unemployment and quality of employment for women and youth.  Lower employment opportunities for those with higher educational attainment. Social repercussions, disincentive for education and economic consequences.  Informal and vulnerable employment.  Social and political instability.  ILO blacklist and worker freedom standards.

24. Way Ahead  New economic vision based on inclusive growth and social justice.  Focus not just on job creation but job quality. Try to decrease working poverty rates, and increase productive employment.  Female empowerment and promoting gender equality in employment opportunities.  The role of the private sector and creating jobs that will absorb and encourage the educated youth.  Regulatory and Institutional Reforms.  Modifying legislation to conform with international agreements.  Social Stability, Economic Growth.