Data on employment misleading

Cited as the unfortunate link between its citizens and increasing poverty levels, the national debt burden and radicalisation, -unemployment has long been a concern many developing countries are trying to address.

The tangible successes, however, have remained somewhat elusive.
I have cited these statistics so many times that my readers must know them off the top of their heads by now. Youth on the continent are hardest hit by unemployment, and as a consequence more vulnerable to being taken advantage of.

From 12 percent in 2006, Kenya’s unemployment rate is currently estimated to stand at 40 percent. However, while the youth count for 35 percent of the country’s population, they account for over 66 percent of the country’s unemployed workforce.

In July last year, I met former US President James Carter, who was also awarded the 2002 Nobel Peace Prize for, among others, his work in promoting economic development and combating unemployment. During his presidency, his administration was credited with creating eight million jobs.

During a question and answer session, I asked him how developing nations should tackle youth unemployment. His answer was two pronged. One, education. He emphasised that learning should not just be academic or in the classroom but more encompassing, including making education systems more responsive to the modern world’s changing needs.

Second, he emphasised the need for the government to invest in infrastructure. Not only would it create employment while setting the stage for development, it would ensure that the youth were benefitting from skills transfer. On both counts, we are significantly far off the mark. Though primary education is now free and the 8-4-4 system being restructured, it is still too early to judge efficacy. But I will give credit where it is due; it is the right trajectory if we could now focus on measuring the impact and continually improving both delivery and the end result. On infrastructure though, we have not got the skills transfer right.

I have written about this before, about the Chinese culture of only hiring local low level skills and as much as is humanely possible, mystifying the most critical skills as much as possible.

This increases reliance on the East, so that in the future if we embark on a similar infrastructure project to the ones they have undertaken we will be left with no choice but to engage them again, a fact I am sure they are all too aware of but one that our decision makers seem to either be blind to or apathetic towards.

I recently came across the Kenya National Bureau of Statistics (KNBS) 2015 numbers and was particularly drawn towards the job creation statistics. But like the previous years, the numbers hide a multitude of misconceptions; the problem with a lot of the data that we are presented with.

It is reported that within the East African region, Kenya has the highest number of jobs created in the informal sector. Great news so far, we could even go as far as to surmise that this is testament to our resourcefulness and initiative.
But let us unpack the numbers. In 2015, the total number of jobs created totalled 841,600 comprising 128,000 in the formal sector and the balance of 731,000 in the informal sector (85 percent).

And this sounds like great news, at first. The informal sector in Kenya is described as trade whose barriers to entry and exit are low, and those using little to no technology. This sector is also largely unregulated by the government and comprises mostly retailers, hawkers, boda boda riders, jua kali artisans and other small service providers. A report by the United Nations’ Economic Commission for Africa (UNECA) states that most of these workers operate under informal and vulnerable conditions, resulting in small and unpredictable incomes.

This informality and lack of regulation (for example regarding minimum wages) is likely to trap its participants into a cycle of poverty.
A vital statistic missing from the KNBS data is how much income these 731,000 are drawing or contributing to the country’s economy.
Merely posting the en masse numbers without visibility into whether these jobs being created are enough to actually uplift the quality of life of the people presents an unbalanced and even worse, optimistically myopic view.

I once watched a video profiling different jua kali artisans. Their monthly revenue ranged from a low of Sh15,000 to Sh21,000. At this level of contribution to the country’s GDP the numbers are inconsequential in changing the economic trajectory of the country.

Informal sector activities have so far been largely ignored by policy setting, preventing the sector from providing good quality jobs that have more stability and less volatility regarding income generation. Yet this sector has for many years now been providing employment to over 80 percent of workers.

I’m now watching, hawk-eyed, to see if any of the campaign plans will include a concrete plan addressing Kenya’s unemployment. You should too.