Asia’s Jobless Boom

The Economist writes:

Young Asians are already struggling to find jobs. Those between the ages of 15 and 24 make up a fifth of the workforce, but half the unemployed. In Sri Lanka, younger workers are six times more likely to be unemployed than older ones.

Asia’s growth, in other words, is simply not creating enough jobs: and not only is the ratio of employment growth to economic growth low, but it also appears to be falling pretty much across the board. This may seem odd. In countries where labour is cheap, growth should be more labour-intensive than capital-intensive. But in Asia, argue Jesus Felipe and Rana Hassan, the authors of the ADB’s report, modern, export-oriented firms, which have underpinned much of the recent growth, are likely to use the same technology as their first-world counterparts. That may explain why, in 2000, the number of jobs created in China for each unit of economic growth was less than a quarter of what it was in 1990. Only subsistence farming and simple urban services are highly labour-intensive, and these are not thriving industries.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.