Pakistan’s Unemployment Rate Hits 7.1% as Average Wages Surge

The Pakistan Bureau of Statistics (PBS) released its latest Labor Force Survey yesterday, revealing a challenging shift in the country’s job market. Pakistan’s unemployment rate has climbed to 7.1% over the past four years. This marks a notable rise from the 6.3% recorded during the 2020-21 period.

According to the new data, approximately 8 million Pakistanis are currently unemployed. This reflects a 0.8 percentage point increase in the jobless rate over the last five years. Interestingly, the PBS collected this data online for the first time, highlighting a modernisation in their reporting methods.

Pakistan’s total population currently stands at 241.5 million. Within this demographic, the labour force comprises over 77.2 million people. While 43% of the population is of working age, a significant 53.8% remains inactive.

The services sector continues to drive employment. It remains the largest employer, absorbing 41.7% of the workforce, which translates to 31.8 million people. Agriculture follows, employing 33.1% (25.5 million), while the industry sector accounts for 25.7% (19.9 million).

However, the landscape is shifting. The survey notes a distinct decline in the share of workers within the agricultural sector. Despite this, the economy has generated jobs. Over the past four years, nearly 10 million people found employment annually, with participation rates rising for both men and women.

While Pakistan’s unemployment rate has risen, average wages have also seen a sharp increase. The average monthly wage now stands at Rs. 39,042. This is a significant jump of Rs. 15,014 from the Rs. 24,028 recorded in 2020-21.

Despite these gains, income disparity persists. Men earn an average of Rs. 39,302 per month, whereas women earn Rs. 37,347.

The report highlights that the informal sector still dominates Pakistan’s economy, accounting for 72.1% of the workforce. In contrast, formal sector employment makes up only 27.9%. 73% of all working men and 66% of all working women are in the informal sector.

Looking ahead, the government is focused on economic reforms. Chief Statistician Dr. Naeem-ul-Zafar stated that the government is on track to meet key International Monetary Fund (IMF) requirements by the end of 2025. This Labor Force Survey, along with a livestock census and an upcoming household income survey, forms a crucial part of this reform agenda.