Growth Without Jobs
20 February 2015
Read by 2064 persons
Only stronger, job-creating growth would make a real unemployment policy possible. Calculations show that the growth rate needed to absorb the accumulated unemployment is out of reach.
Consumption is present, investment is booming at 30% of GDP, the budget deficit is shrinking, inflation is down, interest rates are low, but... unemployment is rising. The national rate is nearing 10%. The number of unemployed has increased by 86,000. The Moroccan economy has created only 21,000 net jobs... Job losses are at their peak: industry and crafts have lost 37,000 jobs. The activity rate of the population has fallen. 2014 was a gloomy year; such a deterioration in the labor market may not have occurred for years. Economic growth forecasts for 2015 have just been revised upwards: more than 4.8% compared to 2.8% in 2014. Would this be enough to improve the labor market situation? Not certain. Growth is becoming less and less job-creating. Certainly, since 2001, the Moroccan economy has experienced a new growth plateau reaching 4.7% per year, which has generated 1.7 million net jobs, thus reducing the unemployment rate to 9.5% in 2013 from 12.3% in 2001. However, the job content of economic growth has slowed significantly.
How can we explain the lack of jobs created by economic growth in Morocco? First of all, the unemployment rate follows the pattern of the demographic transition. On average (between 2007 and 2013), each point of growth resulted in the creation of nearly 24,000 jobs. This creation rate is insufficient to induce a significant reduction in unemployment in the medium term. During the same period, the active population aged 15 and over increased by nearly 67,000 on average annually. The prospects for the labor market emerging in the light of demographic growth suggest a further sharp increase in the active population due to the development of female activity. Secondly, the determining factors for maintaining a low unemployment rate seem to be the pace and stability of the growth rate. However, in our country, growth volatility is still present, even if it has lessened over the last decade. Furthermore, if stable growth is accompanied by changes in productivity gains, employment volume should only increase moderately. A third observation shows that education and training policies have not kept their promises. Faced with changes in the productive apparatus, a gap has emerged between the training needs of businesses and the training of the workforce. The global approach to matching supply and demand for training overlooks the difficulties, both nationally and at the company level, of accurately assessing training needs. A fourth observation draws attention to the role played by sectoral restructurings of economic activity: the modernization of our socio-productive system can generate job losses. The ongoing changes in businesses, dictated by new competitive constraints, necessarily involve new production and organization methods that favor the use of more qualified and flexible employment. A fifth observation concerns the rather disappointing results of employment policy. Beyond its many shifts, this policy has pursued two major objectives: the first is the integration of disadvantaged active categories into the labor market, primarily young people, and the second is the encouragement of investment and business creation. The insertion schemes put in place have revealed variable effectiveness in relation to the rise in unemployment. Displacement effects have reduced the impact of training/adaptation/retraining programs for unemployed graduates. Measures favorable to young entrepreneurs and the encouragement of start-up creation have had little effect. It is essential to systematically and rigorously evaluate the effects of these "layers" of the schemes implemented over time.
Diagrammatically, to combat unemployment, two complementary rather than opposing approaches are conceivable: work sharing and growth. In Morocco, the issue cannot be solved by sharing work. Sharing is easier when incomes are high and rising, and this would avoid raising the issue of sharing as it is too often done, namely the sharing between those who already have little (the minimum wage, for example, which some would like to reduce), as if the problem of inequalities were to be solved between "poor" people. Only stronger, job-creating growth would facilitate the implementation of a real policy to combat unemployment. Calculations show that the growth rate necessary to absorb the accumulated stock of unemployed is out of reach. Furthermore, a growth rate cannot be decreed, and the regional environment does not allow for significant positive spillover effects on national growth. However, if it were possible to move from 5% to 6% growth, it would certainly make things easier. Hence the need to explore available margins. These are undoubtedly the elements of a new development model that would generate a sufficient rate of economic growth to absorb the growing supply of labor that needs to be invented.
Larabi Jaïdi.
Lavieeco.com
Published February 18, 2015.
Posted online February 20, 2015.
Consumption is present, investment is booming at 30% of GDP, the budget deficit is shrinking, inflation is down, interest rates are low, but... unemployment is rising. The national rate is nearing 10%. The number of unemployed has increased by 86,000. The Moroccan economy has created only 21,000 net jobs... Job losses are at their peak: industry and crafts have lost 37,000 jobs. The activity rate of the population has fallen. 2014 was a gloomy year; such a deterioration in the labor market may not have occurred for years. Economic growth forecasts for 2015 have just been revised upwards: more than 4.8% compared to 2.8% in 2014. Would this be enough to improve the labor market situation? Not certain. Growth is becoming less and less job-creating. Certainly, since 2001, the Moroccan economy has experienced a new growth plateau reaching 4.7% per year, which has generated 1.7 million net jobs, thus reducing the unemployment rate to 9.5% in 2013 from 12.3% in 2001. However, the job content of economic growth has slowed significantly.
How can we explain the lack of jobs created by economic growth in Morocco? First of all, the unemployment rate follows the pattern of the demographic transition. On average (between 2007 and 2013), each point of growth resulted in the creation of nearly 24,000 jobs. This creation rate is insufficient to induce a significant reduction in unemployment in the medium term. During the same period, the active population aged 15 and over increased by nearly 67,000 on average annually. The prospects for the labor market emerging in the light of demographic growth suggest a further sharp increase in the active population due to the development of female activity. Secondly, the determining factors for maintaining a low unemployment rate seem to be the pace and stability of the growth rate. However, in our country, growth volatility is still present, even if it has lessened over the last decade. Furthermore, if stable growth is accompanied by changes in productivity gains, employment volume should only increase moderately. A third observation shows that education and training policies have not kept their promises. Faced with changes in the productive apparatus, a gap has emerged between the training needs of businesses and the training of the workforce. The global approach to matching supply and demand for training overlooks the difficulties, both nationally and at the company level, of accurately assessing training needs. A fourth observation draws attention to the role played by sectoral restructurings of economic activity: the modernization of our socio-productive system can generate job losses. The ongoing changes in businesses, dictated by new competitive constraints, necessarily involve new production and organization methods that favor the use of more qualified and flexible employment. A fifth observation concerns the rather disappointing results of employment policy. Beyond its many shifts, this policy has pursued two major objectives: the first is the integration of disadvantaged active categories into the labor market, primarily young people, and the second is the encouragement of investment and business creation. The insertion schemes put in place have revealed variable effectiveness in relation to the rise in unemployment. Displacement effects have reduced the impact of training/adaptation/retraining programs for unemployed graduates. Measures favorable to young entrepreneurs and the encouragement of start-up creation have had little effect. It is essential to systematically and rigorously evaluate the effects of these "layers" of the schemes implemented over time.
Diagrammatically, to combat unemployment, two complementary rather than opposing approaches are conceivable: work sharing and growth. In Morocco, the issue cannot be solved by sharing work. Sharing is easier when incomes are high and rising, and this would avoid raising the issue of sharing as it is too often done, namely the sharing between those who already have little (the minimum wage, for example, which some would like to reduce), as if the problem of inequalities were to be solved between "poor" people. Only stronger, job-creating growth would facilitate the implementation of a real policy to combat unemployment. Calculations show that the growth rate necessary to absorb the accumulated stock of unemployed is out of reach. Furthermore, a growth rate cannot be decreed, and the regional environment does not allow for significant positive spillover effects on national growth. However, if it were possible to move from 5% to 6% growth, it would certainly make things easier. Hence the need to explore available margins. These are undoubtedly the elements of a new development model that would generate a sufficient rate of economic growth to absorb the growing supply of labor that needs to be invented.
Larabi Jaïdi.
Lavieeco.com
Published February 18, 2015.
Posted online February 20, 2015.
