Economy, Domestic Economy

Job Market Unaffected by Growth Rates

Job Market Unaffected by Growth RatesJob Market Unaffected by Growth Rates

Minister of Cooperatives, Labor and Social Welfare, Ali Rabiei says the positive economic growth experienced over the past one year has failed to lead to job creation.

Addressing an administrative meeting in Ardabil Province on Thursday, the minister noted that the job market is still suffering from harmful effects of the negative economic growth experienced in the previous years, Mehr News Agency reported.

The governor of Central Bank of Iran, Valiollah Seif said on Thursday that economic growth during the past Iranian year (ended March 20) stood at 3%, following two consecutive years of negative growth.

Rabiei believes the government has a long way to go before achieving the 8% economic growth envisioned in the sixth five-year economic development plan (2016-2021).

“To achieve this objective and create enough jobs, considerable investments are required which the government alone cannot afford without public participation,” he said.

According to Rabiei, as many as 4.5 million university graduates in the country are currently unemployed.

A recent report published by the Parliament Research Center indicates that there has been a negative correlation between economic growth and employment status over the past decade.

Unemployment was at its highest in the Iranian year 2010-11 when 13.5% or 3.22 million of the labor force were unemployed. This is while the economy had experienced 6.5% positive growth during the period – the highest since 2008.

The unemployment rate stood at 12.1% and 10.4% during the years 2012-13 and 2013-14 respectively, when economic growth of -6.8% and -1.9% was recorded.

The Parliament’s report predicts that 5.6 million new college graduates will enter the job market by 2021, doubling the current rate of unemployment.

Overreliance on oil revenues and imports as well as technological advances which have led to higher workforce productivity are seen as some of the main reasons behind the job market’s failure to improve in line with economic growth.

Assuming 37.3% participation rate and 5% average annual economic growth from 2015 to 2021, the report forecasts that unemployment rate will reach 15.9% in 2021, leaving 4.17 million jobless.