Revised Methodology Resets Unemployment Rate at 6.4% in 2014
The National Bureau of Statistics (NBS) yesterday officially unveiled the revised concepts and methodology for computing labour statistics in the country, resetting the unemployment rate at 6.4 per cent as at fourth quarter of 2014.
Unemployment rate would have been 24.3 per cent using its old method of calculation.
However, the underemployment rate in the same period was put at 17.9 per cent.
But like the recent rebasing of the GDP, the new unemployment statistics is unlikely to make any tangible alteration to the critical unemployment situation in the country.
Nevertheless, it tends to benefit policy makers the more by painting a near accurate picture of the unemployment condition to guide their policy decision.
In the NBS adjusted methodology, which was perfected by the “Review of Unemployment Statistics Committee” headed by Prof. Sarah Anyanwu of the University of Abuja, a person who works for 20 hours and above in the reference week is considered to be fully employed as opposed to the International Labour Organisation (ILO’s) standard of 40 hours.
On the other hand, an individual is regarded as unemployed if he or she did nothing or worked less than 20 hours in the reference week while working for between 20 to 39 hours in the reference week renders an individual as underemployed.
But for the new computation method, the unemployment rate would have been 24.3 pe rcent in Q4 2014 if the old method was applied.
Speaking at the unveiling in Abuja, the Statistician General of the Federation, Mr. Yemi Kale, said the NBS has statutory powers by the Statistics Act to unilaterally determine appropriate statistical methodologies for the country.
He said: “The decision to amend our national definition of unemployment however, given how important a challenge it is to our country is not something we take lightly at the NBS.”
Kale said ILO’s definition of unemployment had inherent shortcomings that could render it unfit for the Nigerian economy.
For instance, using ILO standard, the country’s unemployment rate would be 2.2 percent in 2011 but 6.0 percent using the new NBS regime and 23.9 percent using the old system of computation.
Meanwhile, the new unemployment statistics showed female unemployment rate is higher while instances of under employment was far more prevalent over the unemployed.
Furthermore, the new NBS unemployment computation significantly altered exiting jobless rates putting it at 5.1 per cent against 21.4 percent adopting the old regime and ILO’s 1.9 per cent in 2010.
In 2011, the unemployment rate was 23.9 per cent, 6.0 per cent and 2.2 per cent for the old, new and ILO standard respectively.
For 2012, jobless rating was 27.7 per cent, 10.6 per cent and 7.6 per cent using the old, new and ILO standard respectively while in 2013, unemployment rate was 24.7 per cent, 10.0 per cent and 7.1 per cent respectively.
According to Kale,“We need to know how many are unemployed and underemployed. How many are in seasonal, venerable and structural employment. I need to stress this point here that the definition of employment doesn’t take your income or qualifications into account.
“Some have argued that a taxi driver is only employed if his skills and qualifications are in line with what they perceive as basic requirements required being a taxi driver. If an uneducated man is a taxi driver then he has a job but if a PhD holder is a taxi driver then suddenly the activity of taxi driving is suddenly not a job.
“I’m sorry to say that taxi driving is a job regardless of who is doing it. However when a PhD driver does it, he is underemployed because he is doing work not commensurate with his skills so we will classify him as employed but underemployed. This sends a message to policy makers they have to create a better job for him while freeing what he is doing to an unemployed man who fits the skills of a taxi driver. This is more useful than emotionally dismissing him as unemployed and ignoring that that vacancy exists.
“The more acceptable narrative to policy makers should be there is a PhD holder driving a taxi preventing some other Nigerian whose skills are better suited for that job so you need to create a more suitable job for the PhD holder so the vacancy of a driver can be given to someone more suited.”