23 Employment and the Supply of Labour

23 Employment and the Supply of Labour 23.1 Background Employment creation is seen as a major objective in the short and longer terms. There are many similarities between the employment strategy and the economic strategy - which seeks to deliver broad-based and poverty alleviating growth but the notion of achieving full and productive employment goes beyond that of attaining sustained growth in output by incorporating both distributional and participatory elements. In Rodrigues, as in many poor agrarian economies, a substantial proportion of the active population is employed in family farms or is self employed. As the economy modernises and the youth gets educated, the tendency has been for employment in family farms to decline as the youths are unwilling to go into agriculture. This was the situation in Mauritius in the 1960s when the economy faced one of its most serious recessions and unemployment had reached its highest levels. It was only through the creation of a totally new sector the Export Processing Zone (EPZ) that the situation was reversed. What is the solution for Rodrigues? The growth sectors proposed for Rodrigues are tourism, a revamped and strengthened agriculture which is both more productive and profitable, fisheries with diversification into aquaculture and high sea fishing, and more energised small and medium industries (SMEs) through a sound private sector development (PSD) strategy. Strategies for the sustainable and integrated development of these sectors are detailed in Part IV of this report. While remaining largely family-based, productivity and viability of the agricultural sector are expected to be increased with the shift to modern methods of production which could attract once again a larger number of the young generation into that sector. With the proposed Action Plans to modernise the existing sectors based on a strategy to encourage private sector development as well as the various empowerment initiatives proposed, the rate of employment growth in the public sector which has been an important employment generator is expected to be reduced. Thus a shift in employment patterns is envisaged. 23.2 Unemployment and Activity Rates Caveat Three sources of data are used in this section. Data about labour force participation rates and age-specific activity rates are based on the census of the CSO. The latest one was carried out in 2000. Apart from the census, the CSO also releases annual employment 72 figures in its Digest of Statistics for Rodrigues. The estimates are based on different data sources. Employment is classified by Industrial Groups using the National Standard Industrial Classification (NSIC). 72 According to the ILO definition, persons at work are defined as persons who during the reference period performed work for a wage or salary, or for profit or family gain, in cash or in kind, for at least one hour. 415

The figures are therefore bound to be different. Thus, for 2000 (year of the Census), the number of employed revealed by the census (11,044) does not tally with the one reported in the Digest (13,040). The Ministry of Labour and Industrial Relations and Employment (MLIRE) of Mauritius also releases a Statistical Review quarterly, which reveals figures on the unemployment situation in both Mauritius and Rodrigues. 23.2.1 Activity Rates and Labour Force Participation Rates Activity rates in 2000 and female unemployment The Census of the CSO in 2000 revealed the age-specific activity rates as per the table below. It is observed that the number of economically active women was low not only relative to males but also relative to peer group countries. However, as is noted below, our calculations show that activity rates and labour force participation rates were much higher in 2006. Table 23.1: Age-Specific Activity Rates Age-Specific Activity Rates: Rodrigues (2000) Activity Rate (%) Age Group Male Female 12-14 17.1% 7.2% 15-19 51.8% 30.5% 20-24 89.8% 53.5% 25-29 94.7% 51.7% 30-34 95.4% 47.3% 35-39 96.5% 44.3% 40-44 97.5% 42.5% 45-49 97.4% 39.4% 50-54 95.3% 38.6% 55-59 86.4% 26.1% 60-64 23.9% 16.1% 65-69 21.8% 11.0% 70-74 14.7% 5.2% 75+ 9.7% 3.2% Source: Census 2000, CSO Total 74% 36% Whilst both Mauritius and Rodrigues reported rather similar labour force participation rates (around 76% and 34% for males and females respectively in Census year 2000), the female unemployment rate for Rodrigues was much higher at 34% (as opposed to 9.5% for Mauritius), as illustrated below. Not surprisingly, the percentage of females unemployed as a percentage of total unemployment was also higher. 416

Exhibit 23.1: Female Unemployment in 2000 Female Unemployment in 2000: Mauritius v/s Rodrigues Source: CSO's Census (2000) 50% 45% 40% 35% Percentage 30% 25% 20% 15% 10% 5% Mauritius Rodrigues Mauritius Rodrigues 0% % females unemployed Female unemployment as a % of total unemployment Female Unem ployment On the international front, labour force participation rates are as below. Save South Asia and Middle East & North Africa, all regional groups reported female labour force participation rates above 50% in 2006. As depicted further below, our model shows that for Rodrigues, this key indicator has increased significantly between 2000 and 2006 (from 34% to between 54-65% respectively), thus comparing favourably with Sub-Saharan Africa s trends. Exhibit 23.2: Labour Force participation rate, by sex and region, 1996 and 2006 417

23.2.1.1 Male v/s Female Unemployment The exhibit below depicts the trend in male and female unemployment over the past thirteen years (figures are the annual Digest of Statistics of the CSO). Whilst female unemployment has traditionally been higher than male unemployment, the gender gap seems to be narrowing during the past five years. More women are reported to have joined the Agriculture, Forestry & Fisheries sector. Exhibit 23.3: Male and Female Unemployment: April 1994 April 2007 Male and Female Unemployment: April 1994 - April 2007 Source: M inistry of Labour, Industrial Relations & Employment Number of Unemployed 1800 1600 1400 1200 1000 800 600 400 200 Female Unemployment Male Unemployment 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Unemployment by age-group The highest number of unemployed remains in the age group 20-24 years old as depicted in the table below. Table 23.2: Number pof registered unemployed by age group and sex as at April 2007 Number of registered unemployed by age group and sex as at April 2007 Age group (Yrs) Male Female Both Sexes 15-19 153 193 346 20-24 547 597 1,144 25-29 422 463 885 30-34 223 233 456 35-39 131 116 247 40-44 88 42 130 45-50 47 16 63 50-54 8 2 10 55-60 2 1 3 Total 1,621 1,663 3,284 Source: Ministry of Labour, Industrial Relations, and Employment 418

23.2.2 Employment trends by Sectors: 1994-2006 This section provides an analysis of employment figures released by the CSO annually in its Digest of Statistics on the Island of Rodrigues. 23.2.2.1 Highlights General trends There has been an improvement in 2006 in the ratio of male to female employment. In 1994, the ratio was 70%:30% and has revolved around the same until 2006 when the ratio shifted in favour of female employment (64%:36%) suggesting that the participation rate of females may have increased; Exhibit 23.4 Male and Female Employment: 1993-2006 Male and Female Employment: 1993-2006 18000 80% 16000 70% 14000 60% 12000 10000 8000 6000 50% 40% 30% Total Employment M ale Female Male as % of Total Emp Female as % of Total Emp 4000 20% 2000 10% 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year 0% Source: Digest of Statistics, CSO Agriculture, Forestry & Fishing (AFF) has remained the largest employer over the years, irrespective of whether there were severe droughts or not, as illustrated below. A puzzle has been observed in that employment in this sector even increased during the harsh drought years. Employment in the AFF sector is not moving in the same direction (or magnitude) as rapidly decreasing acreage and dwindling agricultural production; Employment in the public sector is on the downward trend and is set to continue on the same path in the future. 419

Exhibit 23.5 Employment by Industry Group as a percentage of Total Employment: 1993-2006 Employment by Industry Group as a percentage of Total Employment: 1993-2006 40% Employment as % of Total Employment 35% 30% 25% 20% 15% 10% 5% 0% Public Administration Manufacturing Trade, Repairs etc. Educ/Social/Other Agriculture, Forestry & Fishing Construction & Electricity/Water Hotel/Restaurants & Transport/Communication Finance, Real Estate etc.. 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year Source: Digest of Statistics, CSO Employment in the Primary Sector: Agriculture, Forestry & Fishing (AFF); and Mining and Quarrying In the AFF sector, male employment as a percentage of total employment decreased from 20% in 1994 to 18% in 2006. Female employment as a percentage of total employment increased from 13% to 15% during the same period; Females employed in the AFF sector, as a percentage of total female employment, was at 42% in 1994. It decreased to a low of 31% in 2004 but reached back the 42% level again in 2006; Female employment in AFF, as a percentage of total AFF employment, reached a high of 46% in 2006, which represents a significant increase over the 2000 figure (33%); The above are clear indications of the growing importance of the sector to women. These trends have been noted despite that fact that agricultural production and acreage have decreased significantly over the years. This indicates the potential of the sector to absorb an even greater number of individuals, especially women. 420

Exhibit 23.6: Female Employment as a Percentage of Total Sector Employment: 1993-2006 Female Employment as percentage of Total Sector Employment: 1993-2006 60% Women as a % of total employment by sectors 50% 40% 30% 20% 10% 0% Primary Tertiary Secondary 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year Source: Digest of Statistics, CSO 421

Exhibit 23.7: Female Employment Industry Group as a Percentage of Total Female Employment 1993-2006 Female Employment by Industry Group as a Percentage of Total Female Employment: 1993-2006 50% 45% Agriculture, Forestry & Fishing Percentage of female to total female employment 40% 35% 30% 25% 20% 15% 10% 5% Hotel, Transport, Finance Trade & Repair Education & Other Public Administration M anufacturing 0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year Source: Digest of Statistics, CSO 23.2.2.2 Formal employment and earnings Sectorally Women account only for 19% of employees in large establishments, but 30% of all employment in 2004. In small production units, women account for 35% of total employed; of which 45% are own Account Workers, 26% are Employees and 20% are Unpaid Family Workers. Sectorally, as depicted above, the main source of employment was the agricultural sector (33% of males and 31% of females). For all the other sectors, the male and female patterns were quite different. In 2004, for example, while about 13% of women were employed in the Manufacturing sector only 6% of males were employed in that sector. Construction was a sector where only males found employment. 11% of females and 9% of males found employment in the wholesale and retail trade. As a percentage to total employed, the hotels sector attracted 422

more women than men: 3% men and 5% females; it was the same as regards sectors like Education and Health. Earnings There are more women in the lower income-earning sectors/occupations so the average income earned by women is lower than that earned by men. Monthly earnings, for instance, were highest in the Repairs of m/cycles and Wholesale and Retail trade industrial group with average monthly earnings of Rs 12,296; 73 and women accounted for only 6% of employment (9 women) in that sector. Women have however made some inroads into the Education industrial group (43% of Total employment in that group) with monthly earnings of Rs11,810 (some 115 women) and into Public Administration industrial group (18% of total employment in that group) with monthly earnings of Rs 10,524 (570 women). The average monthly earnings for all sectors were Rs10,505 in 2004, representing an increase of 71% since 2000. The sub-sectors with the highest and lowest monthly earnings were Education and Manufacturing, respectively. The sub-sectors which have benefited from the highest increases since 2000 were Public Administration and Defence, Social Security, and Hotels and Restaurants. (Full tables are provided in the Diagnosis Report, such as Table B.5 18.8 Table B. 13.10:Average monthly earnings by industrial group). Occupational pattern Occupational pattern for both employed males and females did not alter between the Census years 1990 and 2000. The majority (21% and 25% males) and (27% and 30% females) respectively were skilled agricultural and fishery workers. It is interesting to note that there were more women in the technicians and associate professionals group in absolute terms 434 (16% of total) than men and for both men and women the numbers employed had increased between 1990 and 2000. This is a very positive development representing improved technical skills in the labour market. 23.2.2.3 International comparisons Selected labour market indicators for women The table below is adapted from the Global Employment Trends for Women Brief of the ILO (March 2007). Our model shows that female labour force participation rate in Rodrigues has increased significantly between 2000 and 2006. It could even have exceeded that of Mauritius. However, the usual caveat applies, as explained in the sections below. 73 Central Statistics Office, Digest of Statistics on Rodrigues 2004, Tables 6.1 to 6.4 page 36 39, July 2005, Port Louis 423

Table 23.3: Selected comparative labour market indicators for women (2006) Female labour force participation rate Female employmenttopopulation ratio Female unemployment rate Female share of total employment Developed Economies and EU 52.7% 49.2% 6.6% 44.7% Sub-Saharan Africa 62.8% 56.8% 9.6% 42.9% S.E. Asia & Pacific 58.9% 55.0% 6.6% 42.1% Main status of female employment Wage & salaried workers (89.5%) Ownaccount workers (42.3%) Contributing family workers (37.1%) Gap between female & male lab. Force part. Rate -16.1 percentage pts 23.1 percentage pts 23.9 percentage pts% Mauritius 47% (a) 39.2% 15.5% 34.0% Rodrigues 54-65% (b) 43.0% 18-22% (b) 36.0% Professional & technical workers (43%) N.A. [33% in Agriculture & Fisheries] 37 percentage pts% 25 percentage pts (b) a. Global Gender Gap Report 2007 (2005 figures) b. Likely range, based on new estimates Male and female share in total employment globally It is also noteworthy that, whilst the trend globally is for women to exit the agricultural sector (as depicted below), the trend has been on the increase in Rodrigues. 424

Exhibit 23.8: Female and Male sectoral employment shares as a percentage of total employment, 1996-2006 Male and female share in total employment by selected blocs of countries Table 23.4: Male and Female Share in Total Employment (2006) Employment in Employment in Employment in agriculture (%) industry (%) services (%) Females World 40.4 17.2 42.4 Developed Economies and EU 2.5 12.4 85.1 Sub-Saharan Africa 64.2 5.5 30.3 South East Asia and the Pacific 47.2 15.4 37.3 Mauritius 7.3 31.8 60.9 Rodrigues 41.6 9.3 49.1 Males World 37.5 24 38.4 Developed Economies and EU 3.7 33.6 62.7 Sub-Saharan Africa 62.1 11.3 26.6 South East Asia and the Pacific 46.8 19.5 33.6 Mauritius 10.4 34.2 55.3 Rodrigues 28.3 20.8 50.9 Sources: ILO, Global Employment Trends Model, 2006; CSO; KPMG Calculations 425

23.3 Employment Projections This section is based on the statistics obtained from various sources as mentioned above ( Caveat ). A model has been calibrated and simulations made based on several assumptions as depicted below. An additional caveat relates to the fact that somebody who had been counted as employed (as per the ILO definition) could very well be registered as unemployed at the MLIRE office in Rodrigues. However, as shown in the base scenario for year 2000, the effect on Census figures was minimal (i.e., when Employment figures as revealed in the annual Digest of Statistics are added with the unemployment figures of the MLIRE, the Labour Force figure is increased by 139 only). 23.3.1 Participation in the world of work: Trends 23.3.1.1 The Labour force participation rate (LFPR) as a key indicator for policy-making As defined by the International Labour Organisation (ILO), the LFPR is a measure of the proportion of a country s working-age population that engages actively in the labour market, either by working or looking for work. It thus provides an indication of the relative size of the supply of labour available to engage in the production of goods and services. The LFPR indicator plays a central role in the study of the factors that determine the size and composition of a country s human resources and in making projections for the future supply of labour. The information is widely used to formulate employment policies, to determine training needs and to calculate the expected working lives of the male and female populations and the rates of accession to, and retirement from, economic activity crucial information for the financial planning of social security systems. The indicator can also be used to understand the labour market behaviour of different categories of the population. LFPR and Activity Rates in Rodrigues Our model uses employment figures as reported in CSO s Digest of Statistics every year. The methodology used by the CSO to arrive at this figure is based on ILO s Guidelines. Unemployment figures used in our model originate from the MLIRE office in Rodrigues. Only people with no other employment were counted. Based on the above, figures for 2000 and 2006 are as reported below. Statistics for Year 2000 (reworked) and 2006 (imputed) Whilst the Census 2000 conducted by the CSO revealed the figures in the table below, we arrive at a slightly different situation by using figures obtained from the Digest of Statistics and the MLIRE unemployment figures. The figures for 2000 and 2006 are as depicted in the table below. 426

Table 23.5: Labour Statistics (2000 and 2006): Census figures v/s New estimates (imputed figures/range) KPMG Model (imputed figures: 2000)* KPMG Model (imputed figures: 2006)* Indicator Census 2000 Working-age Population Working-age Population: Male 13,273 13273 (a) 12590 (a) Working-age Population: Female 13,631 13631 (a) 13050 (a) Working-age Population: Total 26,904 26,904 25,640 Economically-Active Population Employed: Male 7,831 9199 (a) 9875 (a) Employed: Female 3,213 3841 (a) 5560 (a) Total Employed 11,044 13,040 15,435 Unemployed: Male 1,828 787 (b) 1452 (b) Unemployed: Female 1,633 817 (b) 1525 (b) Total Unemployed 3,461 1,604 2,977 Labour Force Male 9,659 9,200-9,700 (c) 9,900-12,000 (c) Female 4,846 3,800-5,000 (c) 7,000-8,500 (c) Total Labour Force 14,505 13,000-14,700 16,900-20,500 Unemployment Male 18.9% 8-10% (c) 12-15% (c) Female 33.7% 16-18% (c) 18-22% (c) Labour Force Participation Rate Male 72.8% 77-80% (c) 79-90% (c) Female 36.0% 37-40% (c) 54-65% (c) * Based on, or adapted from, Employment figures of the Digest of Statistics and Unemployment figures of the Ministry of Labour & IRE (a) Digest of Statistics, Central Statistics Office (b) Ministry of Labour, Industrial Relations and Employment (c) Range likely to be between these two figures Key findings 1 The working-age population has decreased due to the new methods of calculation of the CSO (15 years and above rather than 12 years in 2000). It is also possible that Rodriguans are studying for longer periods of time instead of joining the labour force immediately after school; 2 Calculations show that the labour force has increased markedly between 2000 and 2006 probably due to high female activity rates in almost all age-specific groups. Our model shows that the labour force could have increased from a range of 13,000-14,700 in 2000 to the between 16,900-20,500 in 2006. These figures have been derived from population figures as well as employment and unemployment statistics taken together. Given that, by definition, the labour force is equal to employment plus unemployment, it must necessarily be true therefore that age-specific activity rates have increased markedly between 2000 and 2006; 427

3 LFPR has also increased for both males and females. However, the increase for female LFPR has been more significant. As highlighted by the ILO in its Global Employment Trends for Women in March 2007, rising or high labour force participation rates do not necessarily imply that labour markets are developing positively for women. The LFPR does not, as a matter of fact, provide an insight into the likelihood of being employed, nor does it indicate the quality of jobs. Many people could be stuck in the categories unpaid contributing family worker or low paid own-account worker (40.5% of those classified as working in small establishments and itinerant units in the Census of Economic Activities 2002); 4 Unemployment has increased significantly for both males and females between 2000 and 2006 (imputed figures). Census 2000 figures, however, remain much higher at 18.9% and 33.7% for males and females respectively in 2000. These figures, as indicated above, do not tally with employment statistics of the same year and have thus been adjusted as shown in column 3 in the above table; 5 The increase in Labour Force and LFPR is good news for Rodrigues. They signal that policy-makers can count on a higher number of persons, especially women, to support development by remaining economically active; 6 The model shows that the problem of Rodrigues is both one of unemployment and underemployment. Those in employment may not be having decent jobs that meet their aspirations. Many of them could also lie in the category unpaid contributing family worker or low paid own-account worker. Moving from the latter two categories into wage and salaried employment is a major step forward in terms of freedom and self-determination for many women; 7 Empowerment of the population, especially women, and the creation of more fulfilling jobs can lift a higher number of people out of poverty and increase standard of living and quality of life in Rodrigues. The challenge is not only one of job creation but also to allow existing job holders to aspire at obtaining jobs with higher wages; 8 The increase in women s participation in the Rodriguan labour force (as revealed by our model) can be interpreted to be one of the important social, economic, and cultural trends in the past decade, even though it is highly likely that a majority of women are not engaged in paid work. The sustainable development initiatives proposed in this SIDPR is expected to move these categories of women up the ladder by ensuring they engage in paid work or higher paid jobs. This is expected to transform gender relations even further, change patterns of marriage and childbearing, and could be viewed in the medium term as a key indicator of women s progress toward greater equality in the labour force. 23.3.2 Employment projections: 2015 and 2020 The projects, initiatives, and programmes proposed in Part IV of this report ( Ensuring economic sustainability ) and embodied within the bold Rodrigues-on-Business Initiative for Sustainable Development ( ROBI ) are expected to bring about profound changes in the employment scenario in the long term. The target is to achieve 8% unemployment by 2015 and 5% structural unemployment (or full employment) by 2020. However, as demonstrated above, 428

having high employment figures does not automatically imply reduced poverty or better quality of life. The fight should be geared towards underemployment as well, i.e., providing better quality, paid jobs. The typical type of underemployment in Rodrigues relates to "involuntary part-time" workers, who could (and would like to) be working for the standard work-week but can only work a fraction of this. It is likely that this kind of underemployment arises because the labour market does not "clear" using wage adjustment. There is, instead, non-wage rationing of jobs. The table below, which is for illustration purposes only (and which should be interpreted with care, given the underlying assumptions), portrays a possible employment scenario by sector in the long run. The rate of job creation depends to a significant extent on implementation of the projects/initiatives/programmes in toto as specified in their respective chapters in Part IV. 23.3.2.1 Assumptions Labour force participation rate Labour force participation rates are expected to oscillate as follows in the medium- to longterms, which are compatible with global trends (and those observed in similar types of economies): Male: Between 80% and 90%; and Female: Between 55% and 65%. Unemployment Table 23.6: Assumption with regards to Unemployment (Targets) Assumptions with regards to Unemployment (Targets) 2006 2015 2020 Male 14.6% 7% 5% Female 18% 9% 5% 23.3.2.2 Projections Population and Labour Force The table below provides estimates of the Population (as provided by the CSO), the Labour Force (derived from our model which indicate relative higher activity rates across all agegroups), and Employment by Sector. 429

Table 23.7: Population and Labour Force Projections: 2015 and 2020 Employment by Sector Table 23.8: Evolution of employment (%): Optimistic Scenario Evolution of Employment (%): Optimistic Scenario Sector 2006 2015 2020 Agriculture, Fisheries etc. 33% 25% 21% Primary 33% 25% 21% Manufacturing 7% 9% 11% Construction 10% 11% 11% Secondary 17% 20% 22% Trade, Repairs etc. 9% 11% 12% Hotel, Transport etc. 11% 15% 18% Financial intermediaries etc. 2% 3% 3% Government 19% 17% 15% Education and Others 9% 9% 9% Tertiary 50% 55% 57% Total 100% 100% 100% 430

Table 23. 9: Evolution of Employment (Number): Optimistic Scenario Evolution of Employment (Number): Optimistic Scenario Sector 2006 2015 2020 Agriculture, Fisheries etc. Primary 5110 4485 4085 Manufacturing 1615 2140 Construction 1974 2140 Secondary 2565 3588 4280 Trade, Repairs etc. 1974 2334 Hotel, Transport etc. 2691 3501 Financial intermediaries etc. 538 584 Government 3050 2918 Education and Others 1615 1751 Tertiary 7760 9868 11088 Total Employment 15435 17941 19452 Unemployment 16.3% 8.1% 5% Sources: CSO and KPMG calculations 23.4 Way Forward The projections above are based on the synergistic benefits that are expected to be generated by launching the Rodrigues-on-Business Initiative for Sustainable Development (ROBI) as elaborated in Part IV of this SIDPR. The sectoral development plans need to be implemented in toto and certainly not in a piecemeal fashion. The deliberate commitment of the RRA and Civil Society to rally behind one common vision will have the effects of galvanising the energies of the Rodriguans of all walks of life and widen their circles of opportunities; Employment creation should not be the only preoccupation in the medium term. It is crucial to enable people to move up the ladder and to increase the likelihood of women to be employed. These are possible given relatively higher labour force participation rates (based on KPMG calculations pending obtaining findings of the forthcoming Census of the CSO); Better statistics collection remains a critical issue so as to obtain accurate labour force and labour force participation rates. These in turn will help in the decision-making process; The rise in female labour force participation will be a key step toward gender equality both at home and in the workplace. However, closing the labour force gap should only be interpreted as only part of the story: Women should be better represented in higher-paying positions, especially in fields such as natural and physical sciences, mathematics, and engineering. Science and engineering could potentially become an important engine for higher earnings, innovation, and economic growth. Closing the gender gap in this field is one way to ensure a strong and competitive Rodriguan economy. 431