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Egypt - Labor
Creating jobs for a rapidly growing population has been one of the most difficult tasks that faced successive Egyptian governments. After 1976 the population grew at an annual rate of 2.9 percent. Reliable information on the occupational structure was scarce, partly because of the fast pace at which this structure changed, of the rural-urban migration, and of the dearth of indepth studies.
Official estimates differed on employment figures. According to the Ministry of Planning, employment in the formal sector increased at the rate of 2.6 percent per year between 1976 and 1986 (the census years). The number of workers in agriculture stayed steady, at around 4.2 to 4.5 million, during the same period. Agricultural workers represented 44 percent and 37 percent of total employment at the beginning and end of the period, respectively, indicating a decline in agriculture's share. The preceding data may exaggerate the participation of labor in agriculture, which in the 1980s became only a part-time occupation for many workers as employment patterns in the countryside began to resemble those of some urban areas. Overall, the 1986 census showed that employment in rural areas was about 6.19 million, compared with 5.48 million in urban areas.
In 1976 and 1986, industry absorbed about 13 percent and 16 percent, respectively, of total employment. The annual growth rate of employment in the sector was 4.5 percent over the same period. The number of people employed over the same period fell substantially in construction and rose steadily in the services, which absorbed about 31 percent of the labor force in 1986. Employment in trade grew significantly following the initiation of Sadat's open-door policy and the import boom after 1974, and leveled off subsequently.
The distribution of employment also shifted along gender lines. Female participation in the labor force grew steadily, although slowly. One estimate gave the female share of total employment as 8 percent and 9.5 percent in 1976 and 1988, respectively, representing a growth rate of 4.1 percent annually.
The breakdown of public versus private employment was difficult to ascertain because official statistics did not distinguish between the two. Employment in the private sector in 1977 was more than double (6.6 million to 3.1 million) that in the public sector and was concentrated in agriculture and the services. It has been estimated that the increase in private employment accounted for more than 65 percent of overall employment growth between 1973 and 1983, suggesting that the ratio of private to public employment increased. Considering that both overall employment and government employment stagnated after 1983, the ratio also probably remained unaltered thereafter.
Information on employment in the late 1980s in the informal sector, which included small-scale manufacturing, handicrafts, personal services, retailing, and other ill-defined activities, was not available. Activities of the sector were not registered, and participants changed their jobs frequently. Most of those considered unemployed probably engaged in one or another of these activities; hence, the size of the informal sector was most likely to expand as unemployment increased at the close of the decade. Mobility between the informal and the formal sectors was effectively nonexistent; those who joined the informal sector overwhelmingly remained there.
Employment grew at a slower rate than did the population and the labor force, resulting in a worsening unemployment situation. According to official accounts, the rate of unemployment increased from 2.8 percent in the period from 1975 to 1977 to about 12 percent in 1986. The figures probably understated the problem, because other informed sources put the rates at 20 percent to 25 percent in 1987 and 1988. Analysts adduced a multitude of reasons for the rapid increase in unemployment, including high population and low economic growth rates, inability of industry to absorb larger numbers of workers, high capital intensity in new industrial enterprises, the focus of the 1980s Five-Year Plan on the infrastructure, and the return of Egyptians formerly working abroad.
In addition to unemployment, economists pointed to underemployment, or disguised unemployment. There was a consensus that underemployment was rampant in the government bureaucracy, because of overstaffing and low remuneration. In 1990 the government was considering paying private-sector employers a twoyear salary for every new graduate they hired. It viewed the measure as a means of checking the expansion of the bureaucracy and ameliorating the unemployment problem.
Although Egypt had a high percentage of high-school and college graduates, the country continued to face shortages in skilled labor. Probably 35 percent of civil servants and 60 percent of persons in public-sector enterprises were unskilled or illiterate. The lack of skilled labor was blamed on, among other things, the cultural bias against manual work, the theoretical nature of courses in most higher education institutions, and the emigration of skilled personnel abroad, where they received higher wages. There were complaints that the implementation of development plans was hampered by the insufficient supply of skilled labor.
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