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WHAT WILL SOLVE LABOUR SHORTAGE: IMMIGRATION OR MINDSET CHANGE?

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A Conversation with Suresh Shah

 "Hierarchical nature of the Sri Lankan society is a primary cause of the crippling labor shortage the labor intensive sectors are experiencing," observed Suresh Shah, CEO, Director / CEO at Lion Brewery (Ceylon) PLC and former chairman of Ceylon Chamber of Commerce.

 

Talking to economy.lk, Shah added that the current labour shortages experienced by the apparel, estate and construction sectors can only be explained by looking at the issue from a societal angle. The Joint Apparel Association Forum (JAAF) states that there are currently around 20,000 vacancies to be filled and Planters' Association of Ceylon frequent complaints of crippling labour shortages in the estate sector.  

 

While the industry suffers from severe labour shortage, one out of every five Sri Lankan youth remains unemployed:

(Table 1 - Number of Unemployment and Unemployment rate by age group and gender – Second quarter 2017).

The apparel industry is experiencing a chronic labour shortage in machine operator positions, which are mostly occupied by women, while the female labour force participation hovers around 35%, which hints that there is limited interest among unemployed youth and women to take up these jobs.

 

“This shows that there is a disconnect and it’s possible that unemployed youth don’t want to do labour intensive work,” Shah said.

 

It is interesting to note that the unemployment is higher among relatively more educated people: 

(Table 2- Number of Unemployment and Unemployment rate by level of education – Second quarter 2017)

Shah's observations are vindicated by recent research that highlights, which states that bad social image and changing career aspirations as two major reasons why women are hesitant to enter apparel sector. The 2016 study An Empirical Investigation of Labour Shortage in the Manufacturing Sector in Sri Lanka states that female factory workers in the apparel sector are stigmatized as promiscuous and are referred to as ‘Juki girls’, a derogatory term for machine operators. These negative connotations also have an impact on their safety and heightens the risk of sexual harassment. The IPS research also highlights that as the population has become more educated, most young people now have obtained basic educational qualifications such as G.C. E. Ordinary Level Certificate, their career aspirations have changed. Rising education levels too has obviously dampened the enthusiasm for manual work, as education is seen as the gateway to white collar vocations.

 

“This is why I say the labour shortage is not completely the result of a failure in education and vocational training. It’s just that there is no dignity of labour in Sri Lanka. If you go into particularly in the developed economy, it doesn’t matter whether you are a construction worker or a CEO, your social status is not totally dependent on the work you do. However in South Asia it’s different, when you are in the labour force your social standing is low,” he said.

 

Industry initiatives such as Abhimani; the pride of Sri Lanka by JAAF and Women Go Beyond by MAS, have attempted to address this issue. However the outcome of these initiatives have not been documented.

 

Some observers disagree with Shah. They point out that demand for manual work is expected to wane as a society prospers. Back in late 1970s, the rural poverty level of Sri Lanka was topping 30%, since then the poverty level in Sri Lanka has gradually declined. The abject poverty of late 1970s, when the offshoring of apparel manufacturing arrived in Sri Lanka, is almost non-existent now.

 

Examples from other parts of the world too have shown that educated youth are no longer interested in labour intensive, bottom rung jobs even if social stigma no longer exists. From United States to Singapore, countries have reformed their labour laws to address their low skilled labour shortage.

 

Observers say that rather than attempting to convince educated youth to take up manual work, immigration and labour laws should be reformed to facilitate cross boarder flow of labour, and structural change in economy, to create demand for educated youth would be the only lasting solution for youth unemployment.

The Ceylon Chamber of Commerce

Economic Intelligence Unit

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