New NBS employment measurement system: Is unemployment problem solved in Nigeria?

In August 2023, the National Bureau of Statistics (NBS) issued the Labour Force Survey conducted with the new unemployment measurement methodology.

The survey ignited an active public discussion due to its key findings deemed controversial by labour market experts.

The most heated part of the conversation is whether the new unemployment measurement system is effective enough to address the interests of a regular Nigerian worker and positively influence unemployment management and the overall economic prosperity of the country.

One of the most conspicuous findings is the employment rate of 15 and above year-old Nigerians standing at over 73% from Q4 2022 to Q1 2023.

The number is based on the new employment metric, according to which every individual who works at least 1 hour per week is considered employed.

The definition poses a sharp contrast with the previous measurement system, where the unemployment rate accounted for over 33% and included those who worked less than 19 hours per week.

According to the new methodology, the 33.4% figure represents the underemployment rate of Nigerians working less than 40 hours weekly.

To compare, the unemployment survey “How Do Young People Survive Without Jobs” issued in Q4 2022 by Jobberman Nigeria confirmed that over 50% of Nigerian youths are unemployed and underemployed.

Does the drastic change in numbers mean Nigeria’s unemployment has dropped significantly?

The unemployment measurement framework revision is particularly outstanding in light of the recent minimum wage increase moves, such as the National Pay Policy draft in work and the urge of the Trade Union Congress of Nigeria to provide a six-fold increase of the N30,000 minimum wage.

While this minimum income standard is still officially accepted in Nigeria, it is safe to deduce that a worker who spends from 1 to 19 hours per week doing a for-profit job often does not earn even N30,000 amidst the over 24% inflation.

Although the credibility of the new methodology`s framework, developed upon the International Labour Organisation guidelines, is unquestionable, practical application is challenging.

The current state of the Nigerian economy is not sufficiently conducive for citizens to work less time and earn at par with those who work more.

By the end of December 2022, as the new Labour Force Survey opens with Q4 2022 data, the minimum wage equated to about 40 dollars according to the parallel market rates. It was already lower than the minimum wage in at least 22 African countries.

Evidently, if these countries adopt the same methodology, their workers will turn out to be more financially sustainable and earn more per hour on average.

The updated unemployment measurement methodology also allows for little space to compare workers’ income to occupation.

Imagine two workers: one works at a company for 16 hours a week, commuting time and money, while the other is a self-employed small business owner who works the same hours from home.

Even if they make the same amount overall, the hourly pay will differ because of commuting costs.

Now, think about a farmer. They don’t earn by the hour; growing and selling their crops takes days or months.

A farmer selling in the market spends a lot before making a profit, while a farmer who grows for themselves spends less because they consume what they produce at home.

Moreover, we have no definite working age limit to measure income adequacy, starting from 15 years old under the new framework.

In Nigeria, age-based discrimination remains a problem, affecting both young and elderly workers who may be underpaid.

Employers might unfairly lower hourly wages, citing fewer dependents or perceived skill differences. Older workers might also earn less due to health conditions and slower work.

To address this, we need to focus on improving working conditions to ensure every worker can earn enough to cover daily expenses or feed their family weekly.

We must also ensure that vulnerable citizens have job opportunities, even if it’s just for one hour a week. We can only reduce unemployment statistics that align with Nigerians’ living standards by addressing these issues.