ID :
140833
Sun, 09/05/2010 - 18:43
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http://m.oananews.org//node/140833
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MONGOLIA QAURTERLY ECONOMIC UPDATE ISSUED BY WORLD BANK
(continuation)
LABOR MARKETS AND POVERTY
Unemployment, as measured by the labor force survey, has reached almost 13 per cent
The official unemployment rate, which includes only those who are registered with the Labor and Social Welfare Service Center, has been trending downward since July 2009, falling to 3.4 per cent in May. This is only slightly down on 3.5 per cent in May 2009. However, the overall number of registered unemployed is 30 per cent higher compared with December 2008.
Nevertheless, as explained in previous Updates, these numbers likely grossly underestimate the impact of the economic downturn on both the level of unemployment and real wages. According to the Fourth Quarter Labor Force Survey, which also takes into account those who are not officially registered as unemployed with the Labor and Social Welfare Service Centers, the unemployment rate stood at 12.8 per cent, up from 10.5 per cent in September 2009, with some 142,000 people unemployed from the total labor force of 1,120 thousand.
The impact of increasing inflation is evidenced through a decline in real wages seen in informal markets
The World Bank has commissioned quarterly surveys to evaluate the changes in real income in Ulaanbaatar's informal labor markets during the recent years of crisis and recovery. These labor markets are an important source of income for migrants, unskilled, unemployed, students and the poor. The surveys have highlighted the substantial impact high inflation has had on real incomes. In mid-2008, when the consumer price index increased by over 32 per cent yoy, the survey indicated that real effective incomes had fallen by about 60 per cent in some informal urban labor markets. This was due to inflation eroding nominal wages as well as mounting job losses. Employment conditions also worsened for informal workers in rural regions. In particular, herders and informal mining workers were faced with decreasing job availability, falling wages and an increase in living expenses.
The latest survey was conducted in June 2010. In terms of the patterns of wages, workers' nominal wages on average increased by about 10 per cent from January to June 2010. This was particularly due to an increase in job opportunities in the construction sector. Real wages, however, have declined on average due to the rise in inflation. Consequently, the number of the workers surveyed who indicated that their earnings do not meet their basic needs increased by about 15 per cent between January and June this year to reach over 35 per cent of those surveyed.
The latest survey also indicates a continued influx of workers into these informal markets. This reflects ongoing migration from the countryside due to the dzud (29 per cent of survey participants were migrants from rural areas) and increased work opportunities offered by improved trade activities. Migrant inflows have resulted in a large expansion of ger areas, with infrastructure services failing to keep pace. Typically ger areas lack basic infrastructure services and are also characterized by high levels of environmental degradation. This in turn has raised important policy challenges of how best to sustainably develop these areas. A recent study by the World Bank has identified key priority areas that require attention by the government and considers different policy directions that could be adopted.
LABOR MARKETS AND POVERTY
Unemployment, as measured by the labor force survey, has reached almost 13 per cent
The official unemployment rate, which includes only those who are registered with the Labor and Social Welfare Service Center, has been trending downward since July 2009, falling to 3.4 per cent in May. This is only slightly down on 3.5 per cent in May 2009. However, the overall number of registered unemployed is 30 per cent higher compared with December 2008.
Nevertheless, as explained in previous Updates, these numbers likely grossly underestimate the impact of the economic downturn on both the level of unemployment and real wages. According to the Fourth Quarter Labor Force Survey, which also takes into account those who are not officially registered as unemployed with the Labor and Social Welfare Service Centers, the unemployment rate stood at 12.8 per cent, up from 10.5 per cent in September 2009, with some 142,000 people unemployed from the total labor force of 1,120 thousand.
The impact of increasing inflation is evidenced through a decline in real wages seen in informal markets
The World Bank has commissioned quarterly surveys to evaluate the changes in real income in Ulaanbaatar's informal labor markets during the recent years of crisis and recovery. These labor markets are an important source of income for migrants, unskilled, unemployed, students and the poor. The surveys have highlighted the substantial impact high inflation has had on real incomes. In mid-2008, when the consumer price index increased by over 32 per cent yoy, the survey indicated that real effective incomes had fallen by about 60 per cent in some informal urban labor markets. This was due to inflation eroding nominal wages as well as mounting job losses. Employment conditions also worsened for informal workers in rural regions. In particular, herders and informal mining workers were faced with decreasing job availability, falling wages and an increase in living expenses.
The latest survey was conducted in June 2010. In terms of the patterns of wages, workers' nominal wages on average increased by about 10 per cent from January to June 2010. This was particularly due to an increase in job opportunities in the construction sector. Real wages, however, have declined on average due to the rise in inflation. Consequently, the number of the workers surveyed who indicated that their earnings do not meet their basic needs increased by about 15 per cent between January and June this year to reach over 35 per cent of those surveyed.
The latest survey also indicates a continued influx of workers into these informal markets. This reflects ongoing migration from the countryside due to the dzud (29 per cent of survey participants were migrants from rural areas) and increased work opportunities offered by improved trade activities. Migrant inflows have resulted in a large expansion of ger areas, with infrastructure services failing to keep pace. Typically ger areas lack basic infrastructure services and are also characterized by high levels of environmental degradation. This in turn has raised important policy challenges of how best to sustainably develop these areas. A recent study by the World Bank has identified key priority areas that require attention by the government and considers different policy directions that could be adopted.
