67 pc of Kenya’s unemployed give up looking for work

Disheartened by fewer opportunities in a challenging economy where many businesses have frozen hiring to survive, about two-thirds of unemployed Kenyans have given up looking for work or starting businesses.

According to data from the Kenya National Bureau of Statistics (KNBS) for the three months that ended in December, out of the 2.97 million unemployed Kenyans who meet eligibility requirements for the labor force and are between the ages of 15 and 64, 2.01 million were not actively looking for work.

When businesses cut jobs and froze hiring at the height of the Covid-19 economic hardships, there were 1.33 million graduates and retrenched workers who gave up looking for work. This number has since increased to 1.33 million as of June 2020.

They represented 67.71 percent of those without jobs, up from 54.1 percent in June 2020 and 65.08 percent in September.

Ages 20 to 24 make up the majority of those who have given up their jobs (580,281), followed by ages 25 to 29 (351,125).

The 20–24 age group primarily consists of recent graduates, whose efforts to find employment are hampered by a lack of experience and a mismatch between their skills and available positions.

The large number of people who enter the workforce each year has also resulted in a shortage of job opportunities, forcing many to look for alternatives like starting small businesses.

Many companies have been hesitant to hire more people since March 2020 as they work to recover from the economic issues brought on by the Covid-19 pandemic, which forced layoffs and wage reductions in order to survive.

“This can be attributed to a combination of both cyclical unemployment and structural unemployment,” said Ken Gichinga, chief economist at Mentoria Economics.

“Cyclical unemployment occurs when the business cycle is facing an economic downturn and there is reduced demand for goods and services, while structural unemployment exists when there is a mismatch between the jobs that are available and the people for work.”

The government classifies as unemployed those who do not have a job but who have recently engaged in active job searching and who are currently available for employment.

Out of the 2.97 million unemployed people, 960,001 of them were in this group during the review period.

The remaining 2.01 million are considered members of the potential labor force, which refers to people of working age who either made no effort to look for work despite being available and willing to do so or who did but were unable to accept positions should they become available.

According to KNBS data, there were 390,386 unemployed people between the ages of 35 and 49 who were not actively looking for work in the three months that ended in December 2022, up 37.48 percent from the previous quarter.

This indicates that 513,692 unemployed people in this age group, or 76 percent, were not actively seeking employment, up from 434,180 unemployed people, or 65.4 percent, in the previous quarter.

On the other hand, from 139,981 three months earlier, to 120,742 in the quarter that ended in December, fewer unemployed people aged 50 to 64 had stopped looking for work actively.

Jobs have been created in Kenya as a result of years of strong economic growth, but most of them are low-paying, informal jobs that appear at a rate that economists say is too slow to accommodate the country’s rapidly expanding youth population.

“In Kenya, what we are facing is dwindling employment opportunities which is pushing people into informal work,” Federation of Kenya Employers executive director Jacqueline Mugo.

“On average, in Kenya, people are staying out of employment for seven years.”

According to the International Labor Organization’s most recent estimates, South Sudan and Rwanda are the two countries in the group of seven that have higher unemployment rates than Kenya.

According to ILO estimates compiled by the World Bank Group, Kenya’s unemployment rate will be 5.6 percent of the labor force in 2021 if those without jobs and actively seeking employment are considered to be unemployed.

That is higher than Tanzania’s 2.7%, Uganda’s 4.3%, the Democratic Republic of the Congo’s 5.1%, and Burundi’s 1.1%.