Employment growth slows down in 2008 mainly among expatriates
Employment growth slows down in 2008 mainly among expatriates… Kuwaiti employment share up in private sector… Kuwaiti women participation up …
In its latest economic brief, National Bank of Kuwait (NBK) noted the continued strong growth in employment of Kuwaiti nationals in the private sector during 2008 at a double digit rate. The 16% increase was similar to the 2007 rate but lower than the average for the previous five years. Nonetheless, the number of entrants to the private sector exceeded entrants into the public sector, according to the latest data from the Public Authority for Civil Information.
Today the private sector employs 17.8% of the Kuwaiti labor force, almost three times the share in 2000, when a national labor support law was introduced. The law called for the government to provide Kuwaitis working in the private sector with the same benefits available to their counterparts in the public sector. It also imposed minimum quotas on the share of nationals in the workforce employed by private institutions. In 2008, a new law was passed requiring higher quotas for the employment of nationals beginning in 2009. Quotas differ for various sectors.
In contrast, employment of nationals in the public sector grew 2.9%, its slowest rate in over a decade. As a result, growth in the total number of employed Kuwaitis slowed to 5.0%, though the labor participation rate improved by half a percentage point relative to 2007, more notably among females.
There are signs that the participation of women among Kuwaitis has been on the rise. In the public sector the proportion of women has risen from 35% in 1998 to 43% in 2008. While the gain in this sector has been gradual, the private sector has seen a far more dramatic shift in women participation. The proportion of women employees in the private sector has risen from 27% to 47% in the span of ten years, with most of the gains taking place in the last five years.
While employment figures for Kuwaitis do not reflect the general slowdown in economic activity seen in 2008, mainly due to the structure of the labor force and stability in public sector employment, the drop in the expatriate labor force does. Still, the drop was mostly limited to 'domestic workers' (household maids and drivers) at over 43,000 jobs and was a reflection of the government's push to deal with illegal residents who have violated the terms of their residency and work permits.
Another notable change in 2008 was a notable slowdown in employment growth of expatriates in the private sector, where they are predominantly employed. Despite the relatively few expatriates in the public sector, hiring has seen a notable rise in recent years. In 2008, public sector employment among non-Kuwaitis rose by over 8,000, accounting for a fifth of total new jobs in the economy if the domestic sector is excluded.
Overall, the total labor force in Kuwait was flat in 2008 at 2.05 million, registering a small 0.2% decrease. While outside the domestic sector growth remained positive at 2.6%, it was still the slowest growth in eight years.
The services industry employs more than two thirds of the labor force, most of it in the community, social and personal services (includes government). The wholesale and retail trade and restaurants sector is also a major employer, with over 15% of the country’s workforce.
A breakdown of the top ten largest professions shows that most new jobs for Kuwaiti nationals were among clerks and secretaries, accounting for 88% of the net gain. This segment represents over a third of all jobs held by Kuwaitis. The occupational group to see most gains was 'engineers', capturing 10.7% of the net gain.
In more general terms, Kuwait's population mirrored the slowdown seen in employment, with growth slowing to 1.2% from an average of 7% over the previous five years. While the growth in the population of Kuwaiti nationals remained relatively stable, the expatriate population grew by a mere 0.4%, the slowest rate in eight years. The total population of the country stood at 3.44 million at the end of 2008. Nearly 1.1 million or 31.6% are Kuwaiti nationals with the remaining 2.34 million being expatriates.
Among non-Kuwaitis, the population figures reveal sharp drops within the younger age groups, especially among men aged 20-30. This group alone witnessed a 33,000 net decrease.
Meanwhile, most other age groups among expatriates continued to see positive growth, though there was a marked slowdown from prior years. Overall, the number of working age expatriates in Kuwait declined by 4,800 during 2008. This compares with average increases exceeding 148,000 a year during the last five years.
Among Kuwaitis, population figures are far more stable due to the absence of the element of migration. In 2008, the increase in working age Kuwaitis exceeded 22,000 for the first time ever. This figure has risen from around 15,000 ten years ago and represents the minimum number of jobs that must be created for nationals every year. In the past five years, the Kuwaiti economy created an average 87,000 new jobs a year, excluding domestic workers’ jobs. Most of those were of course in the private sector. So clearly, there is no problem of job creation but rather one of matching the skills and education of the labor force to the economy’s work requirements. This should be the focus of future labor policies and reforms.