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Cheap or expensive labor?

Labor in Ethiopia is cheap. Or is it? It is true that Ethiopia is endowed with a large pool of manpower. Nearly 70 percent of the labor is aged less than 30 years old, indicating that a majority of our workforce is at a productive age. Unemployment is at its highest level, and the country is not in short of manpower who can fill vacant employment positions. These days, university graduates would do any job that can earn them money and occupy them full time. It’s just much better than staying at home, fully dependent on parents, assuming of course these are economically capable to continue supporting their fully grown children. We’ve recently interviewed a girl who has graduated from the university about six month ago in the field of construction management for a receptionist position. When asked why on earth she chose to apply for a receptionist position although she had the educational qualifications to work in her field of study, she tried in vain convincing us that she was interested in working in our company. But when probed further, she just confessed that her application for the position was made out of desperation for employment. This is the story of thousands of our graduates today. And if they are lucky enough, they may land themselves on a job that in no way matches their qualifications.

When it comes to employment, two completely different views are reflected from the side of employers and that of the prospective employees. It’s like in agriculture where farmers complain they do not have market for their produce, and traders/exporters/processors complain they do not have enough supply and are forced to import from abroad. In the case of employment, employers complain that they are unable to find qualified employees. Prospective employees complain that they are unable to find employers who are willing to hire them despite of their qualifications. But what is a qualified employee? Is it someone who has a degree plus years of work experiences? You might say yes. I say that, even if have people have degree and have years of experiences, they may still not be qualified for a particular job. I think the key question is whether people are productive enough or not. Productivity in my view, does not linearly depend on one’s degree or years of experiences. True that one needs some level of knowledge in the field of their work. But if that knowledge is not put into productive use, it is useless.

Putting the weak educational system of the country, I think the biggest reason why employers complain about the weak qualification of our graduates relates to the weak work culture that exists among the youth (and also the non-youth of course). Related to this, I would like to share a remark made by athlete Haile Gebreselassie in one of his interviews about the cheapness of Ethiopian labor. He boldly stated that if we think that Ethiopian labor is cheap, we are fooled. In his opinion, Ethiopian labor is the most expensive. On should not consider only the remuneration paid to employees to make the claim that labor in this country is cheap. How about the opportunity cost incurred from a job that was poorly done and was delivered late? All of the revenue lost from unproductive employees should be taken into account as well. All the time and revenue lost in lengthy tea breaks, in unnecessary chatters, in unnecessary meetings, in unnecessary conspiracies, in delaying work deliveries, and from careless and irresponsible behaviors should all be taken into account. I completely agree with Haile! Labor in Ethiopia is indeed not as cheap as we normally think it is.

Contributed by Tsion Taye
Contributed by Tsion Taye