The Dr. Muhammad Yunus-led interim government is facing growing pressure to address Bangladesh’s escalating unemployment crisis, which economists and labor market experts have identified as the most pressing economic and social challenge confronting the nation.
With joblessness soaring amid industrial slowdown, waning private investment, and macroeconomic instability, experts warn that failure to tackle the issue swiftly could fuel social unrest and deepen the country’s economic malaise.
According to the latest Labour Force Survey, Bangladesh’s unemployment rate has risen to 5.7%, but independent estimates suggest the real figure, including underemployment and discouraged workers, could be significantly higher - particularly among the youth and university graduates.
Youth Unemployment Hits Alarming Levels: “Youth unemployment is nearing crisis proportions,” said Dr. Selim Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM). “We’re seeing thousands of university graduates struggling to find work, while the informal sector is saturated and formal sector hiring has almost stalled. This is not just an economic issue - it’s a political time bomb.”
Dr. Raihan noted that while the interim government cannot be expected to fix structural problems overnight, it must at least signal strong intent by announcing targeted short-term employment programs and clearing the bottlenecks in private sector activity.
Industry Closures and Investment Drought: A wave of industrial closures in the past year, triggered by power shortages, gas price hikes, and reduced domestic demand, has contributed significantly to job losses. Major export-oriented factories in the RMG, jute, and leather sectors have downsized or shuttered operations.
Dr. Nazneen Ahmed, former Country Economist of UNDP Bangladesh, said, “The private sector is too insecure to invest. Without restoring investor confidence and ensuring stable utility supply, no employment recovery is possible. The interim government must prioritize dialogue with industries and remove regulatory bottlenecks immediately.”
She also pointed to the significant decline in capital equipment imports and stagnation in private sector credit growth, warning that unless production capacity expands, job creation will remain sluggish.
Migrant Labor Demand Slowing: Remittance inflow remains stable, but the overseas labor market is also becoming tighter. Fewer job opportunities abroad have led to increased returnee migration, adding more pressure to an already strained domestic labor market.
“Gulf economies are shifting towards automation and localization, which means fewer low-skill job opportunities for Bangladeshis,” said Dr. Tasneem Siddiqui, Chairperson of the Refugee and Migratory Movements Research Unit (RMMRU). “The interim government needs to focus on upskilling and diversifying overseas employment portfolios - this cannot wait.”
Informal Sector Under Strain: The informal sector, which employs over 85% of the workforce, is now overburdened. Wage rates in informal jobs have stagnated or declined, making it harder for workers to meet basic living costs amid high inflation.
“A rickshaw puller or roadside vendor is now earning less in real terms than two years ago,” said Dr. Rushad Faridi, economist at the University of Dhaka. “The government must look at emergency public works programs to provide at least temporary relief and incomes to the vulnerable.”
Government’s Response and Public Expectation: The Yunus-led government has so far emphasized institutional reform, anti-corruption drives, and economic stabilization. However, public patience is wearing thin, especially among young people who feel left behind by the recovery narrative.”Jobs, not just justice, must be at the center of the transition,” said labor rights activist Taslima Akhter. “We want accountability, yes, but we also need to eat and work. Job creation must be part of any reform package.”
Dr. Yunus, in a recent address, acknowledged unemployment as a “national emergency” and promised to launch a youth entrepreneurship scheme and expand vocational training initiatives. However, experts say these plans need proper funding, swift execution, and alignment with market needs to have any real impact.
Call for Coordinated Action: Experts stress that tackling unemployment requires a comprehensive national plan involving ministries of finance, education, industry, labor, and expatriates’ welfare.”Bangladesh needs a coordinated jobs strategy - one that goes beyond rhetoric and delivers real results,” said Dr. Hossain Zillur Rahman, Chairman of the Power and Participation Research Centre (PPRC). “Without employment, economic recovery will be hollow, and social peace will remain fragile.”
Actually, Bangladesh is facing a renewed surge in joblessness, with the number of unemployed individuals increasing by 150,000 in the span of a single year. According to the latest Labor Force Survey (LFS) released by the Bangladesh Bureau of Statistics (BBS) on Sunday, the number of unemployed persons in the country stood at 2.7 million at the end of 2024, compared to 2.55 million in 2023.
This troubling trend has raised fresh concerns about the country’s economic stability and job creation capacity, particularly at a time when industrial production is sluggish, and investment remains weak due to multiple macroeconomic challenges.
New Method Reveals a Deeper Crisis: This rise in unemployment comes with a change in how BBS calculates joblessness. For the first time, the BBS has used the methodology prescribed by the 19th International Conference of Labour Statisticians (ICLS), which offers a more comprehensive definition of unemployment. The 19th ICLS method considers individuals engaged in productive work that does not result in market-based goods or services as unemployed. This means many previously classified as employed-especially in informal and unpaid family work-are now reclassified as unemployed.
According to this method, a person is considered unemployed if they did not work for even one hour in the seven days before the survey and were available for work during that period and the subsequent two weeks. Additionally, those who actively searched for paid employment or self-employment in the past 30 days are also counted as unemployed.
Using this method, BBS estimates that 2.7 million people were unemployed in the final quarter (October-December) of 2024, resulting in an unemployment rate of 3.65 percent.
An alternative calculation using the older 13th ICLS method-which is still used for global comparisons-puts the number of unemployed at 2.62 million. However, experts believe the updated methodology gives a clearer picture of the country’s true unemployment challenge.
Youth and Women Disproportionately Affected: The BBS report highlights that unemployment is particularly acute among the youth and women. Among the 58.9 million people in the labor force, 11.44 million are women, but a significant portion remains underemployed or unemployed due to structural barriers, social norms, and fewer opportunities in both the formal and informal sectors.
Youth unemployment remains another growing concern. With nearly 30% of Bangladesh’s population aged between 15 and 29, limited access to decent jobs, lack of skill alignment with industry demands, and weak entrepreneurship ecosystems continue to make it difficult for young people to secure employment.Economists warn that if the youth bulge is not harnessed properly, it could result in widespread social frustration and increased economic dependency.
Breakdown of the Labor Force: According to the BBS’s data for the October-December 2024 quarter:Total labor force: 58.9 million, Men: 47.49 million, Women: 11.44 million, Total employed: 56.2 million, Men: 45.57 million, Women: 16.3 million.
Interestingly, the number of employed women exceeds their official participation in the labor force, which may reflect misclassification or part-time informal work. Analysts suggest that this inconsistency may need clarification in future surveys.
Meanwhile, the population outside the labor force-including students, the elderly, homemakers, the chronically ill, and others unwilling or unable to work-stood at 62.81 million at the end of December. This segment is not counted as unemployed despite being jobless.
Structural and Economic Challenges behind Rising Unemployment: The uptick in joblessness comes at a time when Bangladesh is struggling with several economic headwinds. The decline in industrial output, power shortages, falling private sector credit, and sluggish foreign direct investment are contributing to a contraction in job opportunities across sectors, especially in manufacturing and services.
Additionally, the informal sector, which employs around 85% of the workforce, has not been resilient enough to absorb the excess labor created by job losses in formal industries. According to labor economists, without targeted stimulus and structural reforms, the country will find it difficult to create the kind of high-productivity jobs necessary to meet its development goals.
Dr. Nazneen Ahmed, Country Economist at UNDP Bangladesh, said, “We are seeing a rise in disguised unemployment and underemployment. Many people are working just enough to be counted as employed, but their incomes are not sustainable.”
Experts Call for Urgent Policy Action: In light of the growing job crisis, labor market experts and economists are calling for immediate government intervention. Some of their recommendations include:
Expanding skills training and vocational education, particularly for youth and women: Revitalizing the SME sector, which can be a major source of employment if given proper access to finance and market linkages. Investing in green and digital sectors, which have high employment potential
Promoting formalization of informal jobs to ensure better job security and benefits: Reforming labor market data collection to align more closely with international standards and economic planning needs. The government’s 8th Five-Year Plan envisions creating more than 11 million jobs by 2025. However, given the current trend, the realization of this goal appears increasingly uncertain.
