Bangladesh is sitting on a time bomb of unemployment. The Bangladesh Bureau of Statistics (BBS), in its final Labour Force Survey 2024, has given us numbers that may appear reassuring at first glance but collapse under scrutiny. According to the report, the number of unemployed people in the country rose from 2.46 million in 2023 to 2.62 million by December 2024, an increase of 160,000 within a year.
The survey says that only 2.62 million out of a population of 180 million are unemployed. On paper, that seems manageable. But peel away the definitions, the statistical tricks, and the ground reality, and you find an employment crisis that is eating away at the very foundation of our economy.
The most alarming finding is that 29% of unemployed youth between the ages of 15 and 29 are university graduates. The very segment of the population that should be propelling the country forward is being left stranded.
Of the total unemployed, 13.54% hold bachelor’s degrees and 7.13% have higher secondary qualifications.
These numbers expose a stark mismatch between our education system and our labour market.
Higher education in Bangladesh has, for years, been more about distributing degrees than imparting relevant skills.
Our universities churn out graduates who can write exam papers but cannot meet the practical demands of modern industry. The service and industrial sectors expect a workforce skilled in technology, problem-solving, communication, and adaptability.
Instead, they get degree-holders with limited technical know -- how and little exposure to real workplace challenges. The inevitable result is graduates who find themselves unemployable despite their education.
The situation is compounded by stagnant investment. For years, the economy has been running on inflated narratives of GDP growth while employment creation has remained an afterthought. Bank loan interest rates have been raised to curb inflation, but the unintended consequence is that the cost of capital has increased, discouraging investment.
In fiscal year 2024-25, the target for credit growth in the private sector was set at 9.8%. The reality was a paltry 6.4% -- the lowest in recent memory. For the new fiscal year 2025-26, the target has been lowered further, to just 7.2% by December and 8% by June 2026.
High interest rates mean entrepreneurs borrow less, industries stall, and new jobs fail to appear. When credit growth slows, investment withers, and when investment withers, job creation dries up.
What do the numbers say?
The BBS statistics further hide the depth of the problem. The definition of unemployment it follows, is taken from the International Labour Organization (ILO). Anyone who works at least one hour a week in exchange for wages is not considered unemployed. A man who tends a few chickens for family consumption is also not considered unemployed. But in Bangladesh, one hour of work a week is not a livelihood. Nor is poultry-raising in the backyard a substitute for gainful employment. In developed countries, where welfare systems provide unemployment benefits, such definitions may work. Here, they distort the picture.
The reality is that many young people -- graduates and otherwise -- are either underemployed, working in jobs far below their qualifications, or trapped in part-time, irregular, or insecure work. They are not unemployed in official records, but they are functionally unemployed in real life.
This is the epidemic of pseudo-unemployment. It is the condition where a person is technically employed but contributes little to actual productivity, either because the job requires far fewer skills than they possess, or because the employment itself is precarious and underpaid.
A university graduate selling mobile phone SIM cards on the street is not “unemployed” in the eyes of BBS. Graduate’s years of education, talent, and potential are being wasted in an occupation that adds little to the nation’s productivity.
The World Bank, citing ILO data, has noted that while Bangladesh’s working population grew at an average of 1.5% per year between 2013 and 2022, employment growth was only 0.2%. This means that the number of people entering the labour force far outpaced the creation of new jobs, swelling the ranks of the underemployed and pseudo-unemployed.
The consequences are not just economic. The rise of unemployment and pseudo-employment is reshaping society. For the young, years spent in education lead not to opportunities but to despair. Graduates find themselves waiting years for a chance at a government job, which remains the ultimate dream for many because of its stability and status.
Yet the number of government posts is limited, the recruitment process is slow and convoluted, and competition is fierce. Meanwhile, private sector jobs are often poorly paid, lack security, and come with social stigma.
The result is a generation stuck in limbo -- over-educated for the available work, under-utilized in the jobs they can find, and demoralized by the shrinking horizon of opportunity.
Unemployment does not just empty pockets; it corrodes the psyche. Young people facing prolonged joblessness are more vulnerable to depression, addiction, and antisocial behaviour.
Families struggle under the financial and emotional burden of supporting unemployed members. The state loses not only economic output but also the social cohesion that comes from people believing they have a stake in the system. An idle, disillusioned youth bulge is a recipe for unrest.
Bangladesh cannot afford this. Our much-vaunted demographic dividend -- the idea that a large youthful population would drive economic growth -- risks turning into a demographic nightmare. Youth is an asset only if it is employed productively. Otherwise, it becomes a liability. If timely steps are not taken, the dividend will slip through our fingers, leaving behind a disenchanted generation and a stalled economy.
The education system
Part of the problem lies in the education system. Universities remain fixated on theoretical knowledge and rote memorization, while industries cry out for practical skills. Students graduate with degrees that carry little weight in the job market.
There is little emphasis on internships, apprenticeships, or industry-academia collaboration. Technical and vocational education remains underdeveloped, stigmatized, and neglected. Many graduates only realize after completing their degrees that what they have learned has little relevance to actual work. By then, valuable years have been wasted, and frustration sets in.
At the same time, investment is shackled by political uncertainty, energy shortages, and bureaucratic red tape. Small and medium enterprises (SMEs), which are the backbone of job creation in many economies, struggle for survival.
Without adequate access to credit, many SMEs are forced to scale down or close altogether. This not only destroys existing jobs but also discourages entrepreneurship, which could otherwise have been a vibrant source of employment.
The interplay between these factors creates a vicious cycle. Weak investment leads to fewer jobs. Fewer jobs mean higher unemployment and pseudo-employment. Rising joblessness depresses demand in the domestic market. Lower demand discourages further investment. The cycle repeats, dragging the economy down.
Breaking this cycle requires bold and coordinated action.
First, education must be aligned with the needs of the labour market. Curricula should prioritize skills that are in demand, from digital literacy and technical expertise to communication and problem-solving.
Universities must forge partnerships with industries to create opportunities for internships, apprenticeships, and hands-on training. Technical and vocational education must be mainstream and made attractive, not treated as a second-class option.
Second, investment must be revitalized. Monetary policy should aim not only at controlling inflation but also at sustaining credit growth for the private sector. Interest rates must be kept at tolerable levels, and access to loans simplified, particularly for SMEs.
An investment-friendly environment, free from political uncertainty and bureaucratic obstacles, is essential. Energy shortages must be addressed if industries are to thrive.
Third, the obsession with government jobs must be reduced. Students need to be encouraged to view the private sector as a viable and respectable career path. This requires improving the pay, working conditions, and social recognition of private sector jobs.
Entrepreneurship should be promoted through training, tax incentives, and easy access to credit. The SME sector, in particular, has the potential to absorb a large portion of the labour force if given the right support.
Finally, policymakers must acknowledge that pseudo-unemployment is as dangerous as unemployment itself. It wastes human capital, depresses productivity, and creates an illusion of employment that masks the depth of the crisis. Accurate, transparent, and context-sensitive statistics are essential for understanding the real scope of the problem and for devising effective solutions.
Unemployment in Bangladesh is no longer just an economic challenge. It is a social and political time bomb. The gap between education and employment, the stagnation of investment, the epidemic of pseudo-unemployment, and the frustration of the youth are converging into a crisis that threatens the very stability of the country. To treat it with complacency is to court disaster. To confront it with urgency, imagination, and honesty is to give Bangladesh a chance to harness its human capital and secure a sustainable future.
If we fail, our educated youth will remain idle, our demographic dividend will be squandered, and our economy will limp along on the crutches of inflated statistics and wasted potential. If we succeed, we can turn this crisis into an opportunity, transforming a frustrated generation into the engine of our national progress. The choice lies before us, and the time to act is now.
HM Nazmul Alam is an academic, journalist, and political analyst based in Dhaka, Bangladesh. Currently he is teaching at IUBAT. He can be reached at [email protected].
