NEMPLOYMENT has always haunted Bangladesh, but in recent years its character has changed in troubling ways. It is no longer only about people who cannot find work at all. Increasingly, it is about those who do work but in ways that neither match their qualifications nor fully utilise their skills. The problem has shifted into what economists describe as pseudo-unemployment, and it has quietly spread into an epidemic. The country鈥檚 official statistics suggest only a few million people are unemployed, but when one looks beneath the definitions, the real crisis comes into view.
Every year, about two million young people enter the job market. Some do not find work at all, others accept positions far below their skill levels, while many remain trapped in jobs that fail to pay a living wage. At the same time, private investment, the engine of employment creation, has slowed to a crawl. Business confidence is weakened by the dollar crisis, the rising cost of imports and political uncertainty. Bank credit to the private sector has stagnated, and foreign investment has shown little sign of growth. The connection is straightforward. When investment falters, jobs do not appear. When jobs do not appear, unemployment deepens.
The statistics paint a worrying picture. Between 2013 and 2022, the country鈥檚 working population grew by an average of 1.5 per cent annually. Yet employment growth during the same period was only 0.2 per cent. The labour supply has expanded while the demand for labour has stagnated. The result is a widening pool of underemployed or pseudo-unemployed individuals whose work adds little to real productivity. Many graduates now find themselves working in occupations far below their qualifications, wasting the human capital that higher education was supposed to create.
The Labour Force Survey of the Bangladesh Bureau of Statistics for 2024 revealed that the official number of unemployed rose from 2.49 million in 2023 to 2.66 million in 2024. On paper, this appears as a modest rise of 170,000 within a year. Yet these figures are deceptive. They obscure the millions of workers who fall into categories of underemployment, shadow employment, or partial employment. To call such people 鈥榚mployed鈥� is to ignore that their labour is not being fully utilised, and that their incomes do not provide security or dignity. The country continues to mistake statistical employment for real employment.
This problem is compounded by a lack of decent work. The vast majority of jobs that exist are concentrated in the informal sector. These jobs are insecure, poorly paid, and without protections. Even during the years when GDP growth was celebrated as one of the fastest in the world, employment did not grow in proportion. The so-called miracle of high growth was in truth a mirage, hiding the reality that the benefits were not translating into opportunities for the youth. Employment stagnated while the labour force swelled, producing frustration and instability.
The heart of the problem lies in investment. The monetary policy for 2024鈥�25 set a target of 9.8 per cent growth in private sector credit, but the actual growth reached only 6.4 per cent. This was the sharpest slowdown in recent memory, and in response, the new monetary policy reduced the target further, to 7.2 per cent by December 2025 and 8 per cent by mid-2026. These figures reflect the hard truth that entrepreneurs are reluctant to borrow in an environment of high interest rates, volatile exchange rates, and uncertain policies. Without credit flow, investment contracts. Without investment, there are no new factories, no new businesses, and no new jobs. The entire cycle of employment creation stalls.
Small and medium enterprises suffer the most under these conditions. Lacking access to affordable credit, many SMEs have been forced to reduce production or shut down entirely. This has ripple effects. Families lose income, consumption falls and domestic demand weakens. The cycle becomes self-reinforcing. Declining demand discourages further investment, and declining investment perpetuates unemployment.
The political climate adds another layer of uncertainty. Investors, both domestic and foreign, hesitate to commit capital when the rules of the game are unclear. Without predictable policies, contracts and guarantees of stability, businesses prefer to wait. The cost of this hesitation is borne by the youth who crowd into the job market only to find doors closed. Political stability, sound macroeconomic management, and reliable access to energy are not just technical concerns. They are the foundations upon which employment depends.
At the centre of this picture is a wasted demographic dividend. Bangladesh鈥檚 working-age population has grown rapidly, and for a time, this was celebrated as the country鈥檚 greatest asset. But an asset unused becomes a liability. Educated youth are entering the labour force in unprecedented numbers, yet their potential is being squandered. They either remain unemployed or drift into pseudo-employment where their education brings little value. This mismatch between capacity and opportunity corrodes productivity at the national level.
It is important to remember that employment is not only about having a job but about the quality of that job. Work that fails to pay a living wage, that offers no security, that does not match a worker鈥檚 skill, or that keeps them trapped in low productivity activities cannot be considered real employment. To continue counting such jobs as signs of progress is to fool ourselves with illusions.
Breaking out of this trap requires a rethinking of policy priorities. Credit and investment must be revived, not stifled. Monetary policies must balance inflation control with the need to fuel private sector activity. Interest rates that remain intolerably high choke off borrowing, innovation, and expansion. At the same time, education must be reoriented toward employability. An education system that produces graduates without relevant skills only feeds the reservoir of pseudo-unemployment. Coordination between universities and industries, as well as a stronger focus on technical and vocational education, is essential.
Above all, policymakers must face reality with honesty. The country cannot continue to celebrate growth statistics while ignoring the jobless reality that millions face. Development is not measured by GDP alone but by how many people can secure dignified, productive work. Without that, progress remains an illusion.
Unemployment, both real and pseudo, is not just an economic issue. It is a social and political fault line. Frustrated youth, denied opportunities, are at risk of disillusionment, despair and unrest. Families burdened with unemployed members strain under financial and emotional pressures. The broader society becomes less stable. If unaddressed, these pressures will not only slow economic growth but threaten the cohesion of the nation itself.
Bangladesh stands at a crossroads. The choices made now will determine whether the youthful population becomes the foundation of prosperity or the source of instability. A future of secure employment, sustainable growth and social stability is possible, but only if investment is revitalised, education is transformed and the illusions of pseudo-employment are abandoned. Otherwise, the demographic dividend will decay into a demographic disaster, leaving behind a generation betrayed by promises that never translated into reality.
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HM Nazmul Alam is a Dhaka-based an academic, journalist and political analyst.