Major challenges in the Lebanese labor market not only include high unemployment rates, but poor working conditions as well. Regulation of, and investment in, the Lebanese labor market are seriously lacking. The outcome is an increasingly low skilled labor force with minimal social protection stuck in a ‘downward spiral’ towards increasingly dire working conditions. While the absence of decent work is not new to Lebanon, the addition of hundreds of thousands of largely low skilled Syrian workers is exacerbating an already fragile situation.
[pullquote]While the absence of decent work is not new to Lebanon, the addition of hundreds of thousands of largely low skilled Syrian workers is exacerbating an already fragile situation[/pullquote]
Over the past decade, there have been shifts in the distribution of employment and productivity. A decrease in the share of employment in agriculture has been matched by an increase of employment in services, transport and trade, along with a decrease of productivity in the services and industrial sector, preventing the creation of new and decent jobs. The low level of labor demand is a significant contributor to unemployment. There is no incentive for employers to invest in high productivity and technological innovations. There is all the incentive to invest in services and construction, where you have access to an unlimited number of low waged, mostly migrant workers, and — today — an unlimited number of Syrian workers. This is creating circumstances where you have job demand based on low skills.
While Lebanon is a country that prides itself on having high levels of education and high quality higher educational institutions, limited opportunity for good jobs pushes many skilled young Lebanese to emigrate, which also contributes to the deskilling of the labor market.
The absence of labor market governance is also leading to worsening working conditions. As of 2007, when the most recent data available was compiled, 48 percent of the Lebanese workforce was informally employed — meaning workers lacked contracts, access to the National Social Security Fund (NSSF) or both. This figure must have substantially increased in the past seven years. If one only looks at the number of strikes among both the public and private sector workers, it is easy to realize the level of discontent among the Lebanese workforce. Recent strikes included electricity workers, contracted teachers and bank employees, among others. Most strikes relate to the working relationship (i.e temporary workers and irregular contracts), wages and access to social security. Here, however, it should be noted that workers in the informal economy are not represented by labor unions, and therefore have no means to give voice to their concerns and demands.
[pullquote]Overall unemployment in Lebanon stands at around 9 percent, but youth unemployment is around 24 percent[/pullquote]
For a young woman or man in Lebanon, the problem begins far before she or he enters the labor market. The educational system is fraught with inequalities, giving urban youth from private schools far better opportunities. Overall unemployment in Lebanon stands at around 9 percent, but youth unemployment is around 24 percent. Young women and men from poorer rural backgrounds have a lower completion rate of primary education, less access to private schools, and lower rates of university enrollment than students from more advantageous socioeconomic backgrounds. Moreover, when it comes to whether you find a job after education, who you know will make a difference in finding a job or not. This nepotism — locally referred to as wasta — and the resulting inequality in access to opportunity is a factor which frustrates many Lebanese youth, either discouraging them from entering the labor market or encouraging them to migrate abroad.
Moreover, Lebanese companies are not investing in training. Out of 142 countries ranked in the World Economic Forum’s 2012 Global Competitiveness Index, Lebanese employers ranked 42nd in terms of satisfaction with the education system, but only 98th in terms of their investment in employee development. This confirms the assertion that the private sector is increasingly investing in low skills.
However, the private sector needs to have a stronger role in skills development in Lebanon, and to work with the government to find solutions to the common concerns of skills development. For example, vocational schools have a certain stigma in Lebanon as a choice of absolute last resort — a destination for high school dropouts. One way of addressing this would be linking vocational training more directly to actual existing jobs. This requires a partnership between employers and the government in the provision of training. One successful example in the region is Jordan, where the Greece based construction giant CCC established a governmental vocational school focused specifically on training welders whom they would subsequently hire.
The ILO survey also revealed that Syrian refugees work for extremely long hours, and are mostly daily wage workers with limited skills and education
[/pullquote]The refugee crisis
The Syrian refugee crisis has undoubtedly negatively affected the Lebanese labor market by strengthening this downward spiral of low working conditions mostly affecting low skilled Lebanese. In 2013, the International Labor Organization (ILO) conducted a survey revealing that Syrian refugees face harsh working conditions. While the sample size was limited, it was clear that they earn much less than the Lebanese legal minimum wage. Of the 404 working Syrian refugees interviewed, 78 percent earn less than LBP 600,000 ($400) per month, below the minimum wage of LBP 675,000 ($450).
The ILO survey also revealed that Syrian refugees work for extremely long hours, and are mostly daily wage workers with limited skills and education. It is important to note that Syrian refugees are concentrated in geographic areas like the North or the Bekaa, which have always faced social exclusion and limited job opportunities, putting pressure on social cohesion between Syrian refugees and their Lebanese host communities. Therefore, the labor market impact of Syrian refugees is exacerbating pre existing labor market challenges and contributing to its deterioration as employers (both from large formal or small informal enterprises) race to take advantage of the increasing supply of cheap Syrian labor.
It is undeniable that Lebanon’s labor market needs an expanded productive base to create better jobs, and this requires a comprehensive mix of policies including macroeconomic, industrial and social policies.
However, if we focus on labor market governance separately, there are three critical elements to be considered.
First is strengthening the role of labor, the Ministry of Labor and related labor market institutions, such as the NSSF and the National Employment Office. If these institutions are empowered with the qualified human resources, budgets and decisionmaking authority to push through the needed reforms, they will be able to: improve oversight of working conditions for better compliance with labor standards; provide services to job seekers, including skills development and links with available jobs; and secure sustainable, adequate and fair social protection to workers. In fact, ILO research in other parts of the world indicates that investing in working conditions, safety protection and training leads to increased employee satisfaction and consequently higher productivity and enterprise performance and growth.
A second important area is the strengthening of statistics in order to analyze the labor market. Lebanon has a weak statistical base despite concerted efforts by the international community, including the ILO, to support it. For example, regular labor force surveys, which include migrant workers and refugees, are a fundamental step towards informing policymaking and monitoring progress and the impact of policies over time.
[pullquote]There can be no solutions or consensus without transparent participatory social dialogue[/pullquote]
A third area is social dialogue, which includes all types of negotiation and consultation among representatives of the government, employers and workers on issues of common concerns. The increasing labor strikes today relate to a breakdown in this relationship that is fraught with irregular employment patterns even among well known employers and limited trust between workers and employers. The government on the other hand is unable to play an effective role in the face of weak institutions, outdated laws and a political impasse, which has put a freeze on passing the necessary laws, regulations and policies through Parliament.
Indeed, this deadlock in dialogue reflects the wider national political climate. However, there is an opportunity to move beyond this and focus on the immediate needs of workers and enterprises alike. There can be no solutions or consensus without transparent participatory social dialogue, and some concessions by the relevant institutions, to pave the way for a commitment towards promoting decent work in Lebanon — and the time is now.