Introducing the Job Seeker Rate
I am in Oman for the holidays. The talk around town is the economy, and discussions about economic policy. I have mostly listened to the proposals, forecasts, and opinions. Recently, in a formal discussion I was finally asked about my opinion on what I would propose for the Omani economy. Based on the discussions I have heard, I recommend more economic education.
One area that has received attention is the labor market and the introduction of the Job Seeker Rate (unemployment rate).
Read my report on the Omani Labor Market
To evaluate the labor environment, economists have defined several measures to assess the health of the labor market. One of those measures is internationally referred to as the unemployment rate. Historically, Omanis have measured the labor market shortage by quoting the number of people seeking jobs (Job Seekers). However, this number is misleading, because it does not tell us anything about the overall number of people in the labor force. A better measure of the number of people seeking jobs is to measure it relative to all those in the labor force. As the economy grows so will the number of job seekers, by examining the ratio economists can compare across economies and control for the size of the labor market.
Two numbers are needed to calculate the unemployment rate. The first is the number of job seekers (unemployed) and the second is the number of employed individuals. The number of employed is easy to find through NCSI.
Data Sources NCSI https://data.gov.om/byvmwhe/labour-market?accesskey=ixxdqxe
According to the latest reported data there are currently 2,213,438 employed individuals. That includes both Omani and Expat/Non-Omani workers. The numbers on unemployed are harder to find because of the way Oman defines the unemployed. To be considered unemployed you must actually have to be considered as a job seeker. In the United States it is defined as having searched for a job in the past 4 weeks and that you are not currently enrolled as a student. (This is a simplified version of the definition, if you want to learn more reach out for a more personalized discussion).
Not having a job is not the same thing as being a job seeker. The distinction in the wording is even more important in Oman because we have taken the position that the term job seeker is a more dignified term relative to unemployed (See below for local context of terms). It signifies that the individual is in fact exerting effort and attempting to find a job, it is more active while unemployed is a passive definition. More importantly, it is actually an accurate descriptor of how we calculate the Job Seeker Rate.
Once we have the number of job seekers we can calculate the following ratio.
The sum of jobs seekers and employed is referred to as the Labor Force. The current debate is about the actual number of job seekers. While there is debate about the number of job seekers, we know that a recent report stated that job seeker rate is 2.8%. Also, a 2019 estimate from the World Bank puts the rate at 3%. This can be solved as follows.
Solving for X, I find that the number of job seekers to be 63,762. What is most important is measuring the trend over time and comparing the Omani numbers to other countries. According to the World Bank estimates, the job seeker rate is at its lowest since 1991. For international comparison, the current U.S unemployment rate is 3.7%.
https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?end=2019&locations=OM&start=1991&view=chart
If you are interested in learning more about the social context of using the term job seeker vs unemployed you can view this video of His Majesty Sultan Qaboos introducing the term.