A Generation Looking for Work, an Economy Losing Jobs

For millions of Bangladeshis, anxiety over employment now comes from two directions. A young graduate leaves university wondering how long it will take to secure a decent job. Somewhere else, an experienced factory worker finishes a shift wondering whether the factory itself will survive another year. One is waiting to enter the labour market; the other is struggling not to be pushed out of it. Together, they reveal one of Bangladesh’s most serious economic challenges: the economy is not creating enough secure and productive employment.

The problem is deeper than the headline unemployment rate suggests. According to the data of the Bangladesh Bureau of Statistics analysed by IMF, the overall unemployment was 3.69 per cent and youth unemployment was 8.49 per cent in 2024. Unemployment, however, was about 25 per cent for the highly educated youth. The difference is quite pronounced. Bangladesh has expanded access to education, but economic transformation has not generated enough opportunities to absorb its growing pool of educated workers.

A low overall unemployment rate can therefore conceal widespread informality, underemployment, skills mismatch and prolonged job searches. For a country hoping to benefit from its demographic dividend, this is a warning that cannot be ignored.

The industrial side of the economy offers little comfort. In June 2026, private-sector credit growth dropped to the lowest level in decades, at 4.47 per cent. Businesses have become hesitant to borrow to expand and banks have become hesitant because of financial-sector weaknesses. The slowdown is the result of elevated financing costs, weak investment interest and economic uncertainties.

Energy insecurity has made the situation worse. Gas-dependent industries, including textiles, steel, ceramics and paper sectors, have repeatedly faced supply shortages and low pressure. Unreliability of energy sources for the factories lead to increase in production cost, disruption of production and inability to meet delivery schedules. If a business is not sure about energy, then it will definitely have a hesitation on investing in new machinery. And without expansion, there will be little incentive to recruit. The chain is straightforward: energy insecurity weakens production, weaker production discourages investment, and weaker investment limits job creation.

For decades, the ready-made garment industry has shown the transformative power of labour-intensive industrialisation. But the next phase of development cannot depend overwhelmingly on one export sector. Agro-processing, pharmaceuticals, leather and footwear, light engineering, electronics, logistics, ICT-enabled services and modern manufacturing must become stronger sources of employment. So, small and medium-sized enterprises (SMEs) also deserve greater attention. Large factories dominate public discussion, but SMEs collectively employ a huge number of workers. When credit tightens, smaller firms are often among the first to suffer.

Another structural problem is the mismatch between education and the labour market. Universities produce graduates with academic qualifications, while employers frequently complain about shortages of practical and technical skills. At the same time, vocational and technical education still suffers from an image problem. To overcome the situation, Bangladesh needs stronger partnerships between universities, technical institutions and industry. Apprenticeships should become more common. Students should receive workplace exposure before graduation, while training programmes should be designed around real market demand in areas such as automation, industrial maintenance, digital services, logistics, healthcare support and advanced manufacturing.

Declining overseas employment is another important part of the equation. More than 9,69,000 Bangladeshis obtained overseas jobs in FY2025-26, around 5 per cent fewer than in the previous year. The decline should prompt a rethink of migration policy. In this age of information and technology, sending more workers abroad is not enough. Bangladesh must focus on sending skilled workers who can earn higher wages. Demand for nurses, caregivers, technicians, welders, machine operators and IT professionals are increasing in many economies. Language training, international certification and destination-specific skills programmes could turn labour migration into a higher-value employment strategy.

At present, employment must become a measurable objective of economic policy. Bangladesh still has the opportunity to turn its large working-age population into an extraordinary economic advantage. But a demographic dividend is not automatic. Without productive work, a young population can become frustrated, financially dependent or increasingly determined to leave the country. A graduate who spends years searching for work loses more than income. A worker who unexpectedly loses a factory job can push an entire household into debt. An entrepreneur who repeatedly faces energy shortages, financing difficulties and policy uncertainty eventually stops thinking about expansion.

These are not separate problems. They are different faces of the same crisis of economic confidence. Bangladesh’s development must therefore move beyond how fast the economy grows. The more important question is what that growth does for people. The country’s greatest economic asset is ultimately not a statistical growth rate, a megaproject or even the size of its foreign-exchange reserves. It is the productive capacity, confidence and skills of its people. If they can find meaningful work and believe tomorrow offers greater opportunity than today, Bangladesh’s demographic advantage can still become one of its greatest strengths. If they cannot, the country may discover that the most expensive resource to lose is not capital, but confidence.