Table of Contents.....Next Section.....Prev SectionEthiopia: Labor Force ~a HREF="/et_00_00.html#et_03_03"

Labor Force

Ethiopia's first and only national census, conducted in 1984, put the population at 42 million, which made Ethiopia the third most populous country in Africa, after Egypt and Nigeria. The census also showed that by l994 Ethiopia's population would reach 56 million. According to World Bank (see Glossary) projections, Ethiopia will have a population of 66 million by the year 2000 (other estimates suggested that the population would be more than 67 million).

The l984 census indicated that 46.6 percent of the population consisted of children under fifteen years of age, which indicated a relatively high rate of dependence on the working population for education, health, and social services. Such a high dependency rate often is characteristic of a country in transition from a subsistence to a monetized economy. Because of limited investment resources in the modern sector, not all the working-age population can be absorbed, with the result that unemployment can become a growing social and economic problem for an economy in transition.

The l988/89 economically active labor force was estimated to be 2l million, of which l9.3 million were in rural areas and l.7 million in urban areas. Estimates of the labor force's annual growth ranged from 1.8 to 2.9 percent.

The labor force's occupational distribution showed that in l990 some 80 percent of the labor force worked in agriculture, 8 percent in industry, and l2 percent in services. These figures had changed slightly from the 1965 figures of 86, 5, and 9 percent, respectively. Thus, while agriculture's proportionate share of the labor force fell, the other two sectors gained. This trend reflects a modernizing society that is diversifying its economy by expanding secondary and tertiary sectors.

Ethiopia: Unemployment ~a HREF="/et_00_00.html#et_03_03"


Generally, it is difficult to measure unemployment in less developed countries such as Ethiopia because of the lack of reliable records and the existence of various informal types of work. However, based on Ministry of Labor surveys and numerous other analyses, a general assessment of unemployment in Ethiopia can be made. According to the Ministry of Labor, the unemployment rate increased 11.5 percent annually during the 1979-88 period; by l987/88 there were 715,065 registered unemployed workers in thirty-six major towns. Of those registered, l34,ll7 ultimately found jobs, leaving the remaining 580,948 unemployed. The urban labor force totaled 1.7 million in 1988/89. The Ministry of Labor indicated that the government employed 523,000 of these workers. The rest relied on private employment or self-employment for their livelihood.

According to the government, rural unemployment was virtually nonexistent. A l981/82 rural labor survey revealed that 97.5 percent of the rural labor force worked, 2.4 percent did not work because of social reasons, and 0.l percent had been unemployed during the previous twelve months. However, it is important to note that unemployment, as conventionally defined, records only part of the story; it leaves out disguised unemployment and underemployment, which were prevalent in both urban and rural areas. For instance, the same rural labor force survey found that 50 percent of those working were unpaid family workers. What is important about unemployment in Ethiopia is that with an expansion of the labor force, the public sector--with an already swollen payroll and acute budgetary problems--was unlikely to absorb more than a tiny fraction of those entering the labor market.

Ethiopia: Labor Unions ~a HREF="/et_00_00.html#et_03_03"

Labor Unions

Young women from a producers' cooperative weave baskets to be sold as souvenirs. Courtsey Food and Agriculture Organization of the United Nations (F. Mattiol)

The 1955 constitution guaranteed the right to form workers' associations. However, it was not until 1962 that the Ethiopian government issued the Labor Relations Decree, which authorized trade unions. In April 1963, the imperial authorities recognized the Confederation of Ethiopian Labor Unions (CELU), which represented twenty-two industrial labor groups. By 1973 CELU had 167 affiliates with approximately 80,000 members, which represented only about 30 percent of all eligible workers.

CELU never evolved into a national federation of unions. Instead, it remained an association of labor groups organized at the local level. The absence of a national constituency, coupled with other problems such as corruption, embezzlement, election fraud, ethnic and regional discrimination, and inadequate finances, prevented CELU from challenging the status quo in the industrial sector. Nevertheless, CELU sponsored several labor protests and strikes during the first decade of its existence. After 1972 CELU became more militant as drought and famine caused the death of up to 200,000 people. The government responded by using force to crush labor protests, strikes, and demonstrations.

Although many of its members supported the overthrow of Haile Selassie, CELU was the first labor organization to reject the military junta and to demand the creation of a people's government. On May 19, 1975, the Derg temporarily closed CELU headquarters on the grounds that the union needed to be reorganized. Furthermore, the military authorities asserted that workers should elect their future leaders according to the aims and objectives of Ethiopian socialism. This order did not rescind traditional workers' rights, such as the right to organize freely, to strike, and to bargain collectively over wages and working conditions. Rather, it sought to control the political activities of the CELU leadership. As expected, CELU rejected these actions and continued to demand democratic changes and civilian rights. In January 1977, the Derg replaced CELU (abolished December 1975) with the All-Ethiopia Trade Union (AETU). The AETU had 1,341 local chapters, known as workers' associations, with a total membership of 287,000. The new union thus was twice as large as CELU had ever been. The government maintained that the AETU's purpose was to educate workers about the need to contribute their share to national development by increasing productivity and building socialism.

In l978 the government replaced the AETU executive committee after charging it with political sabotage, abuse of authority, and failure to abide by the rules of democratic centralism. In l982 a further restructuring of the AETU occurred when Addis Ababa issued the Trade Unions' Organization Proclamation. An uncompromising Marxist- Leninist document, this proclamation emphasized the need "to enable workers to discharge their historical responsibility in building the national economy by handling with care the instruments of production as their produce, and by enhancing the production and proper distribution of goods and services." A series of meetings and elections culminated in a national congress in June l982, at which the government replaced the leadership of the AETU. In l986 the government relabeled the AETU the Ethiopia Trade Union (ETU).

In l983/84 the AETU claimed a membership of 3l3,434. The organization included nine industrial groups, the largest of which was manufacturing, which had accounted for 29.2 percent of the membership in l982/83, followed by agriculture, forestry, and fishing with 26.6 percent, services with l5.l percent, transportation with 8.l percent, construction with 8.0 percent, trade with 6.2 percent, utilities with 3.7 percent, finance with 2.4 percent, and mining with 0.7 percent. A total of 35.6 percent of the members lived in Addis Ababa and another l8.0 percent in Shewa. Eritrea and Tigray accounted for no more than 7.5 percent of the total membership. By the late 1980s, the AETU had failed to regain the activist reputation its predecessors had won in the 1970s. According to one observer, this political quiescence probably indicated that the government had successfully co-opted the trade unions.

Ethiopia: Wages and Prices ~a HREF="/et_00_00.html#et_03_03"

Wages and Prices

Prior to the revolution, the Central Personnel Agency formulated and regulated wage policies. At the time of the military takeover, there was no minimum wage law; wages and salaries depended much on demand. There was, however, some legislation that defined pay scales. For instance, Notice 49 of l972 defined pay scales and details regarding incremental steps for civil servants. Similarly, the Ethiopian Workers Commission had developed pay-scale guidelines based on skill, experience, and employment. In l974 CELU asked for a 3 birr daily minimum wage, which the imperial government eventually granted.

After the revolution, the government's policy was to control wage growth to reduce pay scales. For parastatal and public enterprise workers earning 650 birr or less per month (real income, i.e., income adjusted for inflation) and civil servants earning 600 birr or less per month, the government allowed incremental pay increases. But for those above these cutoff points, there was a general salary freeze. However, promotions sometimes provided a worker a raise over the cutoff levels.

Given inflation, the salary freeze affected the real income of many workers. For instance, the starting salary of a science graduate in l975 was 600 birr per month. In l984 the real monthly income of a science graduate had dropped to 239 birr. Similarly, the highest civil servant's maximum salary in l975 was l,440 birr per month; the real monthly income of the same civil servant in l984 was 573 birr.

Data on real wages of manufacturing workers and the behavior of price indexes provide further evidence of worsening living standards after the revolution. In l985/86 the average real monthly income of an industrial worker was 65.6 percent of the l974/75 level (see table 11, Appendix). The general trend shows that real income fell as consumer prices continued to increase. The retail price index for Addis Ababa rose from 375.2 in l980/8l (l963=100) to 480.0 in l987/88. This rise in the retail price index included increases in the cost of food (27 percent), household items (38 percent), and transportation (l7 percent) (see table 12, Appendix).

Price increases mainly affected urban wage earners on fixed incomes, as purchases of necessities used larger portions of their pay. The government's wage freeze and the controls it placed on job transfers and changes made it difficult for most urban wage earners to improve their living standards. The freeze on wages and job changes also reduced productivity.

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