Since independence, governments have made and changed many policies directed at achieving this goal. Among the important policies have been the Commerce and Industry Ministry’s drive towards the creation of middle to large scale manufacturing projects and the 1992 scrapping of the urban minimum wage. The idea was that lower wages would allow companies and the government to employ more people.
Another important policy was universial education at primary school level. This aims to educate the majority of the children, who would then be able to find work or use their knowledge to employ themselves in their villages.
The trend of employment has however been worsening. Rates of unemployment have risen to about 16%. Out of over 50,000 youths coming out of schools every year, only 10% find formal employment. The rest get sucked into the informal sector or return home to join the subsistence sector. The government is by far the largest employer, followed by the private sector. Recently, PNG has exported skilled personnel and nationals have taken up executive positions in major resource firms. Despite this PNG is still heavily dependent on skilled expatriate labour. About 10% of the labour force is expatriate.
In PNG the employment statistics vary, depending on the source. The government uses the indexes or figures supplied by the National Statistical Office and the Bank of PNG’s bulletins, produced every quarter. In the private sector the Employer’s Federation of PNG conducts a survey amongst its members to calculate the actual changes. The federation’s employment survey is produced half yearly. Unfortunately for analysts and policy planners, the statistics vary quite a bit, making calculations difficult, although generally they all point towards a decline in jobs.Employment trends are also led by the seasonal factors, especially in agriculture. Harvesting seasons for coffee and other cash crops fall at around mid-year, thus causing a temporary increase in employment. The numbers fall again soon after.
The 1991 Employer’s Federation survey indicated that employment levels in its 137 member companies (one third of the total formal private sector) fell from 55,000 people in 1989 to 47,000 in 1990 and went further down to 45,000 in 1991. Since then employment trends have either been static or have declined marginally The Rabaul volcanic eruptions, which destroyed the entire commercial activity of the town, have had adverse effects on employment statistics.
Recent government decisions also have some bearing on employment The 12% devaluation of the kina in September 1994 and its floating a month later has meant that imported skilled labour is now more expensive. The 1995 budget also re-introduced the fringe benefits taxes, raised the ceiling for provincial sales taxes and increased tariff measures. Employers are restricted in employing new workers as a result.
In the public sector, the government will over the next two years, abolish a total of 4,500 positions in the public service. This will have an effect on general employment trends, although the start-up of Lihir gold mine and the Gobe oil field may counteract that.