Housing: An Engine for Jobs

One thing a critic cannot fault the present regime for is their ambition. What some skeptics may call tall claims, can be viewed by others as aspiration. Though the targets seem too ambitious, the progressive initiative is a step in the right direction. When the government promised to create 10 million jobs and build 5 million houses across the country during its 5-year tenure, the larger masses responded with enthusiasm.

According to UNDP, Pakistan needs to create 1.5 million more jobs every year to keep up with the rising youth population prepared to enter the labor market. The good news, however, is that the government’s two plans go hand in hand since housing is a huge stimulus for employment generation worldwide.

A global estimate is that every $1 invested in housing results in the contribution of an additional $1.5 to $3 to the GDP. Similarly, for every 1 housing unit built, 2 to 7 jobs are created. A simplistic calculation would suggest, building 5 million houses could create between 10-35 million jobs.

Prime Minister Imran Khan’s team has calculated rather more ambitious numbers. They argue that, construction of each house would create 20 jobs each year. This way, construction of 3 million houses would generate an additional 60 million jobs within the time it takes to build these houses. If that is 5 years, 12 million jobs will be created each year.

Furthermore, the team claims that the jobs created will require a variety of workers, including unskilled, semi-skilled, and skilled. In addition, 1-1.5 million jobs will be injected into related manufacturing industries such as cement, steel, marble, furniture, glass, paints and white goods, and in services industries such as banking, real estate, security, maintenance and insurance.

While construction largely requires daily wage laborers, it also employs builders, project managers, site managers, architects, interior designers, and contractors. It is estimated that nearly 50 large, medium and small industries are involved in construction. Demand for construction and housing related industries will further raise the demand for skilled and unskilled workers.

To some, creation of 60 million jobs in five years would sound a bit unrealistic. A study conducted by Karandaaz Pakistan finds that the construction of 100,000 3, 5 and 10 marla houses in Lahore every year creates between 150,000-400,000 rolling jobs. It means, 5 million houses could generate as many as 20 million jobs.

The purpose, however, is not to get lost in the numbers game, but rather to consider the long-term benefits to the economy. Housing has a multiplier effect on jobs creation. Once the market becomes flourishing, and the regulatory environment becomes conducive to investment, it will create a momentum in the market and open opportunities for scale and innovation. This will evolve job roles and create prospects for workers to transform their existing skill sets to thrive in the labor market.