High Unemployment and Salaries in Iraq

ByABC News
February 27, 2004, 10:06 AM

March 14, 2004 -- -- Four months ago, our news teams found unemployment to be a major problem among Iraqis.

Today, unemployment remains a problem in central and southern Iraq, though it is getting better in the north.

In general, employment figures have proven the hardest to quantify. The Coalition Provisional Authority reports unemployment rates are currently running at between 25 percent to 30 percent -- far lower than the estimates last fall, and lower than before the war.

Those statistics, however, may not be reliable.

When the coalition disbanded Iraq's army right after the war, 1 million people became unemployed overnight. This remains a crushing burden on Iraqi society.

Those ex-soldiers who have found work have typically been hired as security guards, or given "artificial jobs created by the CPA," as ABCNEWS' defense expert Tony Cordesman puts it. These jobs include street vending or day laboring, but nothing with any long-term prospects.

But for the many Iraqis who are working, they are reaping benefits that would have been difficult to imagine one year ago.

Salaries for anyone under CPA employment -- and that represents more than 300,000 Iraqis -- are exponentially higher than the prewar national average and higher than what privately employed Iraqis presently make.

Since the CPA is now either the direct or indirect paymaster for a wide variety of workers, this means that police officers and teachers, construction workers and hospital workers, and many other professionals are taking home salaries that are between two and 20 times what they used to earn.

Facts and Figures

More than 55,000 Iraqis are employed by contractors, at an average wage of $4 to $5 per day, according to the U.S. Defense Department.

CPA's Explanation of Drop in Unemployment: The "about 70 percent" figure that the CPA gave ABCNEWS in November was not an official figure, but an estimate based on consultations with Iraqi economic officials. It was never a concrete figure. Since then, experts say they have had the advantage of time on the ground to help gauge more accurately the employment picture. Our own view is that this remains a very rough estimate.