Kazakhstan has a workforce of roughly 8.8 million people. Some 27 percent of the labor force is occupied in industry, 23 percent in agriculture and forestry, 20 percent in education, and the remaining 30 percent in the service sector and other sectors such as government and military. The unemployment rate was estimated to be 14 percent in 1998. Unemployment is much higher in rural areas than in urban areas, where the service sector has enjoyed robust growth in recent years. Employment by women in urban areas lags behind that of men by a considerable margin, reaching 20 percent.
Kazakhstan has paid a high social price for its rapid progress in the transition from communism. Under communism, economic growth was restrained but there was a very low level of inequality. Most workers made roughly the same income. Extremes of high and low incomes were rare. Since independence, Kazakhstan's success in rapid macroeconomic and political reforms created anxiety among the country's southern neighbors, particularly Uzbekistan, where government-regulated prices and subsidized production were still the norm. Kazakhstan's abandonment of subsidies for Soviet-era industries permitted a steep industrial decline, throwing hundreds of thousands of Kazakh citizens out of work. Kazakhstan's success in privatization led to charges in the press and among many industrial workers that the Kazakhstan government had sold out to large multinational corporations , abandoning social principles in favor of rapid income gains for the few. Kazakhstan's efforts to court a few large multinational enterprises— particularly in the gas, oil, and minerals sectors—led to the widespread perception of growing corruption, bribery, and cronyism.
The socio-economic consequences of the transition are immediately visible in Kazakhstan. High unemployment, deteriorating or even non-existent social services, unpaid salaries, social security and pension payments, unheated apartments, and unavoidable confrontations with dishonest or corrupt local officials: these are everyday features of life in Kazakhstan.
Kazakhstan's industrial workers have sought to use collective bargaining to promote their common welfare. However, trade unionism has weak traditions in the country. The Confederation of Free Trade Unions claims a membership of about 250,000 workers. In fact, the number of independent trade union members is much lower. Other unions have had even less success. To obtain legal status, an independent union must apply for registration with local judicial authorities and with the Ministry of Justice. Registration is generally lengthy, difficult, and expensive. Independent unions gravitated towards opposition political candidates but turned more pro-government in 1999 when the government authorities introduced protectionist trade policies aimed at supporting domestic industries. Kazakhstan law does little to protect workers who join independent unions from threats and harassment by enterprise management or state-run unions. Members of independent unions have been dismissed, transferred to lower-paying jobs, threatened, and intimidated.