Bhutan is yet to ratify the key International Labour Organization Conventions Number 87 (Freedom of Association and Protection of the Right to Organize, 1948) or Number 98 (Right to Organize and Collective Bargaining). Trade unionism is not permitted in Bhutan, nor does it exist in practice. In fact, terms and conditions as well as salaries are generally fixed by the government, which requires employees and employers (at least in the formal economy) to engage in formal written contracts of agreement. The population employed in Bhutan is estimated at 970,000 (based upon a population of 2 million).
Education has received considerable emphasis by the government of Bhutan, and primary schooling is available in even the remotest areas. The Bhutanese government spent 7 percent of total expenditure on education in 1997. Mainly due to government initiatives in its drive to reduce illiteracy, levels fell from 71.9 percent in 1980 to 52.7 percent in 2000. The Bhutanese workforce is becoming more skilled, although this is problematic because there are serious limits upon the amount of educated workers required in what is essentially an agricultural economy. Consequently, while there are rising employment expectations amongst the literate population the labor market cannot provide sufficiently skilled work.