Striking finding

This book is a must-read for all those with an interest in the defining Indian problem of the day, mass unemployment.

I T would require an enormous leap of faith to deny that the crisis of joblessness ranks among the topmost of India’s social and economic woes. Yet, the Narendra Modi government, instead of conceding this, let alone addressing it meaningfully, has chosen to create another crisis, the jobs-data crisis. A number of election surveys conducted in the run-up to the Lok Sabha election have confirmed that the issue of jobs, or rather the lack of employment opportunities, is the most important issue that voters—irrespective of their voting preference—have identified.

Undaunted by the vacuum in official data, the 2019 edition of the State of Working India , sets out the grim scenario of the terrain in which unemployment has acquired such critical significance as a popular issue articulated by Indians. It posits that the controversy caused by the suppression of the release of official statistics by the National Statistics Commission continues to simmer because “there is now fully established politics of unemployment in India”.

In other words, irrespective of whether political parties pay heed to it or not, there is now a groundswell of popular demand for a war on unemployment, reminiscent of India Gandhi’s Garibi Hatao slogan that swept her to office in the 1971 Lok Sabha election.

This study has been compiled by a team of researchers led by Amit Basole, who teaches at Azim Premji University. It makes a painstaking analysis of data available in a situation in which official statistics on employment/unemployment are in disarray, which some would allege has been deliberately created by the Modi government in order to avoid embarrassment. Academics attempting to piece together a profile of employment and unemployment find that the annual household surveys of the Labour Bureau (the last one was in 2015) and the National Sample Survey Office’s (NSSO) five-year employment-unemployment surveys (EUS) have both been discontinued.

The void in data availability on this vital national question has been caused by the suppression of the Periodic Labour Force Survey (PLFS) of the NSSO, which came out into the open only because an enterprising journalist managed to access the report. Obviously, a report on the state of jobs in India could not do without some reliable data set, even if official data are not available.

State of Working India uses the privately run Centre for Monitoring Indian Economy’s (CMIE) data that are based on household surveys covering 1,60,000 households and 5,22,000 individuals. The CMIE data are based on a Consumer Pyramids Survey that goes back to each respondent in three “waves” during a calendar year.

The report includes a few basic comparisons with other data sets and concludes that the labour force participation rate and the workforce participation rate for men estimated by the CMIE are comparable with the EUS of both the NSSO as well as the Labour Bureau, although they vary significantly for women.

Unemployment among youths

The findings are striking. The analysis of the CMIE data reveals that five million Indian men lost their jobs between 2016, when demonetisation was unleashed on a hapless population, and 2018. Significantly, there is no estimate of how many women lost their jobs. Given that the nature and terms of employment for women are far more tenuous, the total number of jobs lost since November 2016 could be much higher, possibly at least eight million. Both the CMIE as well as the leaked PLFS data reveal that the overall unemployment rate in India was about 6 per cent in 2018, double the levels prevailing in the 2000-11 period. But a disaggregated picture provides a clue as to why unemployment is such a burning political issue now. Strikingly, the levels of unemployment among youths is unconscionably high. Even more appalling is the fact that young women bear an even bigger burden of joblessness.

Consider this: the rate of unemployment among urban women graduates is 34 per cent even though they constitute just 10 per cent of the working age population in urban India. The situation is even more pathetic for men in the 20-24 year age group. Urban men in this age group account for 13.5 per cent of the working age population, but a whopping 60 per cent of them are unemployed.

To be sure, the rising levels of unemployment are not merely an urban phenomenon nor are they a problem that is confined to the educated. The youth dimension is obvious: the median age of the Indian population is just 28. It is obvious that the much celebrated demographic dividend that India was expecting to cash in on has passed on.

But it would be a travesty of truth to consider that the scourge of unemployment is confined to the ranks of the educated. The less educated and those working in informal occupations have also been hit hard, especially since demonetisation, as has been repeatedly confirmed by numerous anecdotal examples from across the country since 2016. The introduction of goods and services tax in 2017 worsened the already grim situation for the less educated who were more dependent on informal sources of employment for a livelihood.

An analysis of the CMIE’s raw wave-wise data by the authors reveals that “open unemployment” among this section of the workforce has also fallen since 2016. How is it possible for the desperately poor, those with less educational attainments, to remain out of work?

The report suggests that it is possible that people engaged in such jobs may have lost access to the more regular jobs that they earlier had, which meant that the probability of them being captured as being “employed” in the surveys may have diminished significantly.

The report warns that despite heightened media and political attention on joblessness among the educated in the aftermath of the jobs-data crisis, it would be a mistake to ignore the problem of unemployment in this section of the population. “[I]n absolute terms, this is a much larger number of people in the more vulnerable sections of society,” it warns.

The question of why the educated prefer outright unemployment even if they could find lower-paid and less secure jobs may appear perplexing at first glance. The report observes that cultural, or to use the more fashionable term “aspirational”, factors may explain why people from this section prefer to remain poor. However, a more plausible explanation could be that the relatively better educated do not wish to remain caught in a low-wage trap.

Of course, there are also cultural factors, under whose rubric would come those performing the most demeaning of tasks, such as manual scavenging.

The Magsaysay Award winner Bezwada Wilson has repeatedly, and poignantly, pointed out that the sons of manual scavengers want nothing more than an escape from perhaps the filthiest of all Indian occupations. Clearly, it is not a matter of wage rates for these poor, mostly Dalits. But this “mindset” of choosing to remain out of work is not confined to the poorest. This correspondent recently met an Uber driver who, with a diploma in printing technology in Chennai, had worked many years in several media establishments until he lost his job about two years ago. “I started driving a cab last year because I was not able to get a job in my field, but this is a thankless job too and I barely make ends meet,” he said. He said he would rather get back to a job in his area of expertise even if it meant a pay climbdown. This same “mindset” is visible in young women who would rather work in a chain store or a garment factory with extended hours of work and not-so-great pay rather than work as domestic help with possibly a higher earning.

What these examples demonstrate is not irrationality as casual observers of the world of Indian joblessness would interpret but a view in which workers try to maximise their earnings over a lifetime in the workforce instead of the immediate. The Uber driver cited earlier said: “If I get back to my earlier work, even at a lower wage, there is at least the prospect of my expertise being recognised later, but if I stay hitched to Uber, I have nothing to look forward to.” Clearly, the mainstream view on unemployment in all its dimensions is a bankrupt one, one that has outlived any relationship to reality.

For far too long, employment has been seen as a byproduct of economic processes, an extension of the trickle-down theory of economic growth, if you will. This simple-minded reasoning was based on the logic that growth would automatically lead to employment. So all that governments needed to do was to promote growth through encouragement of the private sector, and jobs would start rolling out. The empirical evidence, particularly on the elasticity of employment to investment, utterly demolishes this fallacy. The study points out that Rs.1 crore (standardised to the value of the rupee in 2015) of investment in organised manufacturing generated 80 jobs in the early 1980s; by 2015, the same investment resulted in only 10 jobs. Greater automation, accompanied by higher labour productivity, has disrupted the link between the quantum of investment and employment.

The report adds value by suggesting that there is a need to introduce an urban employment programme that would address the serious deficit in the provision of social services such as health, education and public works. It offers detailed proposals for initiating works that would not only improve the quality of life, while being ecologically sustainable, but also address the problem of rampant unemployment. Combined with a programme of providing universal basic services, these have enormous potential to address the problem of joblessness.

The problem of unemployment in India has been generally addressed by two kinds of approaches. The first has been the utterly witless focus on the economic, the mindset that proposes economic growth as the magic wand.

At the other end of the spectrum, but which only appears in fits and starts, lies the proposition that treats welfarism as a cure. This more populist view, with no clear and transparent underpinning to the economy, has also been rendered ineffective, especially since liberalisation began in the 1990s. In both these views, employment is whatever results from policies pursued in other realms, social and economic. These approaches need to be turned on their heads, the focus being on increasing employment to solve problems in other realms. And, given the huge backlog of underdevelopment, there are plenty of opportunities waiting.

Clearly, the articulation of joblessness as the defining Indian problem, especially of youths, demands a new economics, a new sociology and a new politics of unemployment in India. If this is not undertaken on an urgent basis, the legitimacy of the Indian ruling establishment may well be in peril. This book is a must-read for all those with an interest in the defining Indian problem of the day, mass unemployment.