Fixing the Unemployment Problem


Fixing the Unemployment Problem

About 9.9 million new jobs were created in 2022 compared to the previous year, according to the International Labour Organization’s India Employment Report 2024, based on data from India’s Periodic Labour Force Survey (PLFS).

This figure, writes Nilakantan RS (data scientist and the author of South vs North: India’s Great Divide) “encompasses all jobs created in the country across all sectors for all citizens of working age. For context, India produces about 10-12 million college graduates each year. And about four times as many people who never attended college become of working age as well. So, the total jobs created is somewhere between a third and a fourth of the total number of people who became eligible to work that year, depending on how one counts…..”


Number of workers in agriculture and allied sectors increased in 2022

According to the same ILO report, the number of workers in agriculture and allied sectors increased by 12.9 million in 2022—more than the net addition of 9.9 new million jobs. This suggests, according to Nilakantan RS “losses in other sectors. This is the exact opposite of what we want as a society that seeks to move people from an agrarian economy to a manufacturing one. India added a mere 1.7 million jobs in manufacturing in 2022, which  is less than 10 per cent of the jobs added in agriculture! Instead of moving away from an agrarian economy to an industrial one, it seems the country is moving backwards by becoming even more agrarian.”

Younger people are taking up jobs in agriculture: Agriculture is disguised unemployment. “Additional employment in this sector, for the most part, shows a lack of job opportunities in other sectors. But what is even more troubling is that younger people are taking up jobs in agriculture on a massive scale.

“….Except, in recent years, more than half of all jobs that young people have been taking up are in agriculture! Worse, this figure—of young people taking up jobs in agriculture—went from around 37 per cent in 2019 to 52 per cent in 2022. Therefore, not only are young people still taking up these unproductive jobs, but the rate at which they are doing so is accelerating!”


Stagnation in job creation not a recent phenomenon

The stagnation in job creation, as well as the decline in job quality, writes Nilakantan RS “are not recent phenomena writes  This trend, in fact, has been unfolding since the turn of the century. For example, between 2012-2019, years that include both the first term of the Modi administration and the previous government’s tenure, the total jobs in the country remained a relative constant. In 2012, the total estimated number of jobs stood at 466.3 million. In 2019, it was 466.5 million. In these seven years, it’s likely that 100-150 million young people became of working age while hardly any additional jobs were created.”

India needs to be careful for  its  demographic dividend not to  turn sour.


Education, health and security important for job creation

While everyone wants to see massive job growth, the reality, writes Nilakantan RS “is that job growth is a downstream effect of good economic policymaking. Jobs can’t be willed into reality despite bad decision-making on the policy front. For people to move up the value chain and hold productive non-farm jobs, they need to first get an education, be healthy, and feel secure. That human capital needs to be built, as a necessary condition. The data on state-level discrepancies shows exactly that, as well. States with higher levels of education and human capital formation have better employment opportunities  for their citizens, and at higher wages.”


Indian workers risking their lives to work abroad

The unemployment problem is underscored by the increasing of Indians seeking opportunities abroad.  Indians, writes Sunanda K. Datta-Ray (senior journalist, columnist and author) “would not otherwise have courted death trying to smuggle into the United States, fighting as Russia’s under-equipped mercenaries in Ukraine or replacing 90,000 Palestinians whose work permits were revoked after the conflict with Hamas erupted.”

Datta-Ray is  “not surprised that several labour unions, including the Centre of Indian Trade Unions and the All-India Trade Union Congress, as well as rights groups, question the wisdom of sending workers without adequate guarantees for their safety…

"No Indian worker would have risked their lives if they had jobs at home.”

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