Photo: AP
Photo: AP

The jobs discourse

We need to re-energize the jobs discourse, how about a slogan like 'More jobs per crore of investment'?

If you are between the ages of 18 and 60, able-bodied and reasonably healthy, what are you supposed to be doing? Either gainfully employed, or not.

But it’s not that simple. The workforce is defined to be those who are employed or looking for work. If you are doing neither, then you are not part of the unemployment statistics. Of course, you could be in university or a stay-at-home spouse, and hence not part of the workforce. Globally, the World Bank reports that one third of the 1.8 billion young people are neither employed nor in education or training. Not all of them are officially unemployed.

Abhijit Banerjee of Massachusetts Institute of Technology recently related some peculiar findings from his numerous field studies. He encountered many young men between the ages of 21 and 27 who were neither employed, nor in university, nor looking for a job. Thus, they are not in the official labour force. This was from a survey from the suburbs of Delhi, but it could be in Pune or Patna or many other big cities of India.

What were these young men doing? They were studying for competitive exams to get into any of the alphabet soup government services. It could be civil services (Indian Administrative Service, Indian Revenue Service and others of that ilk, including at the state level), or railways, post and telegraph services, police, paramilitary and many others. In Pune and Mumbai, there are charitable organizations that “sponsor" kids from rural areas for two or three years, and help prepare for such civil service exams. Some political parties also organize subsidized (or even free) coaching for IAS and similar exams.

So, this class of youngsters (mostly male, but increasingly female too) is not officially looking for jobs. Oh, they do occasional tuition or coaching classes and odd jobs, probably to make some pocket money, or pay for food and rent. These aspirants are extremely hard-working and focused on their mission. Unfortunately, only a small fraction will make it to a government job. After multiple attempts, when they reach the cut-off age of 27, they will enter the formal workforce, i.e., actively look for a job. It’s an incredible waste of human capital in India that four or five precious years of these youths are lost in essentially participating in a lottery. The lure is a government job, which still commands a huge premium. If there’s any doubt, just scan the number of applicants that line up even for a class 4 job advertisement.

Lakhs of young people show up for a recruitment camp for a few hundred jobs —these are routine happenings—in many parts of India. Why is a government job still the Holy Grail for much of India’s youth? (The mad scramble is also seen for seats in a decent engineering or medical or law college. But that’s a story for another day. This past month, more than 1 million kids took an exam for a chance to bag one of the 9,000-odd seats in the IITs, a chance of less than 1%).

How will jobs be generated? Prime Minister Narendra Modi has urged the youth to try and “be an employer, not an employee". If you can’t find a job, then create one yourself. Initiatives like Start-Up India and Stand-Up India are specifically geared to unleash entrepreneurship, and hopefully, create jobs. Road building, railways, ports and the like cannot by themselves generate 12 million jobs every year for the next 10 years. That’s the scale of our challenge. It is noteworthy that China created 64 million jobs during their 12th five-year plan period, between 2010 and 2015. This is a period when their labour force is plateauing and demography is ageing. But the single-minded focus on job creation is also evident in their 13th five-year plan.

We need to re-energize the jobs discourse, last seen at fever pitch during the campaigning for the 16th Lok Sabha election. Candidate Modi directly addressed the aspirational young, first-time voters. He said that the youth was seeking a job, not a dole (an indirect reference to the United Progressive Alliance government). The economic discourse was supposed to turn away from the rights (and “dole") based development paradigm, to one of jobs, and of wealth creation. The jobs imperative is perhaps best captured in a slogan, like the one used to denote water efficiency: Per Drop, More Crop. How about a slogan like “More jobs per crore of investment"? Which sectors should we focus on? Presumably labour-intensive ones, such as construction, textiles tourism and agro processing, or services such as healthcare.

We do not have a real-time reliable measure of job creation. In a flexible job market, jobs get created and destroyed dynamically, making it harder to track jobs growth. Besides, there is the large-scale phenomenon of casualization of labour, and growth of the informal sector. The statistics on employment come with a huge lag. One reliable but inadequate source is the Quarterly Employment Survey of eight selected industries published by the Labour Bureau. Five years ago, these industries created 850,000 jobs; the pace declined to around 420,000 by 2013. In 2015, job creation was merely 135,000.

The Sixth Economic Census, the data of which was published recently, also shows not-so encouraging news on job creation. The census shows that “establishments" (potential job creators) are growing faster than employment, both in urban and rural areas. The caste agitations in various states also point to an underlying jobs anxiety. We thus have an imperative to refocus on a jobs discourse and use that as a metric to evaluate every social and economic policy.

Ajit Ranade is chief economist at Aditya Birla Group.

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