There have been lots of debates and discussions lately regarding the increasing unemployment in India. In 2014, Prime Minister Modi had promised creating 1 Crore (10 million) jobs per year. When he made that announcement, he did not specify that that all these jobs would be created in the government sector because that is just not possible. This is because, you may be shocked to know that only 3-4% of the new jobs being created are in the government sector and the rest are in the organised and unorganised sector. Hence it is imperative that there must have been some assumptions about the private sector while making that promise. Unfortunately, last couple of years have seen a economic downturn in overall global markets and India cannot remain isolated from such global phenomenon. The country’s population and domestic consumption definitely helps many businesses to survive these headwinds but financial growth primarily comes through exports. Even a country like China will get affected with global market movements.
Here are some of the aspects which will help us understand why there is so much unemployment and what skills are in need today.
Undoubtedly, our biggest culprit of unemployment is our population. We claim that our country’s youth will become our strength. Is that really true? Every month more than 10 lakh new job seekers are entering the job market. Hence the promise of creating 1 Crore jobs every year must been aligned to satisfy this influx but in reality only 5-6 lakh are getting employed. India’s unemployment rate has crossed 6% (5.3% rural unemployment and 7.8% urban unemployment). This suggests that there is a mismatch between the demand and the supply. The supply is much more than the demand.
2. Education System:
The education system and the teaching methods in India is another big mess. Some 30-40 years ago, the mindset was very mark based; those who got the highest marks chose science, those who got a little lower chose commerce and those who were not successful academics-wise chose arts. The most-obvious career choices were Doctors, Engineers, Lawyers and CA’s. Back in the day, engineering college graduates managed to good paying jobs but this led to mushrooming of hundreds of engineering colleges from big cities to small villages. Today there are 15 lakh engineers graduating every year but there are not that many jobs available in the market. If you speak to these new engineering graduates you will realise how hard it has become for them to get jobs. Even if they do get jobs, their average monthly salary is around Rs. 8000-10000. The government, under the minimum wage act, has decreed that the minimum monthly wage for a salaried employee should be Rs.9750 but how many people in India do get this monthly salary? Many a times it is seen that cleaning workers and engineers earn the same money. The people should be employed based on their abilities but sometimes we hear stories of engineering graduates doing clerical jobs. Should this be called employment? This is the mockery of our education system but nobody wants to change this system. I will give you a simple example; see if you agree. Today civil engineers are getting paid monthly Rs. 8000-10000, a skilled mason Rs. 12000-15000 and drivers are being paid Rs. 18000.
I am not against reservation but I believe that specialised professions like Medicine and Engineering should be merit-based. I do recommend subsidising education for lower-income families but lowering the merit standards is a warning bell for the future. However the reservations have become part of political propaganda today that is why no politician will oppose reservations.
4. Work Quality and Income Capacity:
If you go to villages today, you will realise that all the youth want to move to big cities to find jobs. These youngsters are ready to seek whatever jobs they can get in cities. The primary reason is that being a farmer’s son doesn’t add much material value for marriage proposals. I remember that we used to sell our printing machines in the smallest of villages and we always used to wonder why? But then we realised that even if the income generated from running small printing shops was not great, it still was perceived as a better status for getting marriage proposals. On the other hand jobs like barbers, carpenters, masons, electricians, masseurs, amazon/swiggy delivery boys, ola/uber drivers etc. earn more money but are still looked at as inferior jobs. In big cities, dog-walkers is a high paying job but is still looked down upon. It is difficult to know how much scrap collectors earn but their status is zero. (The topic of Scrap-collectors could be one of my upcoming articles). In Western culture no job is looked down upon because there is dignity of labor. On that note I am going to make a courageous statement – Employment is inversely proportional to education. The more specialised your education is, the fewer are the job opportunities. The more educated you are, the resistance for menial jobs go up exponentially.
5. Work Skills:
Today every business is looking for skilled workers, be it carpenters, drivers, clerks or engineers. Not just skill, they also need employees who can take up larger responsibilities. A business owner is always looking for employees who take initiative at work. And if the employee displays the skills and the mindset to face challenges, that will be icing on the cake. All these are called soft skills. According to entrepreneurs and business owners, these soft skills contribute 70% to the eligibility and only 30% importance is given to actual education they receive from their college. Unfortunately these soft skills are neither taught in college nor at work. These skills have to be largely inbred in some form and training can only harness them.
It is our general belief that people in western countries are paid better than those in India and if we were earning those higher salaries in India then there would be no poverty. But nobody discusses the underlying productivity that is associated with it. I will give you an example, lets see if you agree with it – In a café or restaurant that serves 30-40 people in a western country, there only 3-4 workers. In our country, there would be minimum 12-15 workers in a similar establishment. If the productivity at such restaurants in the west is four times, why should we feel bad if they are paid more? Due to the high population in our country, we have availability of cheaper labor at the cost of lower productivity. We are confined to and almost used to simpler less stressful jobs.
Today, India has 6.5 crore people self-employed. In comparison, USA which is 8 times wealthier than India has only 2.2 crore employed people. The reason for this is simple; the large population in India coupled with lesser opportunities. Some months back Modi and Shah spoke about the pakoda-seller and that created quite a stir but it is the reality of our country. Among the 6.5 crore self-employed people, 1.25 crore jobs don’t have even a fixed address and another 1.25 crore jobs are run from home. Only 70 lakh employees are self-registered businesses. All these self employed people get counted as unemployed. This is the peculiarity of our country. There are Pakoda-sellers, Vada Pav sellers, Tea-stalls, homemade goods sellers all across the country. Today even Indian government is promoting initiatives like “Mudra Loans” and “Skill India initiative” to help such self-employed people.
8. Lack of zeal among youngsters:
One of the big roadblocks in creating employment is the lack of interest in working hard shown by many youngsters. If you ask local businessman, he/she will express that the younger generation is unwilling to work hard. Even carpenters, bricklayers are finding it hard to find subordinates to work under them. Here is one example I have experienced myself – there was a need for 2-3 waiters/helpers in one of the hotel at Palghar. The manager put out a word that he was looking to hire. Since he got zero response, he tried to find out the reasons himself. The response he got was like “who will work so much?” Today everybody wants to work as less as possible and earn as much money as possible. That is why you see so many youngsters get associated with local politician so that some money can be made and their hooliganism is many a times neglected due to political clout and which in turn gives them a sense of authority. How can this younger generation become our strength? In the many villages I have been visiting, I can see anger and frustration boiling inside them and I dread that if this anger and frustration is not channelised properly, it will lead to a massive social unrest.
Now the question is whether there is a way to overcome these aspects? And if yes then what that could be?
1. First and foremost we have to curb our population. In 1947, our population was 35 crore and in the last 72 years our population has quadrupled to 135 crores. How much ever we succeed in the fields of education, health, cleanliness, agriculture, technology etc., that success will get eclipsed by the growing population.
2. Our educational systems is overdue for an overhaul. We don’t teach critical thinking, we systematically kill a child’s creativity and imagination. And what we teach in the classroom has no connection to what the industry needs, not in subject content and not in number of graduates needed. Getting a degree need not be a fundamental human right. Education needs to be a fundamental human right, not a degree. There are so many other skills that can be taught to make skilled workers. Hence more than focusing on achieving degrees, we must focus on vocational training to harness skills. Fortunately today there are lot of avenues at least in the arts and commerce streams that are now accessible to our youth.
3. There are some basic improvements needed in Labour Laws. The world has seen the adverse effects unionism. The Unions have destroyed the workplace. What happened in Detroit was caused by Unions. It has become akin to communism. No incentive for competition, no incentive to work hard. The unions have actually killed people’s desire to work. People want pay without working. The government offices in India suffer from the same problem. It is true that businesses depend on workers and it is also to be remembered that worker jobs will last only if the business last.
4. The 7th Pay Commission have decided upon minimum wage of Rs. 18000 in Government Departments but it is only Rs. 9750 in Private Sector. This anomaly leads to mad rush to seek government jobs because not only you get a good salary but there are avenues to earn money through illegal means (bribery). I also strongly advocate that the retirement age in government sector should be lowered from 60 to 58 otherwise opportunities in the government sector will further dwindle. There may be some disruption in the beginning but need of the hour is to take some hard and bold decisions with the future in mind. Otherwise this rising unemployment can become a civil unrest of sorts.
5. We need to add more emphasis to entrepreneurship. A degree to gain social status is of no value. There should be initiatives to harness talent and improve skills to improve your socio economic status. Career choices should be based on an individual’s likes and there should be access to career opportunities. Today 50% of the Indian population is dependent on agriculture but due to increasing population, the farms are being split into smaller lots by way of inheritance. The marginalised farming is further reducing productivity and there is tremendous pressure on the lives farmers and their families. That is why the new generation of workers have to explore new avenues for entrepreneurship. Our society needs to start respecting all professions so that people will accept and pursue all types of employment. The second important aspect is that there is no point in waiting for the government to do something for us. There is a limit to what the government can do and hence we should try to find our own path.
6. Today everybody around us has created a cocoon or a comfort zone around themselves. We cannot have such an attitude in a fast changing global environment if we want to progress. We need to get out of confined boundaries and look outside our periphery. We need to have the attitude to be willing to work in any part of the world (I am aware that the number of opportunities to go work overseas are reducing). In spite of this, learning a new language, with a global perspective in mind, is highly recommended. You will find many studies that show that communities who refused to migrate or adapt to change have in a way lost their creativity and innovation.
We can hope that some change to happen in our lifetime so that our future generation can have a better life, otherwise our country will suffocate under the burden our growing population.
If any of you have some unique ideas or suggestions, then do let me know. I am hoping that such discussions may actually lead to a solution.