Jobs: Universal basic problem

Raghavan Jagannathan — old friend, aging colleague, veteran journalist, editor par excellence, known to the world as Jaggi — has revived some unpleasant memories in this book because after I finished my MA in the early 1970s I was unemployed for nearly three years. But — even though some people clearly thought so — I wasn’t completely useless.

The fact is that there simply weren’t enough jobs to go around because the government wasn’t allowing the private sector to expand and, being focused on redistribution, wasn’t expanding its own jobs by very much either.

The resulting jobs crisis had led to that to the popular Hindi song, BA kiya hai, MA kiya hai, lagta hai woh bhi ainvain kiya hai. It is picturised on six “educated unemployed youth” dancing in the street.

Mr Jagannathan says we are back in that situation. India simply isn’t generating enough jobs to absorb the surplus labour from agriculture. What’s worse, the ones that it had generated over the last 40 years are gradually disappearing.

His numbers about the jobs-gap are utterly frightening. He quotes several estimates of this gap. Chapter 2 contains a highly accessible discussion of the data on jobs. None of it will make you happy.

But he omits to mention one pertinent statistic in this regard, namely, that in 1900 the world population was one billion. Now it is more than seven billion. Half that is 3.5 billion. There’s no way so many can be “employed”. Improving technology has reduced demand for labour while increasing population increased its supply.

The inescapable conclusion is that the world was living in a fool’s paradise since 1950 thiking jobs are a birthright. Now the time has come for reverting to the pre-1950 mean of work replacing jobs.

This pessimism is spelt out in the first chapter, which says, “If an economy works its outcome should be visible in jobs and income growth. However, this is palpably missing in many countries.”

The result, says Mr Jagannathan, is that even in the biggest economy in the world, the US, “median incomes have stagnated since 1979”. In India, it is very much worse, hence the increasing number of agitations and attempts by the political system to sacrifice productivity for numbers. Doles such as MGNREGA, the rural jobs guarantee scheme, are being described as job creation.

I have just one little quibble here: The book would have been richer if Mr Jagannathan had spelt out whether the jobs problem is a social one, as

Sonia Gandhi and her

National Advisory Council thought; or a political one as Narendra Modi thinks — he said as much — or an economic one as those whose savings are used for creating jobs believe. Depending on how it is viewed, we get different solutions.

I have for long held the view that the jobs problem is not a solvable one, and that it is work creation that is important. So I looked to see if Mr Jagannathan had written about it.

He has, in Chapter 9, titled “Jobs or Gigs: What will be the future like?” He has discussed both in a no-nonsense way, spelling out the pros and cons of work versus jobs. He points to the changing nature of work-contracts that are neither nor fish nor fowl.

In other words, the idea of ancilliarisation has now entered the labour market — the correct term is dependent contractors. There is now a structural convergence between the product market and the labour market. Both now depend on outsourcing for temporary work rather than permanent employment. Mr Jagannathan has dealt with this very well.

Faced with Marx’s army of the unemployed growing around us, Chapter 10 deals with the most nonsensical idea of all time — Universal Basic Income (UBI). Mr Jagannathan asks if this is the solution and politely leaves it unanswered.

He is content to quote the Economic Survey of 2016-17, which had floated the idea and then said there wasn’t enough money for it. Why float it in that case?

The concluding chapter bears the title “Restating the Jobs Challenge”. Its key message is that unless India does a dozen thing simultaneously — and maybe even then — the crisis of jobs is not going away. What we have staring us in the face is a social, economic and political problem of 19th-century European dimensions.

Those problems caused extraordinary upheavals there. There is no reason to believe that India will be spared that fate — regardless of the dozen or so solutions that the writer suggests.

The inescapable conclusion is that the world was living in a fool’s paradise since 1950 thinking jobs are a birthright

THE JOBS CRISIS IN INDIA

Raghavan Jagannathan Macmillan

384 pages; ~599