Q. The government says the jobs crisis is exaggerated. Do you agree? Is there a reliable way to understand/ measure the extent of the problem?
A. N.R. BHANUMURTHY
The 2017 Period Labour Force Survey (PLFS) data, a government source, suggests an unemployment rate of about 6.1%. The rate is higher among the youth. Growth has been decelerating since then, so one should expect that the unemployment situation has deteriorated. This is also reflecting in the sharp fall in private consumption.
Part of the crisis is because of the advent of industry 4.0, which threatens to displace more than 60% of industrial jobs in India, due to technology, AI, robotics and automation. The workforce is not skilled enough for future jobs. Our small, medium and micro sectors have been overwhelmed by imports from low-cost, high-scale labour factories in places like China. We lack good, reliable and up to date data from the labour market, partly because 90% of the labour works as informal or unregistered. To get a better handle on the jobs crisis, we need a better, coherent, coordinated and triangulated database on work, jobs and applicants.
PLFS shows an unemployment rate of 6.1%, which is much higher than the unemployment rates of the past 40 years (in the range of 2-3%). If anything, this number understates the extent of the problem since, in a poor country like India, without unemployment benefits, very few people have the luxury of looking for jobs full-time and have to do something to earn a living, often in the informal sector. If we took this underemployment into account, the problem would look far worse.
What is not measured is difficult to monitor. We need to systematically measure employment data using welldesigned surveys. Over time, job intensity of the GDP has been coming down due to automation, and this trend will continue. With slowing growth, it is difficult to create jobs.
The jobs crisis is grave. Two telling statistics, drawn from PLFS 2017-18, are sufficient to buttress the point. All-India, between 2011-12 and 201718, (i) open unemployment went up from 2-3% to 6.1%, and (ii) workerto-population ratio (a broad measure of employment), for persons aged 15 and above, went down from 54.7% to 46.8%. Such a sharp fall was seldom witnessed in the past four decades.
The job crisis is real. The most reliable way of understanding the crisis is to look at GVA growth and its sectoral composition.
The job crisis is certainly not exaggerated, and the data is there to demonstrate it (PLFS and CMIE).
“THE JOB CRISIS IS CERTAINLY NOT EXAGGERATED. IT IS AMPLY DEMONSTRATED BY THE PLFS AND CMIE DATA”