India must be careful: Jobless growth can lead to social unrest
Social security in the form of unemployment benefits could be one way of ensuring social stability, while continuing to heavily invest in education and skilling
With the assembly elections over, one of the big issues which will hog public attention in the coming days is the Jat agitation. Before leaving Delhi after their protests on March 1, the Jats promised to come back on March 20 and convert the city into “Jat land”. Whether they will manage to do that or not only time will tell but the reasons for their anger --- lack of jobs --- will stay.
The lack of adequate employment opportunities was also the key reason behind the recent agitations of the Marathas in Maharashtra and the Patels in Gujarat. This link between such social unrest and high unemployment rates was brought up by Arun Maira, the former India Chairman of Boston Consulting Group, during a meeting organised by Confederation of Indian Industry.
He said that India needs to create jobs or else there will be social unrest. According to the former member of the Planning Commission, India produces the least number of jobs per unit of growth. “The growth of the country should not be measured by GDP alone, but by the quality of jobs, livelihood and jobs that are created,” Mr Maira said.
In fact, this is not the case only in India. According to the International Labour Organisation, the global unemployment rate is expected to rise modestly from 5.7 to 5.8% in 2017 representing an increase of 3.4 million in the number of jobless people. The number of unemployed persons globally in 2017 is forecast to stand at just over 201 million – with an additional rise of 2.7 million expected in 2018 – as the pace of labour force growth outstrips job creation, according to the ILO’s World Employment and Social Outlook – Trends 2017.
The ILO’s social unrest index, which seeks to proxy the expressed discontent with the socio-economic situation in countries, indicates that the average global social unrest increased between 2015 and 2016.
In fact, between 2015 and 2016, eight out of 11 regions experienced increases in the measure of social discontent, most notably in the Arab States.
The lack of jobs is not just one challenge for India: Increasing automation will also take away many existing jobs. The policy prescription (job creation) is straightforward but, as India is increasingly finding out, not easy, especially because the level of literacy and skilling is poor. The gap between numbers of jobs created and jobs required has widened despite strong GDP growth during the decade of the 2000s. Every year, 10-12 million young people join the labour force, and five million people leave agriculture to join the non-agriculture sectors. Thus, there exists a total demand of 17- 20 million new jobs per annum. In such a scenario, social security in the form of unemployment benefits could be one way of ensuring social stability, while continuing to invest heavily in education and skilling.