Knocking on heaven’s door, but no answer: India's employment crisis | Number Theory

There are very few good salaried jobs in India

New Delhi : The first part of this series looked at official data on the intersection of education and employment in India and explained why the educated youth are angry about education not helping them get a good job and also why they are trying to pivot towards education that could help solve this crisis. This part will take the focus away from education to the larger economy, where jobs are to be generated.

There are very few good salaried jobs in India (Unsplash)

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  There are very few good salaried jobs in India

  Unemployment in India is more about postponing the day of settling for an undesirable job than about not finding a job. PLFS data shows this clearly. Only 24% of India’s working people have a salaried job. A large share of this small pie comes with sticks rather than carrots. 39% of India’s total salaried jobs do not offer a written contract, paid leaves, or any social security benefit. Only 32.5% of them offer all three. Getting a government job significantly increases the chances of landing the latter than the former kind with no perks. 64% of government jobs come with all three perks compared to only 24% in the private sector. Add to this metric the job security that comes with a government job, and one can understand why millions of educated young job-aspirants keep slogging to crack a government job exam. It also explains why paper leaks make them so angry.
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  Dearth of good private sector jobs is despite corporate India spending more on salaries as a share of income

  This is the most damning piece of statistic. It is one thing for the private sector not to generate quality employment because company owners are stingy about spending on salaries. The Centre for Monitoring Indian Economy’s Prowess database shows that the trend in India has been the opposite of companies not wanting to spend money on salaries. The ratio of company income to their spending on employee compensation fell almost consistently from the 2010s until the pandemic in India and seems to have stabilised now. This means that companies are spending more, not less on paying their employees. To be sure, it could perfectly be the case that this spending is going towards paying fewer highly paid employees rather than creating more decently paying jobs. The point is, even an increase in relative spending has not helped the crisis of good jobs in India.
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  This is why India desperately needs to crack the manufacturing code

  There are an estimated 503 million people in the 15-34 years age-group in India, according to World Bank projections. If the PLFS numbers are to be believed, about 20 million of them are unemployed. Even if all entrance and job examinations were held perfectly efficiently and properly, only a fraction of this population will get employed. It is also utopian to think that all of them make the cut for high-skill white collar jobs. What a country the size of India, already the most populous in the world, needs is not just a well-functioning white-collar education/job selection mechanism but also an economic engine which can generate decently paying jobs at a much larger scale. Economic history tells us that the only way to solve this problem is via manufacturing and exports. India’s manufacturing as a share of its GDP has been largely flat even after three and a half decades of economic reforms and its merchandise trade deficit relative to GDP has actually increased rather than decreased post-reforms. It is the single most important policy failure in the country, something which cannot be pinned on the government alone, as the private sector leads the government by a distance when it comes to India’s manufacturing landscape. As was pointed out in these pages a couple of months ago when factory workers erupted in protests in Delhi’s suburb of Noida, manufacturing actually entails a negative premium in incomes compared to other occupations over time and also forces poorer working conditions.

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