Jobscape: demographic dividend, gig economy and election season

Welcome back to the Jobscape, our weekly round-up of news and opinion on the state of employment and job creation in India. This week we discuss India’s demographic dividend, election season and the gig economy.

Job creation news

Lets start with the good news. MediaTek, a Taiwanese chipset making company is looking to hire 800 people in India. Hooray! But seriously, hiring by major Information Technology companies has gone up around 300% from last year. TCS and Infosys alone hired over 50,000 employees in financial year 2018-19.

India currently boasts of 22 unicorns (start-up companies with a valuation of $1 billion or more). These unicorns, in the last two years, have created 13,000 jobs. These are only direct jobs. By some estimates, they may have helped create as many as 1 million indirect jobs.

The Khadi and Village Industries Commission (KVIC) has created over 2 million new jobs in the last five fiscal years under the Prime Minister Employment Generation Programme (PMEGP), according to its chairman, Vinai Kumar Saxena.

Japan’s Nomura Research thinks that Indian MSMEs can create 10 million jobs in 5 years. In 2017-18 the sector contributed around 36 million jobs in the manufacturing sector, which accounts to around 70% of the jobs in that sector.

When newspaper headlines scream “Job creation trebles in February at 8.61 lakh” we think it’s big news. The number is small – we need to create 2 crore (20 million) jobs every year. And EPFO data generally overcounts. So even the optimistic scenario doesn’t look so good.

India’s demographic dividend

60% of Indian job seekers are between 15-25 years of age. But by 2030 we will reach the crest of our demographic dividend with the percentage of our working age population reaching 65%. The window is closing on our demographic dividend. Unless our structural problems are solved, we may see anaemic job creation, social unrest and wider gender inequality.

This is true even at the state level. A question being asked now: Is West Bengal regressing and losing its demographic dividend? Industry has been leaving for some time, the workforce is ageing and the state government is just as leftist as the communists were. Different politicians but the same anti-market politics has hurt the state.

The gig economy

How “hot” is the gig economy in India? Initial numbers show that just Delhi and Bangalore may have created over 800,000 gig economy jobs in the second half of 2018. One of my professors at Yale, Judith Chevalier, has done some interesting research which shows that the flexibility offered by gig jobs has a clear economic value.

What kind of a work culture are millennials most interested in? In a two part series, Aileen Blaney discusses new office lifestyles and hustling in an Instagram work culture. The gig economy dominates jobs for millennials and social media is a huge channel for such jobs.

Bangalore based Global Alliance for Mass Entrepreneurship (GAME) has tied up with Facebook to train entrepreneurs in 10 states across India. Facebook has already trained over one million people across 150 cities and 48,000 villages with support from 50 partners.

It’s election season!

We have a lot of questions, and not many answers. Hopefully the coming weeks and months will show the way . . .

The elections are upon us and jobs are a major issue. Which party’s method will be better for India? The BJP, encouraging entrepreneurs or the Congress’s NYAY scheme? Are we now irrevocably in the gig economy where entrepreneurship is an important factor?

Politicians promise. Narendra Modi promised jobs in 2014. Rahul Gandhi is making similar promises in 2019. What’s new? Is it the magnitude? Gandhi is promising only 22 lakh jobs per year while Modi promised 1 crore. Or is it the backing of a scheme like NYAY? Or is it simply political posturing? We’ll know soon enough.

Perhaps the most important question is: will unemployment be Modi’s Achilles heel in 2019?

A survey for a “citizens manifesto” highlighted unemployment as a huge social and political issue. Solutions offered were reducing bureaucracy, improving ease of doing business and attracting significant foreign direct investment (FDI) in India.

 

The bad news

Azim Premji University (APU) reports that five million men lost their jobs in 2016-18, post demonetisation. The data used in the report came from the Centre for Monitoring the Indian Economy. APU’s solution to the jobs crisis is to create a “universal basic service (UBS) programme”. It estimates that just two public services: healthcare and education can create more than two million jobs. UBS, however, is like NREGA: a band-aid. To increase jobs, we need large, disruptive ideas which propel the economy. I don’t think UBS is in that ballpark.

If you’re young, highly educated, and live in Himachal, Kerala or Tripura, you’re going to find it tough to get a job.

The recent demise of Jet Airways has led to at least 20,000 workers losing their jobs. While this is a terrible outcome, all is not bad news. Jobs demand is greater than supply in the industry. SpiceJet has hired 500 Jet employees, including 100 pilots. Also, there may be opportunities in other, related, sectors like technology, e-commerce, large retail operations and logistics.

News from the states

Uttar Pradesh (UP) has India’s largest youth population at 40 million, but tiny Hong Kong’s economy is twice that of UP. It needs millions more jobs to be able to get these youth gainful employment. The state’s welfare schemes are mainly on paper. While job seekers are in the millions, the state’s Skill India mission trained 7,029 workers in 2017-18 – and that was the highest number of yearly trainees so far!

Rajasthan’s jobs crisis is tied to the slowdown in real estate, one of the big employers in the state. The patchy implementation of the Real Estate Regulatory Authority (RERA) Act and the ban on illegal sand mining have contributed to the slowdown. However, if Bikaner is to be an example, the PM needn’t worry. Unemployed youth in Bikaner still root for Modi and the goodwill the BJP enjoys has not waned, even after the Rajasthan assembly election loss in 2018.

In Punjab’s industrial hubs like Ludhiana, high wage jobs are hard to come by and educated youth are frustrated.

Gujarat goes to the polls today (April 23). Will the BJP repeat its clean sweep of 2014 or will rising unemployment and disaffection make a dent? Discontent seems to be growing. For example, even after the 10% reservations, Patidars in Gujarat are still looking for jobs.

Women and jobs

As we’ve discussed earlier in this column, women are discriminated against in the job market. IndiaSpend has some recent research which shows that as rural and farming jobs constrict, it is, once again, the women who bear the brunt of the job losses.

A sliver of good news for women comes from the maritime industry where there is a concerted effort to create more shore jobs for women.

 

Blame the data!

Amitabh Kant, CEO of Niti Aayog, questions the unemployment data using a counterfactual: high growth is not possible without job creation. Mr. Kant, perhaps, has not heard of India’s low employment elasticity of growth. Of course, the PM believes that all the jobs data statistics are wrong!

Hardeep Singh Puri, a former Indian Foreign Service officer, and currently Minister of State (with independent charge) of Housing and Urban Affairs, is honest enough to state that India may have an employment crisis. But, in the same breath, he blames the data. It’s always the data!

While the debate on jobs data continues, there is also a human dimension to it—underemployment, where qualified teachers work as drivers to make ends meet.

Other stories

The Chinese think Indians don’t work too hard. They advocate the “9-9-6” rule: work from 9 am to 9 pm, six days a week.

Former RBI governor, Raghuram Rajan, is forthright in his support of free trade. Protectionism doesn’t really help preserve jobs. New technology is a bigger destroyer of jobs and the only guarantee against redundancy is constant retraining.

At one time, getting an engineering degree was enough to guarantee a decent job. Today, with over 80% of engineers being “unemployable”, new skills in AI and automation are needed to keep abreast of the changing tech landscape.