No Job, No Security

The world's number of unemployed workers and those with precarious employment is expected to rise during 2016 and 2017. The worse news is that the true number of those in these categories are probably significantly undercounted.

The International Labour Organisation (ILO), a United Nations agency that just issued its "World Employment Social Outlook," predicts that 200 million people will be unemployed in 2016, three million more than last year. This will be most acute in middle-income and poor countries, where unemployment is forecast by the ILO to increase by 2.4 million with a slight decrease in unemployment in the most developed countries. Brazil and China alone are expected to add 1.5 million to the Unemployment rolls in the next two years. And India doesn't lag far behind in racing to the bottom.

The percentages of those with precarious employment is much higher in developing countries than in the advanced capitalist countries, but in all parts of the world the labour force participation rate—that is, the percentage of those of working age who are employed—is slowly shrinking and is forecast by ILO to continue to do so through the rest of the decade.

The one issue that 25 years of economic reforms in India have been unable to address is adequate job creation. Few can dispute the fact that the first decade of this millennium saw the fastest rate of growth ever for the Indian economy. Even fewer would question the fact that this was also the period that witnessed an abnormally low rate of growth in job creation. The result : jobless growth.

It was during UPA's tenure that the first serious debate on jobless growth came to a head. The trigger was the release of the 66th round of the National Sample Survey Office (NSSO) data on employment in 2011. It showed that between 2004-05 and 2009-10, only 1 million jobs were added per year; in a period when the economy averaged a record 8.43% growth annually.

In this period, 55 million people joined the labour force. So, another way of looking at it is that a staggering 50 million failed to find employment—a vexing political challenge indeed.

C Rangarajan, the then chairman of the Economic Advisory Council advising the Prime Minister, very candidly admitted as much : "The 66th round results do leave us with an unanswered question: How do we explain a decline in the labour force in a period where both population and GDP (gross domestic product) were growing strongly".

The reality of lack of employment generation and its effects is far more complex than what is made out to be in the rhetorical exchanges.

For one thing the nature of Indian manufacturing (which is being bandied about as the one-stop solution to the jobs crisis) is not employment-friendly. Most of them are automated and any employment is highly skilled. Yes, they will contribute to growth, but not necessarily to employment.

Clearly, there are structural fixes needed to address job creation in the Indian economy. But the challenge is what to do in the intervening period— given that 12 million join the labour force every year. The NDA may have hit on a stop-gap solution by pulling out all the stops with its focus on encouraging small enterprise—specifically targeting Dalits and women through the Stand Up India Programme—by facilitating loans (lack of credit has been one of the biggest impediments facing potential entrepreneurs). The NDA is acutely aware of the risk of failure of its strategy.

With job creation likely to be a key issue in the next general election in 2019, especially in an aspirational India, politicians on both sides of the aisle are on notice.

Desires by industrialists and financiers to press their offensive against working people are behind "free trade" agreements that eliminate barriers to the movement of capital, encourage shifting of production to places with ever lower wages, and impose restrictions on the ability of governments to implement, or even maintain, laws safeguarding health, safety, labour rights and the environment. These are simply the expected outcomes under the logic of neo-liberalism. No regulation can change that. Only a change of economic system can achieve that. And that is not on the agenda of any political party. Even the Communist Left has stopped talking about it.


Vol. 48, No. 49, Jun 12 - 18, 2016