More than 12 million Indians join the labour force every year, right? Wrong. This statistic has been used so often that it’s become gospel truth. Labour economist Radhicka Kapoor points out that it’s an outdated number. “That figure is from NSSO rounds between 1999-2000 and 2004-05. The NSSO rounds between 2011-12 and 2017-18 show the figure is over two million (20 lakh) a year,” the economist tells me.
While the unemployment figure is rising, the number of people entering the workforce is declining. This is also reflected in the labour force participation rate, which includes people who are either currently employed or looking for employment. This figure is also declining, more so for the urban youth.
That’s an interesting paradox. With more unemployment, the number of job seekers should also swell. But that is not the case.
What explains this paradox? The people dropping out of the labour force are, in all likelihood, those who have given up on finding employment. They are ‘discouraged workers’.
This helps us understand why we don’t see mass protests against rising unemployment in India. People protest when they think it can result in some success. There has to be a sense that they can get what they are asking for. But the state of the Indian economy is so bad that people are giving up on the hope that they could find work. They are returning to their homes and villages, surviving on odd jobs, subsistence farming or living off joint family incomes – stuff that are often not recorded in surveys.
Protesting the possible
People protest over violence against women because they think the government can do something about it. There’s public resentment against rising onion prices because people think the government can do something to reduce it. People protest for change in reservation status to get more government jobs because they think it is possible.
There are other reasons, too. The worst hit by rising unemployment seems to be the landless rural poor, and they are often not organised enough to protest. Ideally, the opposition parties should be giving them voice but the opposition is the most under-employed. Yet, we see this reflected in rising demand for work under the National Rural Employment Guarantee Scheme (NREGS).
India’s unemployment rate, according to the Centre for Monitoring Indian Economy (CMIE), is 7.48 per cent in November 2019, a sharp improvement over the previous month’s figure of 8.45 per cent. More telling is the labour force participation rate, which is still falling.
While rural unemployment nearly doubled between 2013-14 and 2017-18, urban unemployment increased by about 50 per cent in the same period. Perhaps it will take a lot more urban unemployment for university youth to start protesting because they don’t see any hope of getting a job — like the rural landless labour. The good news is that, according to latest figures, India’s urban unemployment rate is beginning to fall. Nevertheless, an unemployment rate of over 9 per cent is very high, and would cause widespread social unrest in most parts of the world.
There has also been a rise in the number of unemployed among educated youth, in both rural and urban India. These days, in India’s villages, you can meet middle-aged people who would ask you why they should educate their children if there are no jobs. But such questions don’t result in mass anger, the sort you would see about inflation.
“Inflation affects everybody,” says Mahesh Vyas, the managing director and CEO of the Centre for Monitoring Indian Economy. “Out of 100 people, all 100 are affected directly by food inflation. But a 7 per cent unemployment rate means only seven are unemployed.”
That explains the absence of collective social angst against unemployment. “People also tend to blame themselves for not getting a job. Maybe I wasn’t good enough, maybe I have bad luck, or the wrong caste, maybe I can’t find a job because I don’t have the right connections,” says Vyas.
The absence of collective angst, the feeling of insurmountable despair — none of this means the unemployed aren’t unhappy.
Looking for hope
The absence of protest is not the same as being happy, or even satisfied. If the situation is so dire that people have given up on the possibility of finding employment, it means they are looking for hope.
Narendra Modi gave them hope in 2014. As prime minister, he failed to live up to those hopes, at least as far as job creation goes. In 2019, the opposition seemed worse than a failed Modi. A reporter asked unemployed youth in Bihar why they were voting Modi in 2019 even though Modi had failed to find them jobs. They didn’t have to think of a reply: will Rahul Gandhi give us jobs? They even added that if anyone might give them jobs, it was Modi.
In other words, India’s high unemployment might start reflecting in its politics only if and when there is a new leader who can give people the hope that s/he knows how to create jobs. Anyone can stand up and say I will give you jobs, but people will buy it only if the promise seems credible. We need a leader, therefore, who has some track record in job creation, or some past experience that can convince us that this person can actually turn around the economy.
Is there any such leader from any party in India today? Can Arvind Kejriwal or Amarinder Singh or K.C.R. Rao or Nitish Kumar or Yogi Adityanath know how to create mass employment? Alas, nobody. All they know is state welfare programmes.
India’s political class needs to stop waiting for mass protests against unemployment. Instead, it needs to start talking about private sector job creation as a political objective, US-style.
Views are personal.