India's Alarming Jobless Growth – Demographic Gain Down the Drain

As India grows more prosperous and more citizens get educated, the country is facing a major problem. While every country would kill for millions of graduates passing out every year, India is finding them to be a problem. The reason is that India is seeing jobless growth with a paucity of decent jobs on offer. The real topline growth of companies has stagnated and profits are not growing. In such an environment, hiring is anemic and restricted to a few sectors only. Corruption infested sectors such as telecom, aviation, construction have seen massive layoffs in recent times. The IT industry which used to be major employer of fresh graduates is also getting saturated and cannot find jobs for the torrents of graduates that pass out every year. The income inequalities are becoming more and more stark as billion dollar houses get built, while hundreds of millions finding it difficult to find two meals a day. This socioeconomic malaise is generally ignored by kool aid drinking investors pouring the billions of dollars into the India stock market fulled by zero interest rates.

ET

If you look at what happened in 2012, NASSCOM numbers, for example say 1.7 lakh people got additional jobs, are significant. In this environment, 1.7 lakh jobs are being created and these are good paying jobs. These are jobs that are created primarily for graduate. Under these circumstances, I would rate this very good.Now, even if the industry grows at around, let us say, 12% to 14% in 2013, an additional 1.7 to 2 lakh jobs will be created, and that is very significant. There are very few other sectors that are creating that many numbers of new jobs. I am actually optimistic. Having said that, of course we are about 7,00,000 to 8,00,000 graduates coming out, means that many of them will have to look for jobs in other sectors rather than just the IT sector. So there is some positive news in this, but it also means that the other sectors will also have to grow for the job scenario to improve. This is where I look at the overall growth of the Indian GDP. We need to get the growth back to 7-8%, which seems to be challenging right now. We all need to work together to see the growth goes back to 7-8%.

Asian White collar workers face Unemployment and Low Wages due to Increasing College Education

The spectacular growth in Asian economies like China, South Korea, HK, Taiwan over the last two decades has raised millions from poverty to a middle class life. This has led to increasing education levels among the new generation of Asians. Parents have poured a large part of their earnings into children education, which was seen as a ticket to a better life. But many of these newly entered work force participants are not finding the pot of gold at end of the rainbow. This is because the population of college graduated workers has increased significantly, putting  the laws of supply-demand against these workers. In fact  the wages of college educated workers have declined in some cases.

Perversely for these educated Asians, the wages of Blue Collar workers has increased at a much faster pace compared to the White Collar workers. While the wages for highly in demand skill-sets and experience approach those of the western counterparts, the wages for those with little experience and “commoditized  college degrees” continues to remain stagnant. This has been the experience in many countries across Asia like South Korea, India, China.