Global Unemployment

Unemployment is a major problem for both India and the world and has been repeatedly stressed in our blog over a long period of time. The problem is becoming worse by the day, with more and more young people looking for jobs even as the market shrinks. An IMF report stresses the huge problem that the world is facing today. 600 million people will join the global workforce over the next decade, which means that 5 million jobs will be required to be created every month. This is not going to happen unless some dramatic changes are made in the way our society functions. This looks unlikely given the current context. In fact we are facing a period of massive job destruction, as technology makes more and more job roles redundant. While earlier technology was killing jobs with routine functions such as filing, translation etc. now it is starting to replace jobs which require higher processing power.

Robot technology is also advancing rapidly killing jobs in manufacturing. Foxconn which is one of the world’s largest employers is planning to replace hundreds of thousands of workers with robots in its factories. Robots are not only more cost effective, but also more reliable and better quality. The world is also overpopulated creating a global ongoing crisis for good jobs. The young people are finding it hardest to get jobs as they do not have any experience or skills to get the foot in the door. It is estimated that one third of the world’s 1.8 billion young people are either unemployed or not partaking in any education or training. This will create a huge issue for the society later on, as the existing workforce retires and the replacement will not have the skills to plug the gap. Inequality is increasing around the world, due to globalization and capital concentration. On top of this unemployment creates an incendiary mix fueling potential unrest and disruptions for the society.

India faces a huge problem. Large portions of its workforce is already working in useless jobs, such as selling trinkets on the street or guiding cars in parking. They are working in low paying jobs which is mostly useless or could be easily be replaced by existing technology. As more and more people enter the workforce, this problem becomes more and more acute. Farmer distress is happening because there are millions of redundancies in the agricultural sector. Too many people working on small land holdings which cannot sustain so many mouths. India’s government is trying to solve the problem by trying the old formulae of export led manufacturing which would employ millions of semi-skilled workers. But this old formulae won’t work, as robotization of factories is happening rapidly. India remains extremely poor, so growth will be good going forward. Democracy also provides the escape valve for mass disenchantment. But for the young the world will remain a harsh place going into the future.