Unemployment Crisis in India

We have said a number of times that employment and underemployment remains India’s biggest problem and it has no easy solutions. Despite the new government’s strong intent and actions, the issue is so big and huge that no amount of solutions can help fight this crisis. India’s massive population and lack of economic development has ensured that there are thousands of people for any decent job that comes up.

Also read India’s Employment Crisis takes a turn for the worse with E-Commerce Industry Losses.

Educated Indians applying for a janitorial job

The problem can be seen in a recent recruitment listing for a municipal sweeper job, which is basically the job of a janitor at a municipal corporation in Kanpur, which is a city located in India’s most populous and underdeveloped states of Uttar Pradesh. Approximately 3000 vacancies were advertised with a monthly salary of around $200-300. This received job applications of over 500,000 which implies a ratio of more than 150 to 1. The more surprising thing was that this job, which required no education qualifications at all got application from highly educated people. Some of the applicants are post graduates, showing the acute job crisis that India faces. About 93% of MBA graduates earn less than $2000 a year in India!!

White collared work in India for lower skill levels is so bad paying that it makes sense to do blue collar work. You can get engineers and MBA’s to work on less than $200 a month, which implies that it might make more sense to work as a household help or a cleaner, where one has the opportunity to earn ~$300 a month. Janitors in Indian government will also get job security, which is a mirage for most of India’s workforce. Note more than 85% of the work is in unorganized sectors without any formal contracts in India.

Make in India & Service Industry

While the new Indian government has made massive efforts to boost employment, it remains to be seen how many jobs it can create. With a million new people entering the work force every month, it is a huge challenge to provide decent jobs, which can provide above poverty level wages. India’s agriculture sector which has around 600 million people working on it could easily do with a much smaller workforce. But this huge population cannot find decent jobs in the services and industrial sectors. The governments’ “Make in India” policy cannot hope to provide a fraction of the required jobs, even if it succeeds given the huge demand supply gap. Services can absorb a large chunk, but that would require focusing on skills as well as agreements with other countries that would allow easy exports of services and people.

Resettlement of Indian Population

India probably needs radical solutions like tying up with countries like Japan, which need people to fill the gap of its declining population. Resettlement of large chunks of the population will not be possible, given that most of the earth’s landmass is already settled. Britain managed to capture large chunks in the 17-18^th century, occupying and capturing huge land masses such as Australia and USA. The other European countries such as Spain, Portugal captured large chunks of South America. The only places left are Antarctica which is too cold for human settlers.