In the late noughties, Raju Kumar escaped the drudgery of a life of agricultural debt when he left his village near Patna to move to the National Capital Region, at the young age of 17. After several years of toiling as a daily wager at a construction site in Gurugram, his ability to learn fast and his friendly personality came to his aid, allowing him to move up the ladder from being an unskilled labourer to a carpenter on contract for the duration of entire projects. Five years ago, he saved enough from his earnings to buy a room for himself in an overrun slum in Kapashera near Gurugram, and started sub-letting and sharing this space for a small fee with another labourer who kept different hours. When 2020 threw a spanner in the works, he jumped at a business opportunity that presented itself.
His latest tenant was a fruit-seller who plied his wares on a cart to the posh farmhouses of nearby Pushpanjali Farms—a job that lockdown had not affected. Hence, as soon as borders reopened, Kumar increased the rent and took off for his village. He has stayed there ever since, marrying locally, and living off the rent he gets month-on-month from his grateful tenant, who enjoys the extra room and whose ‘essential’ business boom allows him to pay the increased fee.
Sujata Meena from Raipur had been living her dream of being an air hostess for a private airline for just about seven months when the pandemic struck. All cabin crew plying domestic routes were grounded and asked to stay home till further notice. At first, she did not receive her salary for three straight months, and a month later was informed that her services would no longer be required.
Dejected, she went through a phase battling mental health issues and stayed home without proactively searching for a replacement job. Over months of counselling and her parents’ dedicated care, she got out of her funk, but now the job market had become even more competitive. Finally, after over a year, her uncle hired her to manage his fabric shop in a local market in the Chhattisgarh capital—a far cry from her qualifications and dreams.
Sheenabh Mehra from Bengaluru graduated from a highly ranked engineering college in 2020. When the nationwide lockdown was imposed, he was stuck at home without a job. Over the course of the next few months, he decided to change his career track and invest in online courses to learn the basics of digital marketing, as he saw his peers doing exceedingly well in that field.
In August of 2020, he finally landed his first proper job, where he was hired to handle the digital content of a logistics startup. From then to now, Mehra has shifted eight times, never staying at a company longer than three months. The incredible demand for digital experts made it easy for him to shop around for the highest bidder with startups readily accepting him despite his past record, in desperate need of his expertise.
Welcome to not just two, but three Indias—an India where distraught labourers are leaving the job market in droves, one where skilled workers are being forced into jobs well below their qualifications, and another where promising and qualified talent is unwilling to stick to a job. The Centre for Monitoring Indian Economy (CMIE) keeps track of these numbers by publishing data every month.
Their latest information shows that the unemployment rate in the country grew to 7.83 per cent in April from 7.6 per cent in March. Though quite a jump on the face of it, the number was significantly less than this time last year, when in the grip of the deadly second wave, India’s unemployment rate stood at a whopping 11.84 per cent in May 2021. Unsurprisingly, as per the latest data, urban areas are the worst affected at 9.22 per cent and in rural areas, the unemployment rate is at 7.18 per cent in April. It is clear that the pandemic rang the death knell for an already struggling economy, yet in reality, these disturbing figures had begun to rear their head well before Covid-19 was dreamt of.
It was the best of times, it was the worst of times…
As the current political regime completes its eight years of governance, a newly released survey by community connection platform LocalCircles shares that Prime Minister Narendra Modi’s popularity is at its highest since the start of the pandemic. The only two thorns in his blooming bed of roses are rising inflation and the state of unemployment, with 47 per cent of those polled believing that the government has not been able to address the latter issue adequately.
Moreover, the recent documents published by the government reveal a declining trend of regular employees in the Central Public Sector Enterprises (CPSEs). Temporary—casual and daily rated workers—accounted for 37 per cent of the employees of CPSEs in 2019-20 compared to 19 per cent in 2015-16. The reason is attributed to the voluntary retirement schemes that the CPSEs have been running since 1998 in order to downsize the number of employees on their rolls made redundant by automation.
However, as the elevated unemployment rate threatened to snowball into a political issue, Modi last week announced his government’s plans to hire a million people to fill the vacancies in various ministries and departments in the next 18 months.
The acute disappointment among India’s youth is evident from the widespread protests that took place in January this year, in response to the filling of seats for jobs in the Indian Railways. Roughly 10 million applicants reportedly applied for the nearly 40,000 advertised jobs in this sector—a shockingly large number in itself. However, it was the alleged irregularities in the Railway Recruitment Board’s Non-Technical Popular Categories (RRB-NTPC) examination results which led to violent protests in Bihar and parts of Uttar Pradesh, reflecting the abject frustration of students. Similar protests took place in UP by aspiring teachers over alleged irregularities in the 2019 UP exam to recruit 69,000 assistant teachers in the state. Here, about 3.5 lakh people appeared in the examination.
Shikha, who refused to share her last name for fear of persecution, was one of these teachers. She laments, “I cleared the exam in 2019 after so much study and preparation, and I still haven’t received my joining letter or place of posting! My parents are after my life to get married, and I was really hoping to earn my own living before that happened, so I could command some respect from my husband and in-laws. It is so difficult to be stuck in this position—I’m neither here nor there.”
The problem is not limited to just Bihar and UP, as is evident from recent CMIE data which asserts that the unemployment rate was the highest in Haryana at 34.5 per cent followed by Rajasthan at 28.8 per cent, Bihar at 21.1 per cent and Jammu and Kashmir at 15.6 per cent. However, it is the dropping rate of labour force participation (LPFR) which is the real point of concern. According to data collected by the World Bank, the LPFR reduced from 46 per cent in 2020 to 40 per cent in 2022. The high level of youth unemployment despite a very low LPFR does not bode well for the country’s overall growth.
Sumesh Nair, co-founder and CEO of Board Infinity, a platform that helps students and early-career professionals with career transitions, explains, “Following the second Covid-19 wave that broke in May 2021, India’s unemployment rate was frightening. The rapid emergence and adoption of new technologies as a response to the pandemic caused high unemployment due to business failures and the loss of jobs. As a result, the skill gap between job seekers with traditional credentials kept widening. There are reports that the active number of people who want to look for jobs are coming down.”
Follow your dreams?
Why are people dropping out of the workforce in such large numbers? Western media will have you believe it is largely due to the phenomenon known as ‘The Great Resignation’. This mass exodus of employees takes place due to various factors which include dissatisfaction with the pay scale, burnout and the burgeoning startup culture that has a high attrition rate. But these are not the only reasons.
In India particularly, the stark difference between the level of one’s higher education and the kind of jobs people get, often after a tremendous struggle, makes matters worse.
Take the case of Ahmedabad-based Naeem Khan, who despite having a PhD in Hindi Literature has been struggling to get any sort of job that assures stability. Last year, at the end of his tether and with two children to feed, he applied for the job of a peon in the state Vidhan Sabha building, to supplement his paltry income as a Hindi tutor. “I believed that getting the job would bring in a fixed income to the house every month, even if it is a very menial job,” he shares with candour.
Economic exigencies forced Khan to do what it takes, but many youngsters choose the easier route of freelancing or taking on projects whenever possible. Mostly consisting of students and homemakers, this segment often relies on rental income and the pensions of older family members as their main sources of income. This is most evident in the case of women, as CMIE data indicates that though women represent 49 per cent of India’s population, they contribute only 18 per cent of its economic output, which is about half the global average. This is corroborated by data collected by the World Bank highlighting that between 2010 and 2020, the number of working women in India dropped from 26 per cent to 19 per cent, and according to the CMIE, in 2022 this number is at a paltry 9 per cent.
Mumbai-based blogger and freelance social media manager Vidhya Thakkar is a good example. Living with her parents, she saves on rent and other expenditures, which allows her to focus on her career growth, and personal and professional satisfaction. She highlights that work had slowed down during the pandemic, but being a lone player, she was able to reduce her fees significantly in order to attract more work, and now that things are looking up again, she has raised her fee
The incredible rise of homegrown brands in the last couple of years has fuelled the growth of freelancers like her. It has also been responsible for the influencer industry growing by leaps and bounds. Ankush Bahuguna, actor and content creator, explains, “In the pandemic, content creation was one of the few professions that thrived. Yes, there were fewer paid projects, there were no brand deals for months at a stretch but there was a huge demand for content. So even though those few months weren’t easy financially, there was an exponential growth in our popularity. Also, earlier, brands had to organise large-scale shoots for TVC and digital ads, now it made more sense for them to channel those funds into influencer marketing instead because creators were self-sufficient to carry these brand campaigns on their shoulders. So, the initial slump was compensated eventually.”
We don’t need no education
Statistics from the 2018-19 Periodic Labour Force Survey (PLFS) shed light on some interesting facts. They show that by attaining higher education in Indian universities, people have lower job prospects, as these graduates do not want to take up menial jobs after investing in themselves through education. Hence, the unemployment rate actually increases with one’s education level.
Most universities organise placement camps and plan opportunities for their students, and this role has taken on extra importance in this day and age. Rajat Kalra, a student of History at a prestigious Delhi University college who graduated this year, was aware that job opportunities are scarce for someone with a degree in an Arts stream. He wasn’t interested in the pursuit of academia, nor did he want to study further to specialise in degrees like Media or Law. Hence, he jumped at the human resources job offered to him by a large multinational corporation that came to recruit at his campus late last year. “I don’t know the first thing about HR, to be honest, but I’m excited to move to Bengaluru and start this new chapter of my life. Who knows, I may end up loving it!” he says excitedly.
The JAIN (Deemed-to-be-University) in Bengaluru was aware of the role they could play as an educational institution in the lives of students, and organised a large-scale virtual job fair called ‘Connect to Careers’ on the portal hireclap.com. Over 62,000 students participated from across India and a total of 1,140 jobs were secured by students of various institutions during the latest edition of this virtual job fair with 212 companies.
Though important, this initiative does not address why most graduates from small-town India are still considered unemployable. Some industry experts believe it is the quality of education they have received, others put it down to Indian apathy which prevents young graduates from pursuing jobs, as they prefer to try their luck with cushy, salary-assured government jobs based on exams. Further, the lack of overall refinement—in appearance, communication skills and language—adds to the problem.
The last of these is addressed by English-language coaching institutes which have mushroomed around the country like never before. Chandigarh-based Raminder Sandhu and Sonam Sandhu, co-founders of digital coaching platform IELTS Made Easy, saw exponential growth in the last two years because of the high demand for quality English language classes, and their first-mover advantage in going digital even before the pandemic. Raminder highlights that the demand of 8777 band teachers for IELTS coaching is so high, that these teachers hop around from institute to institute on a monthly basis, attracted by promises of a higher salary.
Solutions to a growing problem
If one goes solely by numbers, the data released by CMIE indicates that the unemployment crisis is improving, helped along by the increasing acceptance of digitisation. Job placement portals have begun to penetrate deep into Tier II and III cities, in an attempt to connect the masses with potential job opportunities. Atul Pratap Singh is the co-founder of one such platform—Noida-based Jobsgaar. He says, “The situation is getting better with time. Jobsgaar has listed over 10,000 jobs from the top three districts of Uttar Pradesh in less than 30 days with an average salary of Rs 17,800. We have also helped to break the myth that the Tier II and III towns of India have only blue-collar opportunities, as 62 per cent of the jobs listed were for the white-collar workforce.”
Nair of Board Infinity believes that a growing appetite for alternative credentials has contributed significantly to shrinking the skills gap and enabling people to meet the requirements for in-demand skills. Disha Singh, the Founder and CEO of fashion accessories brand Zouk, who retained employment of their artisans throughout the pandemic due to the high digital demand for their products, shares that this period pushed customers online, which gave them a big boost in terms of sales. This directly benefited their ability to work with artisans.
A large number of artisans undertook reverse migration during the first lockdown. To alleviate their problems, the Ministry of Skill Development and Entrepreneurship launched many schemes, including training, offering allowances for training centres in small towns, as well as introducing online skill training.
But is everyone happy? It appears not. “Why is the government not taking care of its citizens? And why are the citizens so blinded to this basic failure of our elected representatives?” asks Shikha from UP. Though Shikha is able to voice her frustration, many others chose the silent route, as evident from the report of the Union Home Ministry to the Rajya Sabha in February, which stated that 3,548 people committed suicide due to unemployment in 2020, when the first wave of Covid-19 hit.
As PM Modi plans his government’s employment push, industry experts advise the adoption of certain simple measures to effectuate easy and lasting change. These include focusing on labour-intensive technologies to further economic progress, laying greater emphasis on vocational education as opposed to lofty academic learning at a higher level, alleviating difficult circumstances that hinder the growth of the self-employed, actively adopting measures to control the population growth rate so the vast numbers of Indian youth can be somewhat contained, and most of all, ensuring that information pertaining to jobs and job seekers is easily available in the public domain.
As the Big Four go on a major hiring spree, startups absorb employees that have been dropped by others, and unconventional jobs begin to attract more people, now is the right time to implement changes at a policy level so the largest number of citizens can benefit. One must remember that the scourge of unemployment has led to the downfall of many a lasting empire, and has in the past, given rise to significantly worse scenarios—from violent protests, severe disharmony among the populace to debilitating mass migration—which stalls a country’s overall progress.
What causes unemployment
✥ When the pandemic hit, unemployment was already an issue, but the regressive job market in 2020 exacerbated its severity, as new graduates had it really tough.
✥ A lack of quality higher education.
✥ Lack of resources to teach new skills and skill shortages due to technological advancements. The rapid emergence and adoption of new technologies as a response to the pandemic caused high unemployment due to business failures and the loss of jobs. As a result, the skill gap between job seekers with traditional credentials kept widening.
✥ During the work-at-home era, we experienced a massive increase in jobs that moved online. Most of these jobs were available to early career professionals, including sales, data analytics, digital marketing, and web development
✥ Unfortunately, the skill gap prevented many job-seekers from filling these positions and it was impossible for large IT companies to close even half of their positions leading to a major revenue loss.
— Sumesh Nair Co-founder and CEO, Board Infinity
Natural Rate of Unemployment
The lowest level that a healthy economy can sustain without creating inflation. Natural unemployment contains three components—structural unemployment, surplus unemployment, and frictional unemployment.
The Great Resignation Also known as the Big Quit and the Great Reshuffle, the Great Resignation is an economic trend in which employees voluntarily resign from their jobs after the pandemic. Possible causes include wage stagnation amid the rising cost of living, long-lasting job dissatisfaction, safety concerns of the Covid-19 pandemic, and the desire to work for companies with better remote-working policies.
As of December 2021, 1 in 5 college graduates are unemployed. In April, India’s overall unemployment rate rose to 7.83%, up from 7.6% in March. The unemployment rate in urban areas was higher at 9.22% compared to 8.28% in March. In rural areas, the unemployment rate was at 7.18% in April compared to 7.29% in the previous month.
The unemployment rate was the highest in Haryana at 34.5% followed by Rajasthan (28.8%), Bihar (21.1%) and Jammu & Kashmir (15.6%). Between 2017 and 2022, the overall labour participation rate dropped from 46% to 40%.
Source: Centre for Monitoring Indian Economy
✥ India’s largely young and educated population on one side and mushrooming of startups on the other pose unique challenges when it comes to employment.
✥ Covid just added more fuel to the fire by stalling all commercial or economic activities, as there was job loss and a reduction in the creation of new jobs.