governance, political economy, institutional development and economic regulation

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Growth with jobs is the new Eldorado. At its core, the raging debate around job creation in India is really about how far India has traveled down the conventional path of industrialized development and its proxy — long-term employment, with defined benefits and social security. This metric of economic performance is anachronistic in the post-industrial ecosystem.

Long term, formal employment is declining even in the developed economies. The future of work is casual, possibly off-site, with skill sets and job descriptions that are constantly adapting to technology and re-schooling a necessity even for the middle aged. We may never ever reach the copybook stage of industrial age employment. India, unlike China, is largely informal and ineffectively regulated for work standards and safeguards. Out of a workforce of around 427 million, formal employment is just 14 per cent at 60 million.

Mind you, there are 972 million people more than 15 years of age who could work. But the lack of opportunity in the workplace and cultural constraints keep 56 per cent of then (a vast majority of them being women) at home. This probably explains our penchant to get to a higher level of formalized employment, say 60 per cent of the workforce, and thereby resemble a developed economy.

Statistical jousts around employment

The ongoing statistical debate between government economists (of the Niti Aayog and those in the Prime Minister’s Economic Advisory Council) and external experts (from CMIE, for example) revolves around the number of jobs created since 2014 as an index of economic performance. The CMIE data, based on quarterly surveys, shows that net-job creation in 2017, over the previous year, was just 1.4 million, primarily due to large job losses of seven million among young adults (aged 15-24) and three million among veterans (aged 65 or above) significantly diluted the positive impact of an addition of 12 million jobs in the age group of 25 to 64.

The government appears disinclined to trust large surveys. It prefers to rely on the monthly payroll data. There is the inexplicable issue of just 12 per cent of women, of 15 years and above, being part of the workforce in the CMIE survey data. Gallingly, 21 per cent of Saudi Arabian women work. Can it be that 88 per cent of Indian women above 15 years actually do not wish to work? Compared to such quirks in the CMIE survey data, there is a comfortable certainty about the payroll data. The only problem is — payroll data is unlikely to provide the granularity required across a largely informal economy.

Even if one is disinclined to believe the outlier estimation by economist Surjit Bhalla, of an addition of 15 million jobs in 2017, the good news is that data from the Employees Provident Fund Organisation (EPFO) shows an addition of three million jobs during the six months till February 2018 — an encouraging growth of 10 per cent per annum over the 60 million employee accounts. It is unclear, however, if these are all new jobs. The digital outreach, increased tax oversight and the GST implementation are all encouraging formalisation of operations, including payments to existing informal workers. Payroll data from the New Pension Scheme for government employees shows a similar happy trend, with an addition of 0.4 million employees to the base of around 5 million employee accounts.

It remains unclear where this statistical jousting is leading to, except to the scoring of political brownie points with the relevant political constituencies.

Workers under threat – too many, chasing too few jobs

headload

For the large mass of workers, a “formal” sector “good” job in the classic industrial sense of the term is becoming increasingly unlikely. Humans are under threat. Karl Marx was on the button, two centuries ago, when he intuited that it is humans who add value in the economy. We still do. But we became so good at extracting value from human effort that we have marginalized ourselves.  Machines today, substitute for all but the most advanced cognitive human skills. Once machine learning becomes deeper and autonomous of human effort, technology czars like Ellon Musk, presciently point to a dystopic, machine versus man future for the planet.

We do not have to imagine what it will be like in in 2050. Even today, deepening levels of worker anxiety about retaining a job affects large swathes of the developed economies. Indians and others in the developing world are already well acquainted with this syndrome. We hesitate to take medical leave even when we are sick. And if you think that happens only in the informal sector, think again. Even politicians and senior government officials fear being nudged out, merely by not being visible.

Low levels of formal employment require enhanced government intervention. As work becomes intermittent or irregular, even for skilled employees, the potential loss of income must be cushioned by social protection schemes to keep individuals and families afloat.

Listen to the Jholawallahs

Dreze Aruna

The NREGA program is a basic form of such cushioning, which benefits around 20 million manual workers. Jean Dreze is right when he asserts that access to work is more than just another way of putting public money into needy private hands. Aruna Roy has the same message. Collectives have a dynamic, which empowers the marginalised. They provide institutionalized support for challenging traditional, arbitrary and often illegal entitlements. They also establish a new and healthy tradition of direct democracy.

The early noughties presented a future which looked impossibly bright and full of possibilities, girded by shining bands of opportunity crisscrossing the globe. That vision has now dimmed. The environmental, cultural and institutional limits of globalization are now visible. We would do well, however, not to be blindsided by the inevitable ratcheting down of global aspirations. It could turn out to be a hard landing for the overly ambitious.

Adapted from the author’s opinion piece in The Asian Age, May 5, 2018 http://www.asianage.com/opinion/columnists/050518/jobs-nature-of-work-it-may-be-time-to-rethink-basics.html

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