With the government having decided to formally drop the quinquennial employment-unemployment surveys of the National Sample Survey Office (NSSO), as well as the annual jobs survey of the Labour Ministry, opting instead for what the NITI Aayog chief says will be a “more robust” quarterly data set, we officially do not know where we stand as a country on the issue of jobs.
There is no arguing the case for more robust data on jobs. Job creation is one of the key focus areas of economic policy and you cannot really have any kind of policy, leave alone measure its outcomes and effectiveness, without proper and reliable data.
Political controversy
However, the instant decision to call a time out on whatever data we have, in favour of a hopefully better set at some undefined time in the future, has already become the subject of political controversy, with the Opposition accusing the government of trying to hide its failure on the jobs front and the government accusing the Opposition of missing the big picture.
Recently, in Delhi, the Minister of State for Civil Aviation, Jayant Sinha, said the available data were simply not picking up on jobs being created in the economy. He pointed out that between Ola and Uber, a million people are productively employed as drivers (most accurately, self-employed as owner-drivers), which is simply not reflecting in the data being collected either by government or private surveys. And of course, the Prime Minister’s famous “pakoda seller” remark has already become a permanent part of contemporary political lexicon.
Sinha does have a point. The NSSO’s surveys may be statistically rigorous and are carried out across a large sample, but they happen only once in five years and are unable to pick up more recent changes.
The Labour Ministry survey covers only establishments with more than 10 workers, thus missing out on micro, small and medium enterprises, those who are self-employed, and the staggering 85% of the workforce engaged in the informal sector, rendering it pretty much useless as a policymaking tool. The Centre for Monitoring Indian Economy, which does its own jobs survey, does cover households but repeats the same sample, which again means that some large changes are missed.
Changing economy
The trouble is that while economists quibble over details and definitions, and politicians spar over numbers, the economy itself is changing at the speed of light. A recent report, ‘Future of jobs in India — A 2022 perspective’, prepared by consultancy major EY, in association with FICCI and NASSCOM, picks out an even more alarming trend. Forget the issue of creating enough jobs for the millions joining the workforce every year. There is now a real question mark over the future of those already employed, that too in the highly remunerative and growing sections of the organised sector.
In the five years from 2017, the report says that nearly half — 46% to be exact — of those currently employed will have to overcome major challenges just to stay employed in 2022. While 37% will have to be deployed in jobs which will require radically altered skill sets than those required in the jobs they are currently doing, 9% will actually be doing jobs that just don’t exist today.
The EY report is fairly limited in scope, covering only five major sectors in the organised space, which itself accounts for just about 15% of the total employment. But a deeper dive into even these five sectors paints a scary picture for those who are involved in these sectors.
In the IT-BPM sector, for instance, the report estimates that about 20% to 35% of employees will face an existential threat to their jobs within the next five years. In the rapidly changing banking and financial services sector which is being hugely disrupted by technology, job loss threatens 20-25%, while 55-60% of employees will require radically altered skill sets compared to what they have.
A real threat
The picture is less dire in the slower-to-change automotive, retail and textile and apparel sectors, but the inference is clear: quite a significant chunk of the creamy layer of India’s middle class, the ones who are earning, saving and spending to keep the economy moving, face a very real threat to their way of life, in a frighteningly short span of time. Remember, even car loans are given out for seven years — imagine being unemployed — and worse, unemployable — within five!
It is here that one worries that those shaping our policy response, principally our elected representatives (both in power and in Opposition) as well as the bureaucracy responsible for shaping a policy response, are missing the wood for the trees. The issue is not whether one set of data is better or worse than the other, but what we are doing about the bigger problem, including the private sector, which seems to believe that solving this skills and employment problem is someone else’s problem.
Remember, even a nation of pakoda sellers will need paying customers.
