Number Theory | Protests over railway jobs are a grim reminder of the state of India’s job market
The protests over problems with recruitment for railway jobs in the states of Bihar and Uttar Pradesh, may well be India’s first large-scale unemployment riots
The protests over problems with recruitment for railway jobs in the states of Bihar and Uttar Pradesh, may well be India’s first large-scale unemployment riots. The protests have taken place across a large number of places in these two states. News reports suggest that at least 10 million applicants were hoping to get the roughly 40,000 jobs which were on offer. The politics on the protests notwithstanding – opposition parties have attacked the ruling Bharatiya Janata Party (BJP) over both the issue and police’s handling of it – they ought to be treated as a bellwether for the socio-economic unrest which India’s job markets can generate. Here are four charts which put this in perspective.
India has among the worst labour market outcomes for young people
An international comparison of some of India’s peers and neighbours using World Bank data shows that India has among the worst labour market outcomes for the young (the 15-24-year-old population). This can be seen in persistence of high youth unemployment rates despite a very low labour force participation rate (LPFR) among this cohort. LPFR is defined as the share of economically active population – either working or looking for a job – in the given age group. This number was just 27.1% for the 15-24-year-old population in India, which is significantly lower than other countries. Despite such a low LFPR, youth unemployment rate is among the highest in India. Unemployment rate is defined as the share of unemployed persons in the labour force. A time-series analysis shows that things have become worse on this front in India in the last 15 years.
The mismatch between education and employability has made matters worse
The mismatch between educational levels and employability has long been a running refrain in Indian labour markets. Statistics from the 2018-19 Periodic Labour Force Survey (PLFS) (the 2019-20 PLFS includes three quarters of pre-pandemic data and one quarter of the harshest lockdown, which does not reflect either the pre-pandemic situation or the post-pandemic one completely) underline the centrality of this problem, which is likely to have become worse since the pandemic. While enrollment levels, both in school and higher education, have been rising in India, this education has not given any special labour market skills to most young Indians.
In fact, one could make the counter-intuitive claim that higher education (of the kind which has been given) has actually harmed the job prospects of the young population because they are averse to taking up blue collar jobs and cannot find the kind of jobs they want. This is best seen in the fact that unemployment rate actually increases with education level. In the 15-29 age group the unemployment rate for the most educated is twice the value for all age groups. The reason there is a large demand for low-end government jobs in India is that their qualification and testing criterion are often set at general educational levels such as a higher secondary or graduate degree.
In most cases, private sector employment pays very poorly and is very insecure
When confronted with the employment question, encouraging job creation (as opposed to job seeking) has been one of oft voice-solutions by the current government. Why are young people not taking to this idea instead of competing for what are low-end government jobs and protesting on streets now? The simple answer is that even these low-end government jobs are better paying that what can be made in other kinds of jobs. Summary statistics speak for themselves. According to the 2018-19 PLFS, average monthly income in salaried employment was ₹16,160, significantly more than the ₹10,725 and ₹8,340 in self-employment and casual work (excluding in public works). Even within the regular job category, only a small share of those employed make what can be described as a significant amount of money. Money is not the only attraction which a government job brings. An even bigger reason why government jobs continue to attract young aspirants is the job-security on offer. An overwhelming 78% of salaried workers in the 15-29 years old age group did not even have a written job contract in 2018-19, which is also much higher than the 66% such salaried workers among those in the 30 and above age group that did.
Bihar and Uttar Pradesh are ticking time bombs because of the sheer size of the unemployed
In the 2018-19 PLFS, 25.5% of 15-29 year-olds came from just the two states of Bihar and Uttar Pradesh, roughly same as these two states’ share in the total population (24.5%) in the survey. Just because of their size, they also represent about a quarter of the unemployed in the country (23.5% among all age groups and 22.9% in the 15-29 age group). What may make their situation worse is their dependence on general education. According to a 2017-18 NSO survey on education, of people then enrolled at the graduate or higher level, 96% students in Bihar were enrolled in the general course of humanities, science, and commerce (70% in humanities alone) rather than in technical or professional courses in information technology, engineering, medicine etc. Only the relatively smaller states of Assam and Jharkhand have over 90% enrolment in general courses. Uttar Pradesh was not much better, with 85% enrolled in general courses. It is no wonder that Bihar and Uttar Pradesh have seen these protests this time.