Maximising job prospects amid pandemic

In any economy, increased growth entails increased employment. But this relationship is worsening due to factors including labour-saving technology

All development effort is expected to and should lead to maximising employment opportunities. All able-bodied and willing people should be enabled to be employed. During the years preceding the Covid-19 outbreak, there was a general decline in growth, capacity utilisation and demand. The pandemic just added to the economic misery. Crores went back to their relatively poor native villages fearing unemployment and starvation in bigger cities, which had once lured them with unceasing earning opportunities. The manufacturing and service sectors in cities suffered a major setback, with feeble signs of recovery.

Green shoots are emerging now and employment is believed to be slowly picking up.

It is common sense that in any economy, increased growth entails increased employment. But this relationship is proportionately worsening due to many factors, including the use of labour-saving technology, Schumpeterian ‘creative destruction’ and capital, and of course the officially advised studies/changes in manpower use and suggestions for methods that downsize labour, particularly in the government. The private sector is generally not committed to employing more labour and is instead resorting to labour-saving devices, including outsourcing, employing gig workers, mechanisation etc. In this trade-off, capital is winning and labour is continuously losing; complementarily, the organised sector of labour, the phenomenon of standard secure incomes, is shrinking. Systemically, there is declining employment elasticity of GDP growth: this is otherwise called jobless growth, possibly pejoratively. During the 1990s, every one per cent growth in the GDP resulted in 0.4% growth in employment; it worsened to 0.2% during 2010-2020. The pandemic further hit employment prospects with cessation/disruptions to the economy.

But there are areas of activities where labour is greatly absorbed. Sector-wise, there is differential absorption of labour. Parallel to this is the relative lack of skills in the expanding fields of production and service rendering. The construction sector is said to absorb more labour even though there is continuous mechanisation of sub-processes. Expansion of affordable housing to the poor and lower middle classes will provide more employment on city outskirts and in small towns and villages. Villagers, who are finding seasonal employment in agriculture rather uncertain, can be absorbed in construction in nearby locations.

Another area is transport and road construction, water body upgrade and maintenance, where willing villagers may be employed. Every lorry on the road is said to absorb 5-6 labour, and more lorries and cargo autorickshaws plying on the roads will mean more lucrative non-farm employment to villagers. Marginal farmers’ monthly family incomes stood at Rs 4,600 during 2012-13; it increased to Rs 9,099 during 2018-19. In view of continuing inflation and erosion of the value of rupee, this means a real decline in family incomes. Thus, any encouragement to an increase in non-farm incomes in villages will make the marginal farmer and landless agricultural labourer less poor.

Cities and urbanisation processes are increasingly unenthused about rural-urban migrants despite the exodus. Demography policies have to encourage the retention of rural populations in their native villages. Here, agriculture, particularly diversification of crops in dry land farming and raising superior food and livestock, holds the key to increased incomes and employment for all, including women. Labour in these times of lower population growth and longer education years will be more productive and possibly more versatile. All these hold out hope for increased production, productivity and income.

Almost 60% of India’s population live in villages, where most of the poor are concentrated. The return of migrants to lowly endowed native places in poorer states has compounded the problem. This poverty is characterised by low and uncertain incomes, unemployment and underemployment and the endemically low affordability and intake of nutrition, particularly among women and children.

Access to nutritious food has to increase along with their availability. The demand for and use of superior food in schools, ante- and post-natal centres and anganwadi meals will result in superior food production, dry land farming, multi-farming and rotation of crops. These renewed, re-vogued practices will promote the spread of employment among the poor and landless. Once their incomes become stable, all-round demand, even for urban goods and services, will pick up. This is indeed a pro-village transformation focusing on employment in India.

(The writer is former professor, Maharaja’s College, University of Mysore)