Millennium Post

Driving out underemployment

Job policies must focus on quality and ensure an uplifted livelihood

Driving out underemployment
It is good to know that the government is working on a first-ever national employment policy that will address the crucial issue of job creation in the country. The policy is intended to outline a comprehensive road map, with focus on the creation of quality jobs across sectors through economic, social and labour policy interventions. It is expected to be announced in the upcoming budget session, though it may take several months before the final document is ready. The task is, by no means, easy. The existing economic environment and job market situation are quite complex. Manufacturing, a universal source of stable employment, is playing a second fiddle to the services sector. The government's 'Make-in-India' programme is yet to make an appreciable breakthrough. Imports of low-technology products and components are flooding the market. Job seekers are increasingly facing the curse of underemployment, part-time and contract assignments and low remuneration. As it is, their future looks uncertain. High unemployment rates generally benefit employers to freely fix employment terms based on the demand-supply situation.
Hopefully, those in the government are fully aware of the rising trend of underemployment where workers' jobs don't use all their skills, education, or availability to work. There is as much a problem of visible underemployment as disguised unemployment. Going by the routine definition, under visible underemployment, employees work fewer hours than is typical in their field. They are willing and able to do work more hours, but cannot get full-time employment. They often work two or three part-time jobs, just to make ends meet. In the case of invisible underemployment, workers are in full-time jobs that don't use all their skills and qualifications. Unfortunately, the latter is becoming increasingly common for want of jobs suitable to one's education and skills. This type of underemployment is difficult to measure. It requires extensive surveying that compares workers' skills, education versus job requirements. Workers have little choice to find jobs that will realise their skills. Underemployment has a more adverse effect on those with college or post-graduate degrees in technical or general education. Frequent media reports show how overqualified people have been looking for jobs even in the Class IV category, under the state and central governments. After the new Pay Commission awards, more secure government jobs, which now carry a somewhat decent remuneration across categories, are being increasingly preferred by job seekers.
Recently, huge job losses of engineers and skilled workers in IT, telecom, steel, engineering and mining, mainly in the private sector, are posing a new challenge to India's growing unemployment market. Overseas job visa restrictions, mergers and amalgamations in the telecom, steel, banking and other sectors, bankruptcy proceedings and depression in certain industries are severely impacting industries in multiple sectors. The telecom industry alone lost a quarter of their employees in just the last two or three months. It had to undergo layoffs due to various reasons such as company mergers, shut-downs and fierce competition. This instability in the market has affected startups. According to Amit Jain, director,, "It is not that the people are lacking in talent or are not capable of doing anything, but due to being surrounded by negative energy, their success is being hindered. In October, most of the calls we received for job consultation and counselling are from the people of the telecom sector. Out of all job counselling related calls, the ratio of calls from the telecom sector increased to 45 per cent from an earlier 20 per cent, in the past couple of months." This insecurity and hesitation are certain to increase over the coming months as the industry norms are changing rapidly and competition is getting fiercer by day. In order to save on the expenses, companies naturally get rid of employees, who account for nearly five per cent of the operational costs in the telecom sector.
Under the circumstances, the government's hands seem to be tied. The proposed national employment policy will require a thorough research not only on how to create new jobs for entrants but also on retraining job losers to find fresh employment elsewhere. It must find ways to offer financial sustainability to both job losers and new job seekers. It must be able to financially support those after retirement. The present minimum pension for retired industrial workers, above 60 years of age, is ridiculously low, only Rs 1000 per month. While government pensions are dearness allowance linked, industrial workers receive only a fixed pension. The cost of social security and survival concerns of industrial workers will have to be borne by the entire society and not by their employers alone. The fast growth of the retail sector and e-commerce has made the employment scene highly complex and uncertain for employees. According to the latest joint report by FICCI-NASSCOM and EY, nearly 25 per cent of the workforce in the retail sector would be deployed in jobs that have radically changed skill set requirements. Most industry experts believe that the creation of highly optimised supply chains would drive growth in retail in the next five years. "New business models such as e-commerce and mobile-based e-retailing are increasingly becoming popular in India across Tier I, II and III cities. The impact of this growth is already visible on the job market," says Anurag Malik of EY.
Understandably, a multi-pronged employment policy will include incentives for employers to create more jobs, reforms to attract enterprises and help for medium and small-scale industries, which are major job providers. The policy is expected to take up the twin issues of providing quality jobs to over 10 million youth being added to the country's workforce every year and ensuring that more of these are created in the formal sector. As of now, barely 10 per cent of the country's 400 million workforce is in the organised sector. IPA
(The views expressed are strictly personal.)

Nantoo Banerjee

Nantoo Banerjee

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