Friday, 1 April 2011

Water Water everywhere ......

........ Nor any drop to drink, goes The Rime of the Ancient Mariner by Coleridge. He could very well be describing the labour situation in India. It seems to be one of perennial shortage. How can this be ?

After all, India is a land of 1.2 billion people. The unemployment rate is officially at 9.4 %, but we all know that the real number is much higher. This is because of seasonal employment in agriculture and unemployment outside the seasons. Underemployment is even higher - getting some job just to exist, but capable of doing much more. While India's growth is impressive in recent years, it has created nowhere near the number of new jobs required to cater to the number of people entering the job market every year. And India is a young country, not an ageing one. More and more people join the workforce each year.  The unemployment situation is so acute that the government runs a hugely expensive National Rural Employment Guarantee Scheme. And yet, ask any company what their biggest problem is - finding people to work for them and then staying.

At the more skilled levels, this talent shortage is easy to understand. The education system, despite all the improvements in recent years, is woefully inadequate. So talent is in real shortage. That's why you see the scarcity of talent to fill skilled jobs. At any level of skills (I am not talking just of IT here, but plumbers, fitters, draughtsmen, etc) you can command multiple jobs. Employers chase you rather than the other way around.  That is, at least, somewhat understandable.

But what about unskilled jobs - jobs that require no skill at all. Jobs like a security guard who is now ubiquitous in every building. Cleaners, maids, etc. There is a huge shortage of people even here and attrition rates are the highest in this sector (some 10-15% a month !). This foxes me.

There are some reasons for this phenomenon. The obvious one is that  jobs are in urban India while most of the labour is in rural India. While there are a lot of migrant workers, it becomes increasingly a very costly option for the worker due to one simple fact - the cost of housing is simply unaffordable. Even a place in an awful slum living in appalling conditions costs a lifetime of earnings. But another more important reason in my view is the increasing unwillingness to work hard. That's why a Railway clerk position attracts a stampede of applicants, but a field salesman's job in a private company is not so attractive.

There are really only two solutions to balance the demand supply equation. The first is education. On a massive scale. About 10 times the level at which it is today. This is a job for both government and private industry. And secondly to take jobs away from urban into rural areas. The only sector that can do this on scale is manufacturing. A huge lobby, fueled by misguided NGOs, is blocking this by resisting every land transfer from agriculture to industry.

Meanwhile, in this land of 1.2 billion people, we still can't find enough workers to man our jobs.

13 comments:

  1. semma paradoxla ithu :) we got so many people without job and so many jobs without people.

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  2. Even in rural India, it is tough to find manpower for agricultural jobs these days. The scheme (not sure of its name) that pays one Rs 120/day, no matter what work you do (here again, there is a MoU between the govt servant who pays and who receives. The one who pays gets a share as commision from each person) is driving people lazy. Afterall, When you get paid for your everyday bread without having to work, who does not want to enjoy??

    Looking at the recent TN election manifestos, I wonder if we ever have to work at all :).

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  4. Kiwibloke1/4/11

    Methinks there are two fundamental attributes in our collective psyche that result in our unwillingness to work hard. 1 quality in whatever we do (by and large output is pretty shoddy, not talking just white collar stuff, but our plumbers, sparkies, panel beaters, carpenters and masons) and 2 the famous 'jugad' focuses on getting things done, not necessarily getting the right things done. Well blame it on the English education system devised by Lord Maccaulay aimed at turning out an army of acquiescent clerks for the Raj. We continue with that even today and no wonder we still continue to be the clerks and coders for the world even today. Where is the promotion of free thinking and innovation in our education system. Sad to say I've hired professionals with 12+4 years of 'english medium' education who can't construct two sentences in simple English to save their lives! Honestly this Jugad is the most overrated quality of ours which is nothing but shortcuts and compromises. This willingness to compromise shows in our moral fiber when people elsewhere treat Indians with that suspicion of 'not fully being above board'. Sorry a long sermon but you touched upon my pet peeve!

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  5. @gils - always the problem. Which is why I believe education is the No1 priority for the country

    @RS - The NREG pays a pittance, which is anyway half eaten by the middlemen. Unlikely that anybody can exist on it. And yet, we find labour not willing to take on unskilled jobs.

    @Venkat - Yes, there is much wrong with companies exploiting labour. And yet a job is a job. How is it that we are unable to fill so many unskilled jobs when there is such unemployment in the country. I really think the urban rural problem is at the heart of it.

    @kiwi - Totally agree. Jugad must be considered as a four letter word.

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  6. I would agree with RS and kiwibloke.
    NREG may be a pittance but it defn plays a big role towards the shortage of labor in rural areas. Next comes the migration to urban areas for construction or such works.Recession not only pack the skilled workers back home but even them!
    Comin to ur golden words that people are unwilling to work hard.FYI that very well applies even to IT!

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  8. This seems to be an unsatiable dichotomy here. It is also true that we have realized this in the last decade and a lot of noise being made by NASSCOM. There are lot of programs from the IT industry running to bring the rural India to the Metro world. Industries adopt colleges and villages , give extensive training to the young blood to make them fit to be recruited into their so called posh environments. Employability programs to bridge the gap of education vs required skills have also been taken to the rural colleges. The more selfish motive here is that the talent comes at a lesser cost to them and loayalty is supposed to be higher. Some not for profit companies are running programs for entrepreneurs who essentially have to be located in Tier II or III cities.
    CII has come up with extensive vocational training programs for the uneducated people too.
    But shortage of unskilled labour also is interesting.I know an IR Manager in a big Garment Factory, who takes a van and goes into the nearby villages every day to bring in people to work on the unskilled side. And at 50% attrition as you rightly said!
    While all this is true, with 1.2 Bn walking and takling bodies in our country, it is like just scratching at the top!!
    A long way to go for "Incredible India!'
    But, so what?? We bleed blue! Keeping fingers crossed...

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  9. Sandhya Sriram3/4/11

    You know what Ramesh, Keynes can never go wrong. I think, this is currently going through a correction stage.

    we all culturally brought up in a condition where we believe that a non white collar job has to be cheap. it is not so. our own personal salaries have multipled by phenomenal proportions over the past many years. but we do not want to pay the maid or the electrician higher by any proportion.

    its gonna change. two things are going to happen in the next 5 - 10 years. all unskilled jobs are gonna get paid better sheerly because of the demand supply equation. this is good because every one need to have a share of the growth story

    the second big change is that there is gonna be a self service attitude which will sink into the psyche of our world. in a developed market, a driver + cook + maid = you are a baron. it is not so here. we are lazy to that extent that we dont want to dirty our hands. but this will change. people will find ways of doing things themselves and that will also go on to correct the demand situation.

    i think every change is a positive change and i feel that this is definitely a positive sign for economic elevation

    Ofcourse, the problem of rural unemployement and poverty still remains but that will require a different strategy and probably reserve my comments on that a more contextual post on that.

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  10. @zeno - Willingness to work hard is a whole science by itself. And the bug certainly afflicts IT folk too although you also see many people working insanely hard.

    @Hema - I can understand the problem of availability with regard to skilled people like in the IT industry. But what beats me is the difficulties faced with unskilled labour. Why is it so difficult to attract them to work.

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  11. @Sandhya - As always, a much considered comment. Its not only a question of salaries. Salaries at the bottom have gone up a lot too. Surely when you are unemployed, any employment is worth it. And ye, even at decent wages, its really tough to get unskilled workers. I can understand the self service approach happening because wages are high. What I can't fathom is that happening in India because of not enough workers available.

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  12. You came back to your fave topic after a long drought of posts on this topic. :-)

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  13. @RamMmm - I know. Become very lazy.

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