Empirical knowledge needed for job creation

Live Mint, October 29, 2018

By Pradeep S Mehta

We need to get down to the ground, at an enterprise level, to assess what works and why, and what it is that make enterprises value human resources.

Every government faces challenges and there are some more prominent than others. Job creation is perhaps the most prominent of them all. In the face of declining agriculture opportunities, tough industrial competition, rising protectionism and reshoring, the inevitable realities of artificial intelligence, digitalization and automation will keep the productivity clock ticking. The trade-off is that some of these technologies will replace some mental tasks, some physical ones and some that are both. So we are in a way on the cusp of decision-making about providing meaningful and sustainable jobs to millions of India’s youth over the next many years.

The pressure is enormous, but even in a relatively benign environment, India registered a sustained period of jobless growth. There is enough evidence now to show that starting from the reform years in the 1990s down until now, decades of jobless growth has become a norm.

Anurag Behar of Azim Premji University writes in his candid foreword to the recently released State of Working India report that industries have for years minimized the labour component, not so much because of draconian labour laws or shortage of trained labour, but simply because of the better quality, productivity, and safety of automated systems.

So, how is one to ensure growth with jobs when the complexities have increased manifold? To answer broadly, one would need to spur the growth of means of generating income with labour, and then ensure that other social benefits also accrue to the worker. Ideally, such vocational avenues should also allow workers to learn and earn more. The combination of these aspects will ensure continuous and higher human capability which can be harnessed for higher productivity.

The hard part is how to get this done for millions of people with low and medium skills who form the ‘majority’ of job hunters.

A job that does not provide adequate spending power is mostly meaningless for only a pittance gets recycled back into the economy. Such jobs also put limits on the development of human capability as workers are in continuous ‘survival’ mode. With so many other leakages in the system, what is needed is a much faster and a more robust framework.

Digitalization answers that question but only in part. Think of it through an example of taxi aggregators. In the initial days, they promised high incomes but in less than a decade’s time, they have become labour-exploitative. Then there are other models facilitated by technology that allow ‘gig’ work to flourish. In other words, the person can be a cab driver for a few hours, a delivery boy for a few others, a security guard by the night and run a tea stall in the morning if he still has time and energy. The worker’s spouse may too earn additional income.

Put together, they result in higher incomes but only cumulatively. In other words, staggered ‘productivity’ may result in somewhat commensurate income, but that leaves no time to the worker for his good. Therefore, despite higher incomes, they still can’t be called ‘good’ jobs i.e. jobs which imply higher and rising productivity and entail necessary support, safety, security and incentives for the workers to grow and perform better.

However, there can be a contrarian view too. For instance, a combination of similar or some other jobs may even result in acquiring new skills and honing existing ones, thereby adding to individual capabilities which can be ploughed back for higher productivity.

The debate on these issues will continue for as long as there will be new disruptions. But one thing is clear that given the telling effect of new tech, the traditional approach of worker welfare i.e. where enterprise remunerates and the state partakes in fuller development of human capabilities through regulation of social benefits, may not be the only criteria to judge if we are indeed headed the right way.

It is, however, clear that not just jobs but ‘good’ jobs will be needed for a healthy economy. This effectively means dignified work leading to higher incomes and better family welfare. Low and medium skilled manufacturing may hold one part of the answer while services may hold the other. The key may be in clustering many small enterprises and ensuring that we have the right policies for cluster development and concomitant facilities.

For services, clustering may need a different form. Rather than clustering enterprises, this may be physically far more dispersed. Could clustering of ‘jobs’ per worker be an option, with social benefits built upon the cumulative incomes arising from different avenues?

These ideas are rudimentary, but a different approach is likely needed to work along with the traditional ones in almost all areas including social security, access to credit, taxation and lifelong learning systems, to name a few.

As a first step, we need to get down to the ground, at an enterprise level, to assess what works and why, and what it is that make enterprises value human resources. If we have a fuller understanding of that, we may have some answers too, which can be best implemented with a whole-of-government approach.

Abhishek Kumar, director of CUTS contributed to this article.

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