About 27,513,718 people will potentially join the workforce in 2022, a far cry from the projected 5 million – 8 million annual job growth.
Economists associated with the government are arguing that there is no more unemployment than sufficient employment is created. Furthermore, they argue that the employment generated annually is not very high. Bibek Debroy, chairman of the Prime Minister’s Economic Advisory Council, wrote in an article in The Indian Express that analysts are ignoring the decline in the population growth rate from 1.5% earlier to (presumably) 0.8%. He asks, “…how many jobs does India need to create every year.” He says, “When one encounters figures like 10 million or 12 million, one often does not realize that these are dated figures… circa 2003-04”. He suggests, “An approximate range might be 5 [million]-8 million.”
Labour Force
His statements reflect the thinking of the government and they need to be analyzed. First, how is the current population growth rate relevant to the current increase in the labor force? The labor force includes people aged 15–64 (International Labor Organization definition) who are looking for work. Current population growth will affect the labor force 15 years from now when people born this year will likely join the labor force. So, even if Mr Debroy discounts roughly 2003-04, children born then are precisely those who are entering the labor force from 2018-19 onwards after attaining a high school degree. Intermediate degree holders could join in 2020-21. And so on.
Also, even after getting a degree, people may not join the labor force as they may have to prepare for various exams. But eventually, they all will. Children of low income group cannot remain unemployed for long. Middle class children also have to start working as they face increasing social pressure. Very few youths become entrepreneurs. This is because very few people have the capital and skills required for this.
Second, it is the birth rate and not the rate of population growth that is relevant. Population growth is equal to births minus deaths. Life expectancy in India is more than 70 years. The mortality rate in children is also high. Therefore, we can subtract the deaths of children under five from the number of births in a given year. Assume that a negligible number will die at age 5-50. So, for the number of people entering the labor force, the death rate isn’t really that important.
Applying the birth rate of a given year to the population gives the number of births in that year. Subtract the deaths of children under the age of five from that. This increases the potential number of youth who may join the labor force after 15 years (at age 15). So, in 2000, the increase was 28,061,890, in 2002 the figure was 27,990,015, in 2005 it was 27,783,231, in 2007 it was 27,456,018, and in 2022 the increase was 24,167,206. (Table 1),
Table 1 | India’s historical birth rate, death rate, and potential labor force (2000–2022)
Comments: Column 2 Based on estimates for intervening years. column 4 Based on the projection from 2000 to 2022. column 7 Based on the data given in Table 2 below
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Why are these years selectively chosen? They indicate that the potential youth population is growing at a rate of between 24 million and 28 million over the period 2000 to 2022. Moreover, these years are relevant as it is in the years when children in 2022 would have attained high school, intermediate, under- Bachelor’s and Master’s degrees and possibly looking for work. They potentially enter the labor force. Education data tells us what percentage of the relevant age group enroll for each of these degrees. Therefore, those who are not enrolling will likely join the labor force. calculated as (Table 2)The number of people likely to join the labor force in 2022 will be 17,928,780 of those born in 2007; 2,583,841 since 2005; 5,598,003 since 2002; and 1,403,095 since 2000. The total is 27,513,718.
Fewer women are likely to join the labor force for social reasons, so the above numbers have to be separated between women and men. In 2022, there were 1,068 males for every 1,000 females. This means that 48.35% of the total number will be females (13,304,506). Let us assume that 25% of them will not be able to work due to social reasons. This would create 24,187,591 potential youth who could enter the labor force in 2022. Some of them will prepare for the exam. But those from earlier years who have already spent years preparing for the exams will join the labor force. In fact, if enough work was available, most of them would not appear for many of these exams again and again. Some young people will go abroad for work and/or studies, but their numbers are small compared to the total. Many of them might not even go abroad if work was available.
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unorganized sector
The organized sector is mechanized and automated and creates very few jobs. This is the reason why 94% of the labor force is in the unorganized sector, which largely works for low wages. 28 crore registered on the e-Shram portal in November 2022 and 94% reported earning less than Rs. 10,000 per month. Unemployment rises as a result of the growth of the organized sector at the expense of the unorganized sector. Unemployment is described as unemployment; underemployment; disguised unemployment; And those who have stopped looking for work. Simplified assumptions put the number of people in need of decent work at 286 million – all of them in the unorganized sector. Only 332 million have proper work and most of them work in the unorganized sector. This data makes it clear that even if policy makers talk about creating jobs for 5 million-8 million youth, it will not make any difference to India’s unemployment problem.
Source: Report of the ‘People’s Commission on Employment and Unemployment’, set up by Desh Bachao Abhiyan and launched on October 11, 2022. Arun Kumar, retired professor of economics, JNU, was the chairman. India Birth Rate 1950 – 2022 Can Be Reached macrotrends On 25 October 2022.
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