Rich world scramble for workers, as India plunges into unemployment

The culprit is not a global rise in oil prices that could push crude to $90 a barrel by the end of this year, but rather a severe shortage of drivers for so-called heavy goods vehicles that deliver petrol to fill pumps and Also supply to supermarket. Britain has long lacked workers that were allowed by the free movement of workers across Europe when it was a member of the European Union. Before the Brexit referendum in June 2016, opponents warned that there would be such a labor shortage if Britain left the European Union. Now, the country faces the prospect of empty shelves at grocery stores in the coming months. The UK has promised 5,000 temporary visas for such truck drivers from Europe and an additional 5,500 visas for poultry workers. Prime Minister Johnson, a Churchill biographer and admirer, may have another major crisis in which to display Churchillian resolve.

Across the Atlantic, American restaurants, hotels and hospitals are facing severe labor shortages and dramatically increasing wages. The challenge there is that the US government’s generous unemployment insurance to offset layoffs during the pandemic last year could almost too well succeed. In a report in The Daily Podcast last month, a restaurant owner in Houston said, “Before that, I would post the position and I would easily get 100 applicants. Now, I post positions, and I can only get one or two applicants.”

Stock markets tumbled on Tuesday partly on fears that the US might face a stalemate, a word from the 1970s that has come back to haunt us in India and abroad. These extreme labor shortages in the two advanced economies are part of the explanation. Supply-chain shortfalls and huge jumps in oil and gas prices for everything from semiconductor chips to shipping containers are clearly making more headlines, but the developed world is also facing an alarming shortage of workers. Inflation in the US is currently around 5%, a significant step up from 2.3% in 2019, let alone the less than 1% recorded in 2014 and 2015. In the UK, it rose to 3.2% year-on-year in August. Critics of the US Federal Reserve say the central bank should have been more cautious. The former US Treasury Secretary, Larry Summers, warned on May 28, after President Joe Biden announced a $6 trillion budget, “the Fed has had almost no success in slowing down inflation.” at a six-month low.

At least US policymakers have been in the midst of an ambitious effort to “warm up the economy”, seeking to raise wages for people in low-wage service industries, such as flipping burgers or making beds in hotels. for, as well as boosting the economy and providing income to the millions laid off during the darkest months of the pandemic last year. The increase in exports from Asia to the Americas shows that the former’s huge stimulus last year boosted global trade (and India’s record exports).

The contrast with India, where income support through fiscal outlay from the government has been relatively modest, could not be more evident. In July last year, India’s chief economic adviser, KV Subramaniam, said once a vaccine is available, stimulus action would be the right time. It seemed a reasonable argument then, but a year later, even as the economy is showing signs of recovery, India’s employment data looks alarming. The recent release of the government’s Periodic Labor Survey shows that the proportion of salaried jobs in urban India fell from 53% between April and June of last year, when the national lockdown was imposed in October-December 2020, to 48.7%.

Job growth in India is mostly due to unpaid family labor on farms and low-remuneration employment in service roles ranging from private security to package delivery. As Mahesh Vyas of the Center for Monitoring Indian Economy said in Business Standard, “Factories seem to have lost nearly 10 million jobs permanently in the pandemic-caused lockdown. “He believes that the level of 40 million that the manufacturing sector once claimed” is almost out of reach.

Evidence of surplus labor is together everywhere. The pandemic has made this event something that even Marie Antoinette may not have witnessed. My friends use delivery couriers to send a big piece of cake all over town. I have sent appams and stews to the other end of Bangalore to please friends. ATMs have security guards in an unseen way to the west. Similarly, fitness is also facilitated by India’s surplus labour. There are reportedly around 20 ball boys on the tennis courts of Delhi Gymkhana. CMIE reports that personal trainers are a boom category – such as HouseHelp. In 2010, I was a reporter inside and outside factories in southern China when it reached the Lewis turning point (named after Nobel Prize-winning economist Arthur Lewis), allowing a country’s surplus rural labor to be entirely absorbed in manufacturing and services. Done. China then saw a double-digit annual increase in wages in factories. India has now reached a different and more worrying destination altogether.

Rahul Jacob is a Mint columnist and a former foreign correspondent for the Financial Times.