Saturday, 1 July 2017

Voluntary unemployment rising in India

Unemployment occurs when a person is willing and able to work and is actively seeking for a job but still doesn’t have one. Voluntary unemployment is a situation when a person is unemployed not due to unavailability of jobs in the economy, but because of not being able to find employment of his/her own choice. People reject employment opportunities if they do not receive desired wages or if they are not offered the kind of work they wish to do i.e. unemployed of their own will. 
  • Latest annual household survey by Labour Bureau, the unemployment rate has reached 5%,  is the highest in the last 5 years.
  • Lack of sufficient job creation could lead to resentment due to people’s high aspirations. Manufacturing alone won’t create many direct jobs.
  • There is dramatic rise in voluntary unemployment across the country, where people choose not to work below a certain income level after ‘investing’ in education.
  • Nothing has changed substantially in the last one year on the jobs front.
  • We need to create 10 million to 12 million new jobs every year. If you believe the Labour Bureau, which are not believable, is about 1 million.
  • The current official data on labour and employment indicates ‘jobless growth’ as well as ‘growth-less jobs’. 
  • It fails to capture the pre-dominantly informal and unorganized nature of the Indian economy.
  • The only credible way to get data on employment and jobs is using household surveys over and above enterprise-level surveys. Otherwise, we will always have an imperfect picture.
  • Involuntary unemployment hasn’t gone up, but voluntary unemployment has gone up dramatically. When incomes goes up, women voluntarily opts out. People are unwilling to settle for jobs, particularly after having ‘invested’ in education, that do not give them a salary above this level.
  • As the India gets richer and more educated, many Indians are choosing to stay away from the job market, further exacerbating unemployment numbers. 
  • Voluntary unemployment could become a bigger headache for India in the coming years.
  • Government first needs to put in place a system for timely and reliable job data.
My View:
The stagnant growth of IT industry, which employs over 3 million people, resulted in growth less jobs and now is shrinking due to automation and US Visa restrictions. The backward impact on private engineering colleges with large numbers unfilled seats and some are wound up. Voluntary unemployment is not only a resource wasted but also could result in youth resorting to crime to fulfill the necessities.

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