Creating jobs is a major challenge facing countries like India where the majority of the population falls under the working age. Why new jobs are scarce and how to create more of them, however, are questions that usually invite unsatisfactory answers. Still, senior journalist Raghavan Jagannathan in his new book, The Jobs Crisis in India , seeks to offer the lay-reader a wide survey of the extent of the problem in India, the reasons behind it, and the way forward.
The problem of job creation, Jagannathan argues, is not something unique to India; which is true. The world as a whole, he states, is flush with a lot of excess capital and labour.
The owners of such excess capital, however, are not willing to invest their money to create jobs for the masses. Even when they do invest their money, the author says, the jobs that are created by today’s capitalists are simply gigs that do not offer any kind of job security to workers. This argument wrongly assumes that there is a certain amount of capital investment that is necessary for maximum job creation and anything less would lead to unemployment. The truth of the matter is that if wages can adjust according to demand for labour, any amount of capital should be enough to employ any amount of labour. In other words, there may no such thing as an ideal amount of investment to create jobs.
The jobs problem, the book further argues, is compounded in India by archaic labour laws which prevent companies from hiring labour without any frills. Such laws force companies to invest in building technology that replaces the need for human labour in order to bypass these outdated laws.
There is very little to disagree with this assessment. It is common knowledge that India’s labour laws often force workers to seek alternative employment with lower wages. But to overcome the jobs problem the book recommends more than just the scrapping of bad laws. It wants investment in labour-intensive sectors and lists out a bunch of sectors “that have high employment potential per unit of investment”.
This is yet another instance of the author’s presumption that investment simply translates to jobs and that policymakers can somehow know what kind of investment creates the most jobs. The book further wishes for the government to facilitate job creation by skilling workers for jobs that are in demand; as if this would not happen otherwise, as it does already, through markets.
The Jobs Crisis in India ; Raghavan Jagannathan, Macmillan India, ₹599.
