As elections approach, govt must remember that job seekers are also voters

The weekly urban unemployment rate was over the 8% mark for all the three weeks of September

Unemployment is on the rise. The weekly unemployment rates during September 2018 have been stabilising around an elevated level. The week ended September 2 recorded an unemployment rate of six per cent. The next week (the first full week of September) recorded an unemployment rate of 7.1 per cent. This was a little higher than the average of 6.5 per cent observed in the preceding 10 weeks. But then the unemployment rate shot up to 8.1 per cent in the week ended September 16. The week ended Sunday, September 23, saw a lower but still quite high unemployment rate of 7.7 per cent.

Although unemployment has risen in both rural and urban regions, it is the urban regions that are seeing much higher unemployment rates than rural regions. Average urban unemployment in the first three weeks of September was 8.83 per cent while it was seven per cent in rural India.

The weekly urban unemployment rate was over the eight per cent mark for all the three weeks of September. This is high by recent standards.

At this rate, it is likely that the unemployment rate in September 2018 will cross seven per cent.

The jobs situation deteriorated in August when the unemployment rate rose to 6.3 per cent, the highest in 18 months. In September, it may turn out to be the highest in two years.

The deterioration in the unemployment rate reflects an increase in labour participation and a lack of corresponding increase in the employment rate. This means that while more people are coming into the labour markets looking for jobs, the job market is unable to provide jobs to them at a similar rate.

These quantitative statistics based on a robust, large, regular and systematic sample survey is also reflected in qualitative surveys conducted by India Today. The pressure on jobs was expressed eloquently by respondents to the Mood of the Nation (MOTN) survey conducted by the magazine in July 2018.

 

Twenty nine per cent of the respondents to the MOTN survey listed jobs as the government’s biggest failure. Behind this overall average is a very skewed regional distribution. Forty one per cent of the respondents in north India feel that the single biggest failure of the government is on the jobs front while only 15 per cent in the south feel that jobs is the single biggest failure of the government. In east and west, the proportion is 33 and 32 per cent, respectively. If the respondents identify the “government” as the Modi government then this survey shows a very grim picture to the central government in an election year.

MOTN is a periodical survey and it therefore can show a trend. And, the trend regarding jobs is of deteriorating perceptions.

According to the MOTN survey, perceptions regarding the government’s ability to create jobs have been deteriorating sharply. About two years ago in August 2016, 35 per cent of the respondents believed that the jobs situation had worsened during the Modi government era. A year ago, this proportion rose sharply to 53 per cent. And, in July 2018, it rose further to 60 per cent.

The results of the Mood of the Nation survey by India Today are in sync with Mint’s Millennial Survey which showed that 70 per cent of the post-millennials and 65 per cent of younger millennials find it extremely difficult or fairly difficult to find a job now.

Unlike CMIE’s CPHS which merely measures employment/unemployment rates, the MOTN attributes the jobs situation to a cause. This makes it a lot more interesting. Its questions attribute the deteriorating jobs situation to the government. Implicit in that attribution is the assumption that ultimately, it is the government that is responsible for providing jobs to all. It does not have to provide government jobs to all but, it is effectively responsible for creating an environment that is conducive to investments and adequate job creation.

It would be logical to assume that the government’s failure to create or facilitate the creation of jobs — as seen in CMIE’s CPHS measurements and the perception of this failure amongst voters — as seen in the MOTN and Mint surveys, will have repercussions in electoral results. Recent electoral surveys do suggest that the Modi government has a tough battle in the coming Lok Sabha elections. Job seekers (whether employed or unemployed today) are also voters.

The jobs problem cannot be solved before the summer of 2019 when elections are due. But, the problem will be much bigger and a lot more menacing for the next government.

The author is managing director and CEO, Centre for Monitoring Indian Economy P Ltd