Mint Explainer: The crisis of educated unemployed youth

livemint.com:

Mint explains how deep is the job crisis for the vast number of young people who join the labour force every year. India experienced mostly jobless growth in the first 19 years of the current century, a period when India had seen stable governments under three different prime ministers. At the national level, employment grew at an annual rate of 1.6% between 2000 and 2012 and then stagnated with a 0.01% rise till 2019, even as the economy grew at 6-7% on average during those years.

Growth in job creation picked up after the pandemic, and that can be attributed to a rise in employment in agriculture. However, that surge in agriculture jobs was due to a lack of opportunities outside the farm sector. The manufacturing sector, which can absorb a lot of skilled and educated workers, lagged in employment creation even though the output of the sector as measured by gross-value added rose.

China with its mega production lines provided millions of jobs, and when manufacturing moved to lower-cost centres such as Vietnam, those countries experienced growth in factory jobs. However, in India, employment in the manufacturing sector rose just 1.7% even as its gross value added grew 7.5% per year in 2009-19. Manufacturing sector job growth gained pace only following the reopening of the economy after a harsh lockdown enforced to contain the spread of the covid-19 pandemic.

Yet, job growth at 3% lagged the relatively muted gross value-added growth of 3.5%. Job growth in the services sector, which despite absorbing millions including the young and educated, too lagged the growth in gross value-added, according to the IHD-ILO report. But it certainly performed better than the manufacturing sector.