Unemployment cannot cause agitations

The best part of Shekhar Gupta's columns is the rich experience they reflect of his journalistic journey. To those who lived through the Emergency and through Gulzar's Mere Apne, his "Back to the inglorious past" (Business Standard, December 28) will connect vividly. To the rest, it is the best sketch of those times in under thousand words. 

Mere Apne highlighted joblessness in the late 1960s and early 1970s. And, as Shekhar describes, this was followed with a period of heightened nationalism and eventually the Emergency. Today's joblessness is also followed by heightened nationalism. But his hypothesis, that once people have suffered joblessness and economic stall for a length of time, nationalism will no longer calm their anger, remains to be tested.

I may venture to wager that the link between unemployment and political agitations is not causal but is catalytical, at best. People do not get sufficiently angry to agitate because of prolonged joblessness or economic stall. Not in India. 

It is true that we do face high joblessness today. The unemployment rate is of the order of 8 per cent according to CMIE's Consumer Pyramids Household Survey. According to official statistics, at 6.1 per cent in 2017-18, it was at a 45 year high.

The agitation in campuses and across towns in India is not an agitation against this unemployment. It is an agitation against the CAA, NRC, NPR and against high-handedness of the government in many places. It is not a demand for jobs.

A high rate of unemployment in educated youth can be a catalyst in the germination of these movements in campuses and can be used to accelerate any political process. Campuses provide the critical mass of an aggrieved population necessary for a political movement. But, the connection between a large stock of unemployed and a particular political movement is tenuous, at least in India. Disillusioned youth can be rallied against CAA/NRC just as much as they can be for CAA/NRC. In fact, the deployment of youth for NRC is easier since it carries a potential reward that reduces the competition for scarce jobs by eliminating a few migrants from the competition. It is therefore facile to assume unidirectionally that the high stock of unemployed youth will help movements against the political dispensation of the day.

The BJP is a better organised party than any other in India and therefore, it is more likely to be successful in mobilising the stock of unemployed than others. 

Independent of the particular case of CAA/NRC, it is difficult to appreciate that an unemployment rate of 6 per cent or even 8 or 10 per cent is a politically potent problem. Unemployment among graduates is much higher at 17 per cent. But, even if such unemployment generates anger, it is not enough to be a serious political problem. Here's why.

Unemployment hurts few. A ten per cent unemployment means that ten per cent of the people who are actively looking for jobs are unable to find one. This means that 90 per cent of the people who were looking for jobs did find one. And, most of the ten per cent who are still unemployed remain hopeful that like the rest, they too will eventually find jobs. So, the number of people really agitated for not having found a job are really too few to make a political difference.

Since unemployment hurts very few it is not considered to be a societal problem, or the government's problem, but a shortcoming of the individuals who are left unemployed. The unemployed is ridiculed for his or her lack of effort or ability. In India, unemployment is not recognised as a macro-economic problem. 

Unemployment is tolerated. We have seen that when jobs are lost, people do not agitate on the streets. They simply stop looking for jobs and leave the labour force. Quietly. They do not seek a change in the political dispensation. The twin shocks of demonetisation and GST was followed by a 10 million fall in jobs in 2018. There were no agitations. The unemployment rate has been rising steadily since then. Yet, in 2019, the same political dispensation was rewarded with a bigger mandate. 

There have been agitations for reservations in government jobs. But, there are no agitations for good jobs in general. There are no agitations against the rise of contractual labour which compromises job security for those who have jobs.

There are two possible reasons for the lack of agitations against unemployment. First, the number of households with no adult person employed has not increased even as unemployment has increased. And secondly, unilateral government (centre and state) transfers to households have increased. This has cushioned the impact of unemployment on household.

The pain of unemployment is too local unlike the pain of inflation which has universal impact. When inflation rises, everyone is hurt. The pain is felt more by some compared to others but, everyone pays the price of high inflation. Inflation is therefore politically a lot more potent than unemployment.

Further, governments are seen capable of handling inflation -- they can bring in price controls, change trade policy, control stocks with traders and crack down on "hoarders", etc. An agitation against inflation can be effective. And a government that fails to control inflation can be punished. But, this is not the case with unemployment. Political parties may promise jobs but the electorate knows that those are empty promises across the political spectrum. If an incumbent government cannot provide jobs, others cannot either.

Slowing growth and joblessness can impoverish us. They can be a catalysts for change but they are not sufficiently potent to morph into political agitations.

The author is managing director & CEO, CMIE