The future of India@work promises to be challenging, exciting and rewarding. But the steps that we take today will go a long way in ensuring that we reinvent ourselves and be future-ready!
By Rajiv Dhabadkar
Within the past 3 decades, globalization has increasingly interconnected the world, and has manifested with an increase in people interaction around the world involving sharing of ideas, cultures, goods, services and investment.
Today, as we transit through the wave of being socially interconnected, we are confronted with fear about losing our jobs and our income, as industrialized countries are compelled to reduce wages to be competitive with those in the developing world. To some there is a fear about the loss of culture – from being overwhelmed by a foreign culture to that of culture being replaced by people belonging to a different faith. Collectively too, there is a fear over the loss of national sovereignty as nations become part of supranational entitles, like the European Union or the International Monetary Fund.
However, if history has shown us anything, it is that globalization has corresponded to higher national incomes and increased opportunities.
Can these conflicting views be reconciled?
Globalization induced labor displacement is a consistent phenomenon that drives labour sinks and labour redundancies occurring simultaneously over the globe – thus putting pressure on organisations globally to innovate in order to move up the value chain.
In context of the fast accelerating people movement across borders, jobs displacement or “Ordinary and customary turnover of labour” is therefore, very much a part of the sweeping changes of globalization. A situation where it has become customary for employees’ services to be dispensed with because in the view of the management they are in some way less than satisfactory employees.
So, while advanced economies align their trade and immigration policies advocating ‘citizens first’, what does the future of work look like for the Indian Labour force?
On January 24th, 2018,the International Labour Organisation (ILO) released a report that confirms every economist’s nightmare. It clearly states that India’s economy will suffer in 2019, and as much as 77% of workers in India will continue to be in vulnerable employment. Vulnerable employment is when workers are vulnerable to be in poor working conditions, receive inadequate pay and work under difficult working conditions that undermine a worker’s rights.
When compared with other countries in South Asia, the vulnerable employment level of India will continue to be higher. Out of an estimated 535 million Indian labour workforce in 2019, 398.6 million will have poor quality jobs. The official unemployment rate for freshers, those under 24 age group has been pegged at 10.7% in 2019.
In 2017, almost a quarter (23.4%) of India’s working population lived in extreme to moderate poverty. The report also says that India alone will account for almost 10% of the world’s unemployed by 2019.
The figures of unemployed people in India has been steadily increasing, from 18.3 million unemployed in 2017, to 18.6 million in 2018 and is expected to be 18.9 million in 2019. Actual numbers may potentially overshoot the estimates, as it has happened before. In 2017, the number of unemployed people in India was 0.5 million more than what the ILO had estimated
Frictional employment at home
Furthermore, as workers will lose jobs to automation, time taken to reskill and rehire will further depress wages. This frictional employment (of those in between jobs) will further add to the unemployment figures.
However, the scenario is not all that gloomy if we consider India’s domestic workforce to be included as part of the global labour pool. Considering our government’s relentless efforts to make ‘Passport-at-your-doorstep’, via the Post Office Seva Kendra’s (PoPSK) a reality, is convincing proof for India’s future@work.
Let’s take a look at a few global job trends forecast, according to the McKinsey Report published in December 6,2017 –
– Job displacement due to ageing population in advanced economies will create more than 130 million jobs in healthcare. Wage polarization of middle income wages will continue to increase, but due to the demand for STEM workers, income for those highly skilled foreign workers will increase as well.
– High income wages requiring short or medium term employment will be in demand. Forcing host nations to delink permanent residency and bring merit based immigration policies. Compelling a circular migration of foreign talent from labour supplier nations.
– Globally, 250 million new jobs will be created as a result of rising incomes related to automation putting added pressure to look for STEM talent from overseas.
– By 2030, India will have about 138 million more workers, with a 34 percentage growth in the Informal sector requiring production workers, but will only create 6 million technology jobs.
– By 2030, about 93 million Indian skilled workers will be displaced and will look for new occupations – in jobs which do not even exist today. The demand to fill short or medium term skilled jobs overseas is therefore inevitable.
– With just 6 percent over age 65 today, and 8 percent predicted by 2030, India will be the largest STEM supplier to the world.
Changing Immigration Policies Globally –
Increased bilateral trade between countries continues to create opportunities for movement of labour. Changes to the immigration policies of host nations dependant on foreign talent is already metamorphic. The massive and still accelerating cross-border movement of people across the globe might be the most portentous development of our times. As the global labour markets get tightly integreated, temporary work visas will continue to being used to fill temporary labor gaps.
With the declining Indian IT labour arbitrage model fading, creation of long term employment for its workers is no longer a sustainable model. Furthermore, frictional employment figures due to layoffs are expected to increase as technology continues to disrupt business transactions.
However, the experienced skilled workers, those in their early 30s will reach economic saturation and continue looking to fill STEM jobs abroad.
Rise in gig economy in advanced economies –
Vulnerable employment has now paved it’s way into the gig economy. Replacing full-time employees with freelancers and independent contractors is the new mantra.
In developing countries, such as India, we take pride referring to a gig economy simply because now even the advanced economies have finally caught up with us. But, doing gigs is what almost 77 percent of Indian workers have been doing all along, for many years. It is also what about a third of Brazilians and Chinese workers are still doing. While the West refers to it as “pay check-to-pay check”, we used to call it hand-to-mouth work, and to most, we still do.
Vulnerable employment is deeply tied to economic inequality and is therefore responsible to control mobility of its workers and the economy. In advanced economies, doing a “gig work” is largely due to the exclusion from working in the formal sector. This exclusion may lock-in workers into gigging for a lifetime and is perhaps a result of discrimination.
While freelance work does bring about a certain flexibility, it comes at a steep cost; besides low pay, there are no paid holidays, no sick leave, no pension, no safety net of any sort. This type of labor market may work best when young, but it does not foster a secure base for family building. It however, may not be a socially sustainable employment in the long run.
In conclusion, in the benefit of advanced countries, ratifying the United Nations Mode 4, aimed to protect the labour rights of migrant workers by labour laws of the host countries, is still a viable option to restore the economic inequality, and not including migrant workers in TISA (Trade in Services agreement) is therefore at the root of the debate on people movement globally.
The future of India@work promises to be challenging, exciting and rewarding. But the steps that we take today will go a long way in ensuring that we reinvent ourselves and be future-ready!
