Economic Growth and Employment
Context:
- Instead of a growth issue, the Indian economy faces one of income. Many people’s incomes are not increasing at a rate that is sustainable or enough. Despite the positive GDP growth generally, there is growing demand to reserve jobs for all “economically weaker” groups, irrespective of caste or religion.
Employment and growth:
- Both pro- and anti-government economists argue over whether the economy is producing enough jobs and cast doubt on the accuracy of official statistics. Opponents of the administration also want to demonstrate that the current government’s actions, not those of the previous one, are to blame for the issue of joblessness and economic growth.
Employment that isn’t “good”:
- Economists believe that the main issue with incomes in India is that not enough people have shifted from agriculture to manufacturing. All nations have historically seen sustainable growth along these lines, including the United States a century ago and China more recently.
- In the 1990s, with the emergence of exportable information technology services, India’s policymakers believed they had discovered a direct shortcut from agriculture to services.
- However, there isn’t much space in upscale services for all the young Indians who require work. Furthermore, the educational requirements for these positions are higher than what people in rural areas have. As a result, after they leave agriculture, they require employment that utilises their current skills and places them on a career ladder. They require employment that will allow them to advance their careers and pay.
- They get the first step from labor-intensive manufacturing, services, and construction. These jobs were taken on by the millions of Indians who left agriculture over the past three decades.
- The issue is that, regardless of the industry, the employment they have are not “good” jobs since they don’t pay enough, are temporary or have short contracts, don’t offer social security, or help with skill development.
- Even in big, contemporary industrial companies, employees are hired through contractors to give employers “flexibility” and cut expenses. Regular employees receive far higher pay than contract workers. Their jobs are unstable, and they receive no support in advancing their education.
The world at a crossroads:
- To build a future that is both socially and environmentally harmonious, new economic theories are needed. It is necessary to develop new conceptions of work, new enterprise designs where the labour is performed, and new analyses of the social and economic ties amongst those involved in these enterprises. Small businesses will once again be lovely thanks to the push for green, organic, and “local” products that lower carbon emissions and enhance environmental protection.
- The sustainability of businesses will be determined by “economies of scope” as opposed to “economies of scale.” Rather than developing vast, global supply chains that link producers in remote areas of the world with consumers in other parts of the world, denser, local economic webs will emerge.
The financial benefit of providing care:
- Instead of focusing on starting businesses to generate the kind of surpluses and economic efficiencies that corporate businesses are supposed to, the focus will go to actually starting “social” businesses.
- Caretakers and the care they provide need to be appreciated more than economists now do. Under the current paradigm of economic growth, women who have historically been carers are taken out of families, which are by nature social enterprises, to work in factories, offices, and retail establishments that are meant to generate financial profit.
- Economists solely consider the financial contributions made by women working in formal industries when calculating women’s labour force participation. Whether they work as domestic helpers in other people’s houses or on family farms, they don’t seem to regard the “informal” labour they perform outside of their homes in order to make money.
- Families are social organisations, and the dominant paradigm in economic theory is to restructure them to fit the needs of businesses, which are formal economic organisations. Thus, while the GDP—a measure of economic growth—decreases, so does the amount of care that people can and ought to provide one another.
Employment and economic growth metrics:
- It can no longer be bogged down in ideas of economic expansion from the 20th century. They need to be changed to better represent the kinds of jobs and businesses we want to see more of in the future. In order to bring about this paradigm shift, the policymaking process needs to start with listening to the groups that the current economic paradigm has not placed much weight on: workers, women, smallholder farmers, and small enterprises. These days, the dominant players in the current paradigm—big financial institutions, corporate giants, and economic experts—override their opinions.
Way Forward:
- Policymakers should take note of this lesson: “Listen to the people and what matters to them; don’t rely on historical statistics to guide good policy for the future.”
