Friday, July 04, 2014

Improving the economy may increase unemployment.

The proportion of people working or looking for work rose from 45% in 2001 to 50% of the population in 2011. Of these 62% were men and 35% were women. Overall unemployment jumped sharply from 6.8% in 2001 to 9.6% in 2011, the rate being 9% in men and 10% in women. We do not know whether these figures account for the severely distorted gender ratios in various parts of the country with men outnumbering women because of sex selective abortions. Also millions of women drop out of the job market to look after children, because they dropped out of school and so do not have the requisite skills or because the quality of jobs is not suitable. Among 15-24 year old 470 million were unemployed or seeking jobs in 2011 of which 260 million were men and 210 were women. Among 15-59 year old unemployment rose from 11% in 2001 to 14.8% in 2011. Apparently 160 million women are restricted to domestic duties which is seen as an indictment of men for not helping out. But men cannot help out. Good jobs need education which has been destroyed by the Right to Education Act as the Congress stopped all examinations in schools which meant that teachers had no need to teach the children. Most jobs were created in construction as soaring property prices led to indiscriminate construction of often substandard residential and commercial buildings. This is hard labor. Why work when the Congress was dishing out money for 100 days a year for doing nothing under the MGNREGA scheme? China started its one-child policy in 1979. This prevented 400 million excess children, improved the health of women, reduced pressure on agricultural land, reduced epidemics, improved education and added vast numbers of women to the labor force, reducing labor costs and making China the factory of the world. India cannot enforce such a policy but we must link all benefits to having no children. As soon as the poor see economic benefits they will immediately reduce birth rates. Pundits are unanimous in stating that the economy needs to create jobs, jobs must be of good quality and Total Factor Productivity must improve. Yeah, sure. But how? Improving productivity means that fewer people are used to perform the same work. This can be done by switching to modern technology but that will increase unemployment. Road works are still done by using shovels and if a tree is uprooted by the wind a gang comes with axes to chop it into pieces instead of using a chain saw. This wastes time, the work is shoddy and the road remains blocked, affecting transport. Vast numbers increase waste, increase theft and result in losses. As in Air India and Indian Railways. If poverty is made lucrative it will only increase. Problem.

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