India: Rosy unemployment data belies grim reality

Staff work behind the counter of India's first newly-inaugurated Starbucks outlet in Mumbai on October 19, 2012. Starbucks, the world's biggest coffee chain, launched its first Indian outlet on October 19 in an upscale part of Mumbai, becoming the latest global firm to tap the urban youth's growing taste for caffeine.

India's rosy unemployment figures -- which show that only a measly 6.6 percent of Indian workers are out of a job -- belies the grim reality of the job market here, suggests a statistics-rich article in the Times of India.

This is a country where 20,000 people show up to apply when the state police announces it will hire 2,000 new beat cops, where the jobless can be seen loitering on corners at every hour of the day on every street in every city, and where young men are known to turn to performance boosting drugs... to make it into THE ARMY. 

What explains the contradiction? Having a job doesn't mean much, if the job doesn't employ you for the whole day or the whole year or it doesn't pay you enough to survive.

According to stats quoted by TOI, nearly 30 million Indians are unemployed, 26 million are officially underemployed, 40 million want additional work and 35 million are looking for a better job -- and most folks consider those figures to be gross understatements.

Here's why:

Being employed alone doesn't guarantee an escape from poverty, mostly because so few of the "jobs" are in the formal sector, where workers are guaranteed the legal minimum wage. As TOI puts it,

When compared with other Brics countries, it's clear where India lags. Among these five emerging economies, China is the only one where industry has a larger GDP share than services. Yet, services employ one-third of the Chinese workforce. In Brazil, services constitute 65% of GDP and give jobs to 61% of the workforce. The corresponding figures for Russia are 58% of GDP and 62% of the workforce. Similarly , in South Africa employment generation in services is higher than income from the sector. Services constitute 63% of South African GDP while the sector employs 70% of the country's workforce.

Lack of skills in India also forces workers to remain trapped in the unorganized sector, doing menial and semi-skilled work. About 93% of India's workforce is in the informal sector. The majority of these people work in pitiable conditions, lacking basic labour standards like a written job contract, paid leave, social security and access to trade unions.