Renu Pokharna

Archive for March, 2013|Monthly archive page

Poetry to Plumbing

In Uncategorized on March 20, 2013 at 2:37 am

Spanish philosopher Maimonides ranked different kinds of charity in ascending desirability: giving money to somebody you know, giving money to somebody you don’t know when they know who gave it, and giving money anonymously to somebody you don’t know. But he believed the highest form of charity was giving somebody a job. It is important to reflect on how much of the gigantic “inclusion” spending in the last decade has given people fish rather than taught them how to fish — another classic Maimonides quip. But money is always welcome and the budget allocation was useful. More interesting than money, however, was the signalled shift in the narrative to jobs in the budget speech and Economic Survey. India transformed into a high-inflation low-growth economy because of government spending authored by the National Advisory Council — mostly individuals who have never created jobs. The new narrative suggests that jobs will be placed at the heart of policymaking and election rhetoric. Has “naukri” become a more potent electoral pitch than “garibi”?

I propose that many solutions to our education, employment and employability (3E) problems lie in praying to one god: jobs. This shift needs innovation more than money; not more cooks in the kitchen but a different recipe. The chapter in the Economic Survey on seizing the demographic dividend is a wonderful synthesis. We need to start action by tweaking five historic regulatory thought worlds.

One, labour laws, unchanged since the British wrote them, make an employment contract irreversible. We get a toxic brew when this labour market equivalent of marriage without divorce combines with the criminalisation of politics and politicisation of trade unions. Our labour laws have huge costs: high informality, poor productivity, sub-scale enterprises (more dwarfs than babies), substituting people with machines, and small low-skill manufacturing (only 12 per cent of our employment but China’s weapon in getting people off farms). About 90 per cent of our workers employed informally do not get leave, minimum wage, benefits or workplace safety. We need to make these four issues non-negotiable but make employment contracts more symmetric.

Two, the Employment Exchange Act of 1959 makes an employment exchange a physical location staffed by civil servants registering job applicants for employers who will walk in the door. But employment exchanges are failing miserably. Last year, they gave three lakh jobs to the four crore people registered. We need to repurpose them as career centres offering multiple products (assessment, counselling, apprenticeships, training and jobs), multi-mode access (phone, SMS, email and web), and make sure they are run by people who place employers at the heart of operations and are punished or rewarded by matching outcomes.

Three, ancient labour laws (1948, 1952, 1976, etc) make it mandatory for employers to deduct 49 per cent of gross salary for retirement, healthcare and insurance. But in a cost-to-company world where benefits are part of gross salary, these high mandatory salary deductions breed informal employment. Hundred per cent of net job creation since 1991 has happened informally because low-wage workers cannot live on half their salary. This is amplified by the poor value for money, bad service and monopolies in employee benefits. We can start with allowing employers to pay their provident fund to the New Pension System (NPS), and health insurance (ESI) to insurance companies.

Four, the Apprentice Act of 1961 is silly and must be replaced. It restricts trades, prescribes durations, does not unbundle theoretical and practical training, artificially caps numbers and mandates a licence for every apprentice. It is why India has only 3 lakh apprentices while Germany, Japan and China have 50 lakh, 1 crore and 1.2 crore respectively. India must recognise apprenticeships as classrooms rather than jobs that complement bookish knowledge with practical exposure. Apprenticeships have the additional upside of learning while earning (most employers are willing to pay stipends), matching (test drive, resume signalling value), relevance (employers decide curriculum) and scale (higher expansion speed limit than traditional classrooms).

Five, many of us working in skills now realise that you can’t teach somebody in six months what they should have learnt in the 12 years of school. We are not asking for the vocationalisation of school education. If anything, schools must focus on broad and strong foundations because of changes in the world of work (Class 10 is already the new Class 8 as a hiring filter). The recent Pratham report reinforces what employers feel. We are not asking for much but are not getting it and we can’t manufacture our own employees. Enrolment ratios are yesterday’s war and shifting the focus of the Right to Education Act from hardware to learning outcomes and teacher accountability is urgent.

A story about Einstein giving an exam has a student asking, “But how can the questions in this year’s exam be exactly the same as last year’s exam?” Einstein quips “Don’t worry, the answers are different this year.” This story synthesises India’s 3E dilemma; the questions in education haven’t changed since the Radhakrishnan Committee (1948), Kothari Committee (1968), National Education policy (1986) and the National Skill Policy (2009). The questions in employment have not changed since the Labour Investigation Committee (1946), National Commission on Labour (1967), Second National Commission on Labour (2002), and the Economic Survey (2013). But the answers are different because 10 lakh young people will join the labour force every month for the next 20 years. And 200 million already in the labour force need retooling.

Policy masquerading as good politics (subsidies, legislated rights, poetry without plumbing) got this government bad economics (high inflation, low growth, weak currency). But jobs represent a unique intersection. Formal sector employment changes individual self-esteem, healthcare, education and nutritional outcomes in a way that no subsidy can. An additional upside is the dua (or blessings) of the individual and her family.

A jobs narrative in politics is overdue, clever, and inspiring. Now all we need is courage and execution.

 

14 Mar 2013, Indian Express