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Automation threat

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  28 March 2017 12:00 AM GMT

By the Central government’s own admission in Parliament last month, the unemployment rate in the country has risen steadily in the last few years. Labour Bureau data put this figure formally at 5%, as per its survey conducted in April-December 2015. This seems expected, though it is a fact that the unemployment rate has risen from 3.8% in 2011. After the recent round of state elections and with the rendra Modi government seeking to put itself in pole position for 2019, it would be wise to examine the economic ratiole of government decisions. India produces the least number of jobs per unit of growth, as former Planning Commission member Arun Maira has pointed out. This trend of jobless growth has already begun to trigger social unrest, like the Jats in Harya again going into agitation mode for OBC status. In a study by IndiaSpend quoting latest available figures as per Fourth Annual Employment & Unemployment report (2013-14), it has been shown that only around 16.5% workers in the country earn regular wage/salary, that as many as 78% households had not a single member earning such regular income. In the total workforce, as much as 30.9% are casual workers. In ten years from 1999 to 2010, the share of contract workers in total organised employment rose from 10.5 to 25.6%. While the Central government is pushing for labour reforms, what is actually happening is most of the country’s workforce has neither social security nor employment benefits, while the environment to fight for labour rights is vanishing. Even regular workers are being hired on short term contracts with little benefits; among formal employees, around two-third are believed to be working without even written contracts. The Labour Bureau has itself revealed the extent of the labour supply vis-a-vis mismatch — the country’s economy created only 1.35 lakh jobs in 2015, while an average 120 lakh people seek work every year. The reason the unemployment rate was pegged at 5% was because the poor took up whatever casual wage employment was available, or went into self-employment. Unlike the educated unemployed, they simply had no leeway to wait for better opportunities that may never materialise.

The situation is set to get tougher with automation, experts now fear. The projections are that by 2021, four out of every 10 jobs globally would be lost due to robots taking over from workers. And of these four jobs lost, one will be from India, predicts PeopleStrong, the country’s leading human resource solutions and technology group. The automation threat sums up to 23% of job loss in India, says PeopleStrong CEO and Founder Pankaj Bansal, pointing out to sectors like manufacturing, IT and IteS, security services and agriculture which will bear the first shocks. This is but the latest alarm being sounded in a country where governments are pinning fond hopes on skilling youths mostly for labour intensive sectors. But the logic of corporates swearing by their ‘raise productivity’ mantra demands that artificial intelligence (AI), smart systems and robots will be harnessed by just a few hundred workers to do the work of thousands. If corporates don’t take the automation route, they will not survive global competition. Not only is the manufacturing sector susceptible to automation, some parts of the service sector too are facing the prospect of job losses. In particular, workers employed as retailers, travel agents, clerks, call service providers, pharmacists and some other capacities are likely to be replaced. But opinion is divided whether, as in earlier industrial revolutions, the loss of jobs will be compensated by new jobs elsewhere. How governments in India take on the challenge of educating and reskilling the workforce to take up new jobs will bear watching. However, some are seeing silver linings in economies like India with lower and stagting manufacturing costs — actually standing to benefit from the imminent wrenching changes in production facilities. It is also being anticipated that this will force governments to focus on creating jobs with greater public investment, especially for weaker sections. Green technology, agro-based and blue water industries, various segments of human economy including knowledge processes and health care — are all potential altertives. Taxing companies employing robots, social security in the form of unemployment benefits and even universal basic income (UBI) for all citizens, may well be taken up in coming years to ensure social stability.


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