Unemployment
Source : Google photo of unemployed people
Synopsis : The ever growing population in any country seeks employment because it is necessary to earn a living. When they depend on the government to employ them, they find it nearly impossible because no government can provide job to each and every citizen. The alternative is to get the type of education and training the private sector needs to employ them. This blog looks at many other possibilities for the jobless people.
Today we hear of unemployment in many countries where it becomes a political issue when people start blaming their government for not creating jobs for them. In some countries where the working population is approaching their retirement years, it creates the opportunity for the younger generation to fill those vacancies but it does not create necessarily new jobs.
As the educated population increases in a country because of increase in the number of better educational institutions ,they all seek employment after their graduation but the number of new applicants far exceed the available jobs so there is fierce competition. So how can the new graduates get employed?
Is it possible for any government to create millions of jobs for the people? Why is it that everybody seeks government jobs ? As any country develops and grows economically , it happens because the government makes it possible for the private industries to develop and grow due to the development of the infrastructure all over the country. It means new roads, new power stations, new connectivity through new road and rail network, water connection, new connections to freight terminals, air terminals , new internet and wifi connections, new rules and regulations that make it easier for the business in the private sector to grow and create employment for their industries.
This is how a country creates jobs for the young aspirants where the government plays a major role in making it possible for the private industries to establish and grow there.
India is an example of such growth in many sectors namely the IT industry, telecom industry, generic drugs industry, agro industries based on food processing, transport industries by land , sea or air, service industries, e commerce , entertainment industry just to name a few.
No private industry in any country can build thousands of kilometers of roads, bridges or rail network because it requires massive investment that only a government can make using the tax money and other sources of revenue . When the government gives the contract to build the infrastructure to the private companies, they employ millions of people to do so .Once the infrastructure is developed, the private sector rapidly expands thus creating employment for the new graduates. New factories come up, new schools, hospitals and shopping malls come up where many find jobs.
If you look at the so called developed countries, you will find lower unemployment rate there because their industries need new employees to replace the ones retiring or where new jobs are being created in new industries. The government makes rules and regulations to restrict the import of raw materials or manufactured goods from other countries to give the local industries the advantage they need due to higher import tariffs. The protection of local industries and subsidies to farming sector are some of the tools the governments use create or maintain employment levels in many countries.
But the growth of the industries for job creation in the competitive world today faces many challenges . No country can unilaterally impose such tariffs on other countries where the labor and manufacturing costs may be lower giving them an advantage over the high labor and manufacturing costs in other countries so they may retaliate by imposing their own import tariffs.
If you take the example of China, you will find that their government has made a sustained effort over the years to make it possible for the private sector to grow there rapidly creating millions of jobs. The government there makes it possible by creating special economic zones in many parts where it provides land, electricity , water, road and rail connection , tax exemption for a period , special subsidies for the raw materials and many such facilities so that the private industries can establish there and grow.
Such help from the government has made it possible for their industries to grow at a phenomenal rate. The government also helps find markets for their export in many countries by making special arrangements through bilateral treaties and agreements where it buys their raw materials at a favorable rate and sends back the manufactured goods there.
Long ago the British did the same in India where they bought the high quality cotton at a cheap rate from the farmers and sent it to England to make clothes they sold in India thus discouraging the development of the local industries. This was done during the colonial period to develop England at the expense of their colonies but this method today does not work .
Now countries like India and China are rapidly growing industrially and make almost everything they need so they import only those products that are essential for their growth in agriculture and other sectors. Most of the trade deals made between countries are now regulated by the WTO that serves as the arbiter in case of disputes between the member countries.
The role of Internet
In the last decade or two the internet has spread throughout the world even in poor countries and has made a huge impact in the growth of many industries that are based on the internet technology and IT. It has created jobs for millions of IT graduates who run their own business using the Internet or work in numerous call centers providing a service to their clients through the Internet.
Bengaluru in South India and Hyderabad in Central India have become the IT hubs where many new IT based companies have established themselves and employ massive numbers of graduates. The internet has helped the growth of e commerce in a spectacular way. Now anyone with a smart phone can download an application and order practically anything from the vendors who will delivered it to your doorstep in a very reasonable time.
There are many options open to you for the payment like credit card, cash upon delivery or other applications like paypal. Internet and e commerce has made Alibaba and Amazon a household name but there are many such e commerce companies that have flourished because of Internet. Now more than 40% of the world population has access to Internet that has created millions of new jobs. This will grow more in the future.
Alibaba alone employs thousands of people in China and elsewhere to deliver to your door what you order on line from them so they use people on bicycles and motorbikes to reach even the remotest villages in China. The convenience of buying anything from the comfort of your home is very appealing because you do not have to travel a long distance to the store and fight the traffic and the huge crowd.
In India the food is being delivered to your door when you apply on line . This sort of service employs thousands of people all over the country making life easier for people. One company in Mumbai has turned every household that wants to join it into a mini factory where housewives make papad which is like a tortilla made of mungbean dough and make money based on the quantity of papad they make. It employs thousands of housewives this way and pays them only for making the product but women earn a good income working from their homes.
Another company delivers food to thousands of employees in their offices by hiring people on bicycles to pick up food from their homes and delivers it to the employees for a small fee . So there are many new ways companies are creating jobs for others.
There was a time when people only aspired for the government jobs because it meant a lifetime of job security, pension and other benefits but no government can employ all the job seekers in any country so now the private sector steps in and offers opportunities for them.
It is estimated that every person with a steady job supports at least ten people who are called the service providers. They are your neighborhood grocers, vegetable sellers, meat sellers, washerwomen , tailors, repair men , people in transport service, shops that supply everything you need, entertainment service, sport facilities, fashion industry and numerous others . So just one million employees end up supporting over 10 million people in the service sector. They in turn support their families and 10 times more others. This is called the ripple effect that creates jobs for others in the private sector. The employment and unemployment figures published by the government do not paint the whole picture of a country.
Every employed person not only feeds his family , he creates the market for his demands or needs so new factories come up everywhere to fill those demands. It may be a bicycle or a scooter or motorbike that he needs or even a car if he can afford it or new readymade clothes or smart phones or electronics that he wants to buy. The new factories thus employ millions of people to manufacture the things the consumer wants creating intense competition among them to manufacture products of higher quality at a cheaper price.
This competition between the rivals helps make better and cheaper products in the market worldwide giving huge advantage to countries that make them for the benefit of the consumers everywhere. China is a good example that has become the manufacturing center of the world but other countries are also trying hard to catch up to make quality products where they have an advantage of low labor costs.
Source : Google photo of women in clothing factory in Bangladesh
You can now observe how Bangladesh, Cambodia and Vietnam are fast becoming the manufacturers of ready to wear clothes, sport equipment , motorized vehicles, electronics including smart phones and computers creating many employment opportunities for their citizens. They make toys, shoes, leather goods, cheap watches, utensils and many such products for the export market that earns them huge revenues and employs lots of people.
Thus the middle class earns it’s nick name as the motor that drives the development of a country. When the poor people improve their earnings and join the middle class, it swells their numbers dramatically like in China and to some extent in India. But the growth of the middle class comes at the expense of the farm population that keeps declining in many countries.
The point is that one should not always blame a government in any country for the unemployment there because the government can only employ a small fraction of the unemployed. The answer lies in the private sector where most of the jobs are created often with the government support as I explained earlier in the blog.
Most people are self employed because the consumers create the demand that they try to meet . There was an old Sikh couple in my home town who made delicious street food they sold at a street corner every evening at a very reasonable price. It was so popular that he sold out all he made in a few hours everyday and appeared with fresh food the next day. It made him earn a decent living. There are millions of such people who make a decent living by being self employed.
The aspirations of graduates:
Now I come to discuss the aspirations of educated people who want a white collar job and are frustrated when they find it hard to be employed. When I was a student in California, I often asked my dorm mates what they wanted to do after graduation. Their common answer was that they did not know what they wanted. Only a few said that they wanted to be an architect or an electrical or mechanical engineer or an artist.
So there is a mismatch between what the market demands and what the colleges and universities train their students to be. Those students who take courses in IT or related sciences, those who take business management or courses related to healthcare or medical technologies, those who take computer science and learn programming or software development courses, those who learn the computer animation , those who learn to make programs for video games etc. find themselves in high demand even before they graduate because the private companies desperately want them and offer very good salaries and perks to them.
Source : Google photo of women assembling smart phones in China
As the new technologies are developed in practically every field, there is a need for the technicians to run these industries that use such technologies. In China a simple girl with practically no education assembles complex smart phones or other such products in an assembly line in huge factories because they are trained to do so.
In Bangladesh a village woman gets a job in a cloth manufacturing plant where she sews parts of a garment that others assemble in huge factories. She is not a tailor but learns to operate machines that make clothes for export. So not all the factories need highly educated people to run them because most of the jobs are routine that require a short training course given freely by the company.
The highly technical jobs are reserved for highly educated people with proper background and training so they becomes managers or supervisors or become trainers for others.
The agricultural sector :
This is the sector that employs millions of poor people who have no skills whatsoever and no education but can cultivate land, pick the harvest and do other chores required in the farming. The farming also includes dairy farms, chicken farms and factories that process agricultural products like fruits ,vegetables or subsidiary products. Most people find it hard to work in the farming sector where the pay is low and work very hard so a huge number of immigrants from other countries take up such jobs.
The immigrants work hard and get paid low wages but they work because they have no other choice. They also have no social security , health benefits or pensions so they are treated as casual laborers who have no job security at all. Often the plantation owners employ such people at starvation wages and make them buy their groceries at the company operated stores at higher prices that leads to abuse of such workers who remain poor and almost destitute.
Remember Cesar Chavez who tried to organize the farm laborers in California and was badly treated by the rich farmers who asked the help of the police or goons to beat up the protesters who were only asking for decent wages and some job security? He was able to organize the farm workers and made a union to protect their rights. He died in 1993 but was awarded the Presidential medal of freedom posthumously for his lifelong work to help the farm workers get better pay and benefits.
People who work in farms and factories are often treated this way and abused because they do not have the education or skills to find other jobs. This is the great divide between the educated and non educated people. People with right education and training can demand a good salary and benefits and get it while the poor people are happy just to get any job no matter how low is the salary.
The future :
I willl conclude this blog by saying that the future belongs to those who are prepared for it. We now live in the world of fast changing and developing technologies that open up new possiblities for employment all the time for those who get the kind of education and training the new companies need. These jobs will require special education and training that may cost a lot so it is not for everyone. It is very hard to get into any business school anywhere these days. The medical colleges also are very selective in taking in new students and medical technology colleges are very difficult to get admitted to.
So the new graduates will have to seek employment wherever they can so many will emmigrate to other countries where they may have a chance. But for the vast majority of people seeking jobs will have to face the hard reality that higher paying jobs that require special education and training are reserved for those who have it so they have to accept lower paying jobs somewhere if they are lucky.
One way to make a decent living anywhere is to get vocational training that does not require college education but trains people in carpentry, electrical repairs, masonry, welding, car mechanics or refrigerator or airconditioner repair, electronics repair, appliance like washing machines or other household gadgets and appliance repair, plumbing and numerous other trades that pay very well.
My mechanic who fixes and maintains my car makes more than a college professor and lives in his nice home where he also has his garage. No job should be beneath anyone although we should all aspire to be employed somewhere with decent wages.
So the young people should make up their mind when they start their college education and decide what they want to be and exert all their effort in that direction. Such people always get to where they want to go if they are so determined. All they need is the right sort of education and training that meets the demands of the market.
Note : My blogs are also available in French, Spanish, German and Japanese languages at the following links as well as my biography:
La biografía de anil en español.
