 Today, I'm going to talk about India's unemployment crisis. Everyone talks about it and it's one of the major issues that we always hear about. Does it make a difference to elections? That's a completely different story, which we will tackle in another show perhaps. But today, let's just look at the numbers. So, when I started looking at economic data, I used to think that after a certain age, everyone works, right? And those who don't get work are the unemployed. Now, that is not the case. When we talk about unemployment or unemployment rate, it's a technical term. Essentially, we have to first take the number of people who can work. So, the working age population of any country is those who are above 15 years of age. They're considered to be of working age population. They can work. But out of that, not everyone works. Not everyone looks for work because there are students, those who study after 15, obviously. There are people who are pretty old and very old, they retire and don't work anymore. There are people who, for various social reasons, don't work. There are people who are too affluent to work. There are people who are probably too weak and unwell to work. So, there's an entire range of people who don't look for work and who would not look for work in any country. This is not just India alone. Now, if we take the global average and we say that the working age population or people who are above 15 years of age are about 100, then the global average is that 61 out of them would be looking for work, would actively participate in the labour force. Now, that is called labour force participation rate, which globally is about 61%. Now, in India, I'm going to take a slightly different figure because data is such that it's difficult to actually calculate how many people are registered. It doesn't get captured a lot. Throughout this video, I'm going to be using data from the Centre for Monitoring Indian Economy, CMIE, and they're the most robust data that they collect every day and every week they publish it. And you also get the data compiled in more details every month and every quarter. So, I'm going to take what CMIE calls the greater labour force. This is not just those who say, I'm looking for work, but also those who say not looking for it right now, but would be willing to work. Because in India, there are a lot of people who have been looking for work for months and then they're too tired to look for work because they haven't got any work. So, they've given up hope temporarily, but if they get work, they will work. So, I'm going to take that entire lot and I'm going to look at that and say that this is the comparable figure for the labour force in India. In India, there are about 105 crore people who are above 15 years of age. If I take the global average of 61%, labour force participation rate as I explained, those who should be working or looking for work, then we get about 64 crore. So, 64 crore people in India going by the global average should be working or looking for work. But if I take a look at CMI's greater labour force, which is those who are willing to work, are looking for work and working, we're taking all of that together, then we get a number of just 45 crore. So, about 19 crore people in India who should be looking for work, should be working, don't even look for work, aren't even willing to work. Why is that? There could be social reasons which are different from other countries. Another major reason is that they've looked for work for years and haven't got it. They have no hope of getting any work, so they just don't look for work. That is one key big reason why the labour force participation rate is so low in India. Even what I said, CMI's greater labour force participation rate, which is those who are willing to work even if they're not actively looking for work. As I said, I'm going to be taking this number throughout. Now, as I said, 64 crore people should be looking for work. That's the global average. In China, it's much higher. In Sri Lanka, it's about 55-56%. And as I said, in India, it's much lower, about 42-odd percent. The greater labour force participation rate. Out of that, how many people have worked? 64 crore should be looking for work. Most probably need work in a poor country. How many people actually have paid work for which they get paid? Only 39 crore. So 25 crore people in this country do not have work. 25 crore people who should be looking for work, should be willing to work, do not have work. So that is the real level of unemployment in this country. So when someone tells you that unemployment is just 7%, 8%, that is not true. Because our labour force participation rate is so low, people have given up all hope of getting any work that it appears to be just 8-9%. In reality, it is much, much higher. This is just the surface of the unemployment problem. We're going to look at it in detail and make it as easy as possible to follow. Keep watching the show. So as I said, about 25 crore people who should be looking for work, do not have work in India. Out of the 64 crore people who should be looking for work. And that gives us an unemployment rate of close to 39%. That means out of every 10 people who should be looking for work, only 6 have it, 4 don't have it. And actually 3 out of those 4 have given up all hope of finding work. So they've completely gone out of the labour force altogether. It does not mean that they don't need work. It does not mean that they're affluent and therefore don't need work. It's simply that they cannot get jobs so they've given up. One of the reasons given, and I'm going to keep consulting my paper here because there are a lot of numbers to go through and I don't want to make a mistake. One of the reasons given to us is that Indians are uneducated, right? And they don't have enough education, they don't have enough skills, they're not trained. So therefore it's difficult to hire them. And that is one of the reasons why we have such low employment levels. Alright, if that is the case then it should be that those who have gone to college or more should have work, their unemployment rate should be much lower. So out of the working age population, about 10% of people, slightly lower than 10% are graduates and more. And as I said that if education is the issue, if skills is the issue, if training is the issue then they should have a higher employment rate and a lower unemployment rate. In fact, one of the things that we see that the higher the education, the more the labour force participation rate. If we take the greater labour force participation rate that I explained at the beginning of the interview, it's not just those who are actively looking forward, but also those who are not currently looking but are willing to work. Then amongst graduates in India, the labour force participation rate is about 60%, which is pretty close to the global average of 61% that we talked about. Now, what is the global unemployment rate right now? And this is in the middle of COVID. Before COVID it was about 5.5% and after COVID it has gone to 6.5%, which is pretty bad. It's not good. I mean, as I said, if 100 people are of more than 15 years old, they are working age population, 61 out of them want work. As I said, 61% is the labour force participation rate globally. 4 don't have work. 6.5% of the 61 is close to 4, so 4 don't have work. That is not a great number. I mean, you know, not having work, you might think it's a very small number, but not having work makes a huge difference to people's lives. Now, what about India when I take a look at graduates? Again, I said that the labour force participation rate, the global greater labour force participation rate amongst graduates is not bad at all. It's close to 60%. So if 100, there are 100 graduates in the population, 60 of them are looking for work or are willing to work, how many have jobs out there? 16 out of them didn't have work. 16, that's the number. 16, that's more than 26% of 4 times the global average unemployment rate. More than 26% greater unemployment rate amongst graduates in India. So graduation, education makes no difference. In fact, the more educated you are, the higher the unemployment rate amongst Indians. That's the amazing fact. So it clearly means that the educated do not get jobs and education has nothing to do with getting jobs. All right, another thing that we see and this is in some way related as well. And this has to do with the fact that younger people in India, right, have a higher unemployment rate. This is a crucial thing to understand. For instance, if I take those who are between the age of 20 to 24, which is they're starting off, they've just graduated or finished school and they're starting off new jobs, almost half of them, 46% are unemployed. The greater unemployment rate there is 46%, all right, younger people. As they get older, once we go to between 25 years to 29 years, that unemployment rate drops to 15%, pretty high even then. Then it drops further to 6% and then it keeps dropping till we reach the age of about 45 to 65, the last age of one's working life, 45 to 65, the last 20 years. The unemployment rate, the greater unemployment rate just drops to just 2%. Just 2%. What does that tell us? That tells us that the quality of jobs that India provides is poor. Younger people join the workforce. They look for work. They don't get what they want, right? What they think is a good job. They hold on for a few years. They think they'll get a better job and gradually they begin to compromise. So by the time they're 25, they have to settle down as their parents and relatives say, get married. You have to settle down. You need a job. Now take whatever you've got and the unemployment rate drops from 46% to 15%. A little further, by the time the person is 30 years old, the family is putting a lot of pressure. You have to take this job. You've got this job, just don't hold out. If you get a better job, switch. So they then take the job and the unemployment rate drops to 6%. By the end of it, by 35, they take whatever they have. So the quality of jobs, what people want, what they aspire for is not available. So even if they're working, it's not really their dream job. It's a compromise that is probably three, four steps ahead of what they wanted. Three, four steps behind what they wanted, actually. So that is one of the reasons why we see that as people get older, as the workforce gets older, unemployment rate drops because they're willing to take any job. That could also mean that the joblessness or unemployment rate has actually increased over the past two decades. Because think about it. Those who were in their mid-20s, 20 years ago, would be in their mid-40s now. And we know that the unemployment rate there is just 2%. Those who were in their mid-20s, 10 years ago, in their mid-30s now, and the unemployment rate there is about 6% to 4%. So it is possible that people were getting jobs which they've held on to 10 years ago, 20 years ago when they joined work. Now it's becoming more and more difficult. I think the truth is probably somewhere in the middle. One is that probably getting jobs has become much tougher now for younger people. Number one. And number two, younger people don't take any job at all. They want to wait for a better job. And as they get older, they compromise and take jobs. Alright, so two things gone. Education doesn't matter. The more educated you are, the more unemployed you are likely to be. The younger you are, the more unemployed you are likely to be. And now there's another thing that is said that, okay, actually when you talk about India's labour force participation rate, this is actually a wrong figure because in India women don't work. Could be true. There are social conditions under which in various societies women don't work. It's also been argued, and I've heard this argument for the last, I'd say 10 years or more, that women are falling out of the labour force. They're not participating in the labour force because families are getting more affluent. And as they're getting affluent, women no longer have to go out and work. Now, of course, it's a laughable thing to say because even male employment is so low in India that if no one's earning in the family, how can the woman stay at home in any case? We know that's not the case, but even if it were the case, right? If that were the case, then women's unemployment should be low. Because look at it, the greater labour participation rate, which means that the number of women who are willing to work, are looking for work and are working is just 12% in India. Just 12%. This is CMI's data. And globally, that rate is 47% out of 100 working age people, 47 women globally on an average work. In India, only 12 look for work or are willing to work, only 12. But if only 12 are looking for work and willing to work, then one would imagine that most of them would be employed because if the demand is so low, then that should more or less meet the supply for women workers, right? But here's the amazing figure that the greater unemployment rate, that is the number of women who don't have work but are willing to work or are looking for work, is 36%. 36% of women who are willing to work and are looking for work don't have work. And mind you, that's just out of 12% of the female working age population. So it is clear that even if women wanted to work, they wouldn't get work in India. So this entire thing of women not wanting to work is actually poppycock. It's not true at all. The truth is women do not work because they cannot get work. They have no hope of getting work. So they've moved out of the labour force. And when I say don't work, I mean paid work. Because we know surveys have shown, recent surveys have also shown us that women do an overwhelming amount of housework which takes hours to do. So they have to cook. They have to clean. They have to raise the kids. They have to run the family. They have to do the washing. And in rural areas, they have to walk for miles to fetch firewood and water. And it takes the entire day. So even if they went out to earn money, they would not be able to give the entire day, not be counted as a full working day. That is also an important thing to remember. So therefore, there are these three things we have right in front of us. Education doesn't matter. The more educated you are, the less your chances of getting proper job. The younger you are, the less chances of you getting a good job. And if you're a woman, it's very unlikely that you're going to get a job. That's the truth about India's unemployment levels. The real unemployment level, if you go by global figures of labour participation, rate of 61% of the working-age population, our real unemployment rate is 39%. 39%, that's a huge, huge number, right? It is not the 89% that you hear. The 89% is because people just don't look for work anymore. They have no hope for looking for work. Does that matter in elections? The amazing thing is that it does not. But as I said, that is another show.