It is high time India handled the unemployment woes on priority, taking advantage of the current workforce crisis globally. Almost all major developed countries are reeling under the acute shortage of workforce from during the onset of the pandemic, getting an allowance from the government and are not keen to return to work. At the same time, their present workforce also is leading towards ageing. India should take it as a big opportunity to export and deploy its young workforce globally. Around 44% of the population in India is aged between 18 and 25, the largest young workforce anywhere in the world. There are 13 million active job seekers on the portal of the Union Ministry of Labour and Employment with the vacancies at 2.20 lakh in private and government sectors.
The International Monetary Fund (IMF) has placed India as the fifth growing economy in the world. At the same time, the Indian economy is not creating many jobs, thus not harnessing its demographic dividend fully. Every year, 12 million young people reach employable age, which separates India from the USA, Japan and Germany, which have middle-aged or elderly workforces and are facing an acute shortage of young workforce. India is the only country where the supply of workforce is growing faster than demand. This growing young workforce can be absorbed globally.
The Centre for Monitoring Indian Economy (CMIE) reported an 8.28% unemployment rate. In case of Punjab, 28% of the young force in the 20-30 age group is unemployed. Unemployment in Punjab is essentially educated in nature, with 61.6% being matriculates or above. Nearly one-fourth of them are technical, or professionally trained, being diploma holders, engineers and trained teachers. Lower employment among educated youth is associated with poorer mental health, crime and drug abuse. Given the magnitude of unemployment in Punjab and the number of youths who migrate in search of jobs, there is a golden opportunity for them in the US, Europe, Canada and other nations. Punjabis are well recognized globally for their toil and commitment to work.
It is appreciable that the Aam Aadmi Party (AAP) government came with an assurance to accelerate abundant job opportunities in the state to plug the brain drain from Punjab to overseas shores. However, it is a long-term action plan. In the current scenario, Bhagwant Maan’s government should put in place a fine-tuned strategy to enable its youths to become an active part of the workforce in developed countries. There is a massive shortage of truck-cab drivers, construction workers, farm labourers, IT professionals, cooks, chefs, plumbers, carpenters, health workers, retail stores, food service managers and supervisors.
HUGE EMPLOYMENT OPPORTUNITIES
The European Commission has projected that without migration, the European Union (EU) workforce will shrink by 96 million workers by 2030 – more than the current population of Germany. The global skilled workforce shortage could result in $8.452 trillion in unrealized annual revenue by 2030, equivalent to the combined GDP of Germany and Japan. The impact of the workforce crunch is so significant that the predominance of London as a global financial services centre, the USA as a technology leader and China as a key manufacturing base is crumbling.
The ageing workforces of developed countries are trying to carry forward the manufacturing and services sector with the help of new technologies like Artificial intelligence (AI) and the Internet of Things (IoT) that are fusing the physical, digital and biological worlds, but this fusion and ageing have limitations. India is the only country that can expect a surplus young workforce driven by a burgeoning working-age population.
USA
The United States of America (USA) faces one of the most alarming young workforce crunches. This is partly because America’s population is greying rapidly, with 10,000 baby boomers reaching retirement age each day for the next 19 years. By 2030, the United States could experience unrealised revenue of $1.748 trillion due to labour shortages, equivalent to 6% of its entire economy. The United States’ skilled worker deficit is expected to reach more than 6.5 million people by 2030. The sizable demand for the workforce will be driven by the financial and business services sector.
According to the US Chamber of Commerce, from across industries, transportation, health care and social assistance, hospitality and food sectors, manufacturing, wholesale to retail trade, there are umpteen job openings. There is a 55% shortage of labour force in the consumer goods manufacturing sector, 70% in wholesale and retail trade, 20% in financial services and 35% shortage of workforce in the leisure and hospitality sector.
The manufacturing industry faced a major setback after losing around 1.4 million jobs at the onset of the pandemic. Since then, the industry has struggled to hire entry-level and skilled workers. As per the US Bureau of Labour Statistics, about 2,31,100 openings for heavy and tractor-trailer truck drivers are projected each year. The American Trucking Association estimates the shortage of over 80,000 truck drivers, this figure is to reach 1,62,000 by 2030.
EUROPE
The situation is quite alarming in Europe, which is facing multiple challenges because of the lingering Ukraine-Russia war. It is currently facing an unrealised revenue of $1.906 trillion thanks to the labour shortage of 14.3 million. Europe is set to suffer severe skills shortages, with the unrealised output of the EU countries totalling $1.323 trillion by 2030 due to talented workforce deficits, particularly in the financial and business services sector. This EU-wide problem indicates the free labour movement benefits of European Union membership are unlikely to provide a solution to the shortage of skilled workforce.
JAPAN
Japan is the third key manufacturing nation facing an acute shortage of workforce. It may struggle to maintain its spot in the world’s top manufacturing ranks as it faces immediate labour deficits. Studies reveal that by 2030, Japan will fail to generate $194.61 billion of revenue due to labour shortages. Japan’s low birth rate and tightly restricted immigration are contributing to its shrinking workforce pool. Both its population and labour force participation levels will fall by the end of the current decade.
CANADA
Canada is in the throes of a serious workforce shortage. There are not enough younger workers to replace those who are 55+. A large number of them retired during the pandemic. They are getting an allowance from the government and are not keen to return to work. Construction, manufacturing and transportation sectors are having a difficult time recruiting skilled workers, followed closely by hotels, restaurants and bars. The vacancy rate in truck transportation constitutes the second-highest vacancy rate in the Canadian economy after the accommodation and food services sector.
GERMANY AND OTHERS
Germany will see the next biggest impact after Japan in its unrealised output due to manufacturing labour shortage, with the deficits already intensifying. Germany, a leading manufacturing hub, is facing a shortage of 2.4 million workers. It is estimated that by 2030, Germany’s unrealised revenue will zoom to $77.93 billion when the labour shortage mounts to 10 million. Across the manufacturing sectors in the top 10 economies, Hong Kong and Singapore will be the hardest hit. By 2030, Hong Kong’s workforce deficit will be equivalent to 80%. Singapore may face labour shortages of more than 61%. Brazil, the world’s fifth most populous country, is also one of the few countries that will encounter a shortage of labour across all skill levels which will result in unrealised output equal to 13% of its economy.
THE NEED OF THE HOUR
The Central or state government’s efforts should be intensified to equip our youth with IELTS (International Language Testing System) and skills at the school level. The standardisation and certification of skill courses should be aligned with the International Occupational Standards.
The Overseas Employment Division of the Ministry of External Affairs (MEA) should play a proactive role in ensuring hassle-free movement of job seekers. It will save them from exploitation and fleecing at the hands of travel and immigration syndicates. The MEA can coordinate with the respective countries’ MEAs, recruitment agencies and industrial chambers to create a job platform. This platform should not only guide them, but also help them in finding jobs as per their skills.
If we work with an innovative and inclusive approach, not less than 80 million people will benefit from overseas job opportunities in a few years.
It won’t only ease the pressure being created out of mounting unemployment at home, but will also give a boost to the economy of millions of households. It is just a matter of rising to the occasion and having an interconnected ecosystem to scale up the efforts for Indian youths to grab global employment opportunities.
The writer is Vice Chairman of Sonalika Group, Vice Chairman (Cabinet Minister-Rank), Punjab Economic Policy and Planning Board, Chairman, ASSOCHAM Northern Region Development Council. Views expressed are personal.
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