I have an acquaintance in the construction business in Delhi. Forget skilled labour, he claims even unskilled labour is impossible to obtain, despite market wages being considerably above minimum wages. Apparently, traditional sources from eastern Uttar Pradesh and Bihar have dried up and supply is now predominantly from northern Bengal. He claims migrant workers from northern Bengal have a work ethic problem, thanks to Left influence. But let’s ignore that. Notwithstanding NSS (National Sample Survey) data from 2004-05, there is a prevalent mindset that there is an enormous employment problem.

Agricultural employment and self-employment belong to a slightly different category. Let’s talk about non-agricultural wage employment. Here is a quote from the Approach Paper to the 11th Five Year Plan, written in December 2006, that is, after NSS 2004-05. “Growth without jobs can neither be inclusive nor can it bridge divides... Employment is an area which shows up where our growth process is failing on inclusiveness. The number of workers is growing, particularly in non-agricultural employment, but weaknesses appear in unemployment, the quality of employment, and in large and increasing differentials in productivity and wages.” Pointing to the quality of employment (informal, low productivity, low wages, lack of protection) is one thing (as National Commission for Enterprises in the Unorganised Sector did in August 2007). Saying that there is an overall non-agricultural employment problem is another.

The industry perception is unambiguous. Workers aren’t available. This is often a comment on lack of requisite skills, but is also increasingly a comment on non-availability, regardless of skills. Spatially, we therefore have a mismatch problem, something the Approach Paper dismisses in half a sentence and Economic Survey 2007-08 doesn’t even mention as an issue. There are geographical areas and segments where there is excess demand and ones where there is excess supply. Unorganised sector male wage employment is primarily in manufacturing, construction, trading and transport. For women, trading and transport can be replaced by domestic services. Depending on how we count, the total is between 53 and 75 million. These figures are from 2004-05. They must have increased since then and it’s a considerable number. Hence, we should ask the question: How do these workers find out jobs are available and decide on temporary or permanent migration? The answer is simple. Barring limited instances of job offers at factory gates, there are only two channels: informal (family, caste, community) networks and labour contractors. This kind of information dissemination can’t be efficient, apart from commissions paid to agents.

... contd.