The Emerging Threat of Technological Unemployment
The impact of AI is not just limited to displacing manual jobs; it extends to skilled labor. With AI capable of absorbing and synthesizing information on an unprecedented scale, jobs requiring specialized knowledge are also at risk. This poses a particular challenge for India, which is already grappling with significant employment issues. A report in 2022 highlighted four major types of unemployment in India, illustrating the depth of the problem and the inadequacies of current data reporting.
Types of Unemployment: Beyond the Surface
India’s unemployment scenario is far more complex than simple joblessness. The reality of “employment” in India often doesn’t account for the nuances of job security, adequacy, or sustainability. Here are the four types of unemployment prevalent in India:
1. Visible Unemployment: These are individuals actively seeking jobs but unable to find them. In countries with robust social security systems, such as unemployment benefits, job-seekers can afford to wait for suitable employment. However, India lacks such safety nets, meaning people often cannot afford to stay unemployed. To survive, individuals may resort to low-paying or unsuitable work, resulting in a compromised workforce and overall economic stagnation.
2. Underemployment: The official definition of employment in India is surprisingly lenient. For instance, working just one hour a week qualifies an individual as “employed.” This standard creates an illusion of employment, but these individuals cannot sustain themselves or their families on such meager work hours. Underemployment is, therefore, a pervasive issue in India, with real rates possibly closer to 10-15% rather than the 3-4% reflected in government statistics.
3. Disguised Unemployment: Many Indians work in family businesses or farms where their presence adds little value. Because of limited opportunities, individuals often end up in roles that do not utilize their full potential, effectively counting them as “employed” even though their work lacks productivity. This form of disguised unemployment distorts official statistics, as people who add minimal economic value are considered employed.
4. Discouraged Workers: A substantial portion of India’s potential workforce has become so discouraged by the lack of opportunity that they’ve stopped looking for work altogether. This is particularly prevalent among women and educated youth, whose labor force participation rate (LFPR) is disproportionately low. While countries like the U.S., China, and Brazil have LFPRs around 65-70% for the relevant age group, India’s rate lags significantly at about 45-47%, per ILO standards.
The Grim Reality for Educated Youth
India’s educated youth face some of the highest unemployment rates, with over 58% of the unemployed falling into this category. Recent data illustrates the desperation among young Indians to secure stable employment. For example, a police recruitment exam in Uttar Pradesh attracted a staggering 4.7 million applicants for just 60,000 positions. The pressure on infrastructure and resources to accommodate these numbers was so intense that the process was marred by logistical failures, including paper leaks that led to exam cancellations.
This demand for jobs has led to extreme cases, like the 2016 recruitment drive in Uttar Pradesh where 23 lakh applicants, including those with advanced degrees (BTech, MTech, PhDs), vied for just 368 government peon positions. Such a scenario highlights the inadequacies in job creation and the sheer desperation among educated individuals who, unable to find suitable work, are willing to apply for any available position, even those far below their qualifications.
The Role of Artificial Intelligence in Worsening the Employment Crisis
As AI continues to advance, it brings with it the potential to worsen India’s employment crisis by automating roles traditionally filled by skilled workers. This is not only limited to blue-collar jobs but increasingly impacts white-collar professions as well. In healthcare, for instance, AI has the capability to digest millions of medical articles to provide diagnostic recommendations or prescribe treatments, a feat that no doctor could achieve in their lifetime. This level of proficiency raises questions about the future employability of many skilled professionals.
The trajectory of AI suggests a future where many existing roles will either be obsolete or radically transformed. With India already struggling to keep up with demand for employment, the impact of AI could prove disastrous unless mitigated by forward-looking policies.
Policy and Protection
To prepare for this inevitable shift, India must reconsider its approach to employment data, redefine what constitutes “employment,” and strengthen social security mechanisms. Robust policies aimed at skill development, labor law reforms, and support for emerging sectors can also help mitigate the impact of AI. Moreover, a stronger social safety net is essential, especially as more individuals are likely to face underemployment and disguised unemployment in a tech-driven job market.
The coming years will require policymakers, industry leaders, and educational institutions to work in tandem, creating a workforce that is adaptable and equipped to handle the transformative potential of AI. Addressing these issues will not only prepare India for the challenges ahead but also create a more equitable and resilient economy that can thrive alongside technological advancements.
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