Why in the News?

The ambitious ₹2 lakh crore employment package aims to create 4.1 crore jobs, but evidence shows low wages and short-term skill programs hinder long-term sustainability.

Low wages and short-term skill programs hinder long-term sustainability:

• Low Wages Lead to Economic Insecurity: Low wages create economic insecurity for workers, making it difficult for them to meet basic needs. For instance, in the garment industry, there is a 48.5% gap between minimum wages and living wages in major garment-producing countries.
• Short-Term Skill Programs Fail to Enhance Employability: Many short-term skill programs do not provide the depth of training needed for long-term employability. In India, for example, 75% of technical graduates and 90% of other graduates are considered unemployable, primarily due to a lack of practical skills and experience that employers seek.
• Stagnation of Workforce Productivity: When workers are paid low wages, there is little incentive for them to enhance their skills or productivity. This stagnation is detrimental to both individual career growth and overall economic development.
• Lack of Investment in Long-Term Skill Development: Low wages often correlate with limited investment in employee training and development.This is evident in the fact that only 15% of those trained under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) found jobs, indicating that short-term training initiatives are not effectively translating into sustainable employment outcomes.
• Perpetuation of Poverty and Inequality: The combination of low wages and inadequate skill development contributes to the perpetuation of poverty and inequality. With 42% of the global workforce in vulnerable employment.

12-point policy initiatives for sustainable mass employment:

• Identify the skill need: Begin from below through decentralized community action to identify skilling needs. Create a register of those wanting employment/self-employment and a plan for every youth in partnership with professionals at the cluster level.
• Initiative at the local level: Converge initiatives for education, health, skills, nutrition, livelihoods, and employment at the local government level with women’s collectives to ensure community accountability and effective outcomes.
• Vocational programmes: Introduce need-based vocational courses/certificate programmes alongside undergraduate programmes in every college to improve employability.
• Healthcare at international benchmark: Standardize nursing and allied health-care professional courses according to international benchmarks to meet the demand for skilled professionals.
• Women security: Create community cadres of caregivers to run crèches universally so that women can work without fear.
• Invest in skill development: Invest in ITIs, and polytechnics as hubs in skill development for feeder schools with a focus on States/districts with the least institutional structure for vocational education.
• Startup skills in high school: Introduce enterprise and start-up skills through professionals in high schools to impart finishing skills to students.
• Apprenticeship program in Industry: Have a co-sharing model of apprenticeships (combine practical training in a job with study) with the industry on scale to ensure the industry has a stake in the apprenticeship program.
• Absorption of youth at the workplace: Apprenticeships on the scale can facilitate the absorption of youth in the workplace, with the government’s condition for employer subsidies being wages of dignity on successful completion of the apprenticeship.
• Capital oan for women: Streamline working capital loans for women-led enterprises/first-generation enterprises to enable them to go to scale.
• Skill accreditation programme: Start a universal skill accreditation programme for skill-providing institutions, with candidates co-sponsored by the state and employers.
• Majority of fund in water scares block: Use 70% funds under MGNREGA in 2,500 water-scarce blocks and blocks with high deprivation, with a thrust on the poorest 20 families and a focus on skills for higher productivity.

Way forward: 

• Strengthen Industry-Academia Linkages: Enhance collaboration between educational institutions, industry, and vocational training centers to align curricula with industry needs, ensuring employability through internships, apprenticeships, and job placements.
• Focus on Inclusive Skill Development: Prioritize investment in underdeveloped regions and marginalized groups by expanding access to quality education, vocational training, and entrepreneurship opportunities, especially for women and youth, to bridge the skill gap and promote economic inclusion.

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