Nowhere to Go (learn or layoff)

Is it possible that our best intentions for labour are not actually met by laws that sound progressive on paper but end up hurting the very workers they are meant to protect ? 

                                  ~ Manmohan Singh

Have you  thought what you gonna do after you pass-out from your reputated schools and colleges ? Well the majority will look forward for jobs . 

But what if I say we won’t have much jobs in future Or even if we do we won’t have the ‘appropriate jobs’ for our workforce . 

No matter which sector or which industry you are planning to dive in, job crunch gonna hit each and every sector and each and every industry . 

 One can argue that how this can be possible when such a rapid growing county like India, touching growth peeks as high as 9% even while the whole world is facing slow growth rate ( negative for some countries), gonna face job crunch . Well, if you look more closely then this high growth seems more unsustainable as what we are currently facing past few years can be termed as ‘Jobless growth‘. 

What we mean by jobless growth is that we are bagging high growth rate but it’s not suitably backed by high emploment rate . A  recent literature revealed that the average growth rate of economy was 7.7 % pa. , while it was only 1.8% pa for employment. 

When Productivity gain starts hurting …

Since output is growing faster than employment , it is obvious that output per worker, or what we call  Labour Productivity  is rising rapidly. But unfortunately this growth owes to the growth- enhansing ‘structural change‘ , which means that one sector in economy expands their productivity at expense of other sector . And this looks quite true . 

Service sector continue to help India gain higher growth however, in terms of employment , service sector holds only 25% , half of what employed by agriculture sector . 

So what‘s the problem ? 

 The problem with this structural growth enhansment is in its future . The service sector seems to be already reaching its threshold .  Besides similar trend of lay offs,like in manufacturing sector, is seen in service sector with major IT companies like Infosys, Cognizant , Wipro & Tech Mahindra plan to lay off thousands of employees . The reason for job cutting is said to be Automation & Productivity. With more advancement tech firms can take the higher amount of service with lesser amount of employees . Unfortunately majority of skilled workers  posses the set of skills which can be automated . Same is the case of Telecommunication and Banking sector . With the Advent of automation current skill sets are outdated.

Further, India’s service sector cost advantage is also running out with foreign countries making laws protecting there countrymen and jobs . One such recent example is changes in America’s H1 visa policy . Earlier Indians use to work at lower wage rate in foregin country thus grabbing the job opportunity away from local residents. But new rules force companies to set minimum wage which is as high as demanded by locals . This means India will loose jobs in foreign nations too. 

A more deeper implication arising out of unemployment  is that apart from all financial and emotional trauma unemployment brings to an individual and upon it’s dependents , lack of jobs also compels the local comunities to ask for reservation in govt jobs as they can’t score in shrinking private jobs. But not to mention govt jobs have also shrunk in recent past few years.

What can be done ? 

The only long term possible solution is to raise the skill level of majority of workforce. But in a country like India where majority of workforce is unskilled updating skills will  to take few decades. In short & medium term, it is labour intensive manufacturing that would need to grow to absorb year by year growing pool of workforce. However,this has not  has happened so far . As a result, India’s manufacturing sector accounts for only 15% of national employment. 

Besides, the major problem is in the composition of manufacturing sector. According to recent data by ILO, 87% of India’s manufacturing employment is in informal sector,  where productivity is low. 

The major fast growing industries like automobile, petroleum, chemicals are depending mostly on automation. Remaining high labour -intensive industries like Textile, Gems, transport are performing at small scale level and that also  most of them in informal sector .

 While in China most of the manufacturing employment is concentrated in large enterprises with 1,000 workers or more, in India it is concentrated in those with lower than 20 workers.As a result, efficiency in India is relatively low and costs are relatively high, resulting in a serious handicap in world markets.

Factors responsible for forcing firms to remain small and unregistered includes reservation of small & medium enterprises in labour -intensive sector, poor infrastructure and rigid labour regulations that make it extremely difficult to fire workers in response to contraction in demand or incompetence. As a result, firms are reluctant to hire workers.

The only feasible solution  

Indian firms use more capital- intensive techniques of production and produce more capital-intensive products than countries at the same stage of their development. The high capital intensity is also a response to India’s labour regulations that make labour (adjusted for its productivity) more expensive, forcing firms to substitute away from it into capital. Thus the major step to bring country out of this jobless trap goes through labour regulation. 

• Raising firm employment size for seeking permission for laying off workers from 100 to 300 workers under the Industrial Disputes Act.
• Cutting down cumbersome and repetitive labour laws, beside putting labour law under state list. 
• Making new rules regarding work strikes which result in huge productivity loss. 
• Checking  on growing militancy in labour Unions. 
• Encouraging more industrial start ups and giving more incentive to labour-intensive industries to grow and produce at large scale. 

Where are ‘WE’ heading ?

“Colours“, symbolises joy . We feel so happy when we see different colours (red, yellow, brown , black). Obviously who doesn’t like colour ,right ? But it feels so ironical that when this same colour is used to denote skin colour, we start prejudicing. Then in that particular case , every Indian wants ‘whiteness‘ . (No doubt the beauty cream companies spend shellings on uplifting this prejuduce ‘Fair & lovely’ ; only if you are fair , you are lovely !!)

In fact, the harsh truth is ‘Having a brown or black complexion in India is a curse now’ . We Indians have gone so deeply in love with this ‘White‘ blinded mentality that we have turned intolerant towards any other skin colour. People don’t realize but it’s so damn true. I don’t need to prove this anyway, though to put some data on table just read recent news on attacks on African students in Delhi -NCR. Not to mention , the way we see and treat our own fellow citizens from North East , bullying & insulting them by calling ‘chinese‘ & ‘chinkys‘ .

And not just that , we discriminate even between north and south indians on basis of their colour ofcourse , taking no note of how good they are in person . Particularly, these north- eastern brothers are highly talented guys ,still they are being ashmed by us so called ‘Proud Indians‘.

 To bring to light , Indians have inherited this ‘White‘ superiority mentality from the 200 years long British rule . Britishers were very much successful in implanting the “White Man Burden” philosophy (‘blacks’ are burden to be born by ‘whites’)inside Indian culture which still has it’s vicious effect. Talking about one of the many recent cases of mob  violence  against Africans , may be if those three african students have been ‘Fair skinned‘ , they wouldnt have suffered the brutality for false drug peddling suspicion . But unfortunately they were wearing the WRONG colour. 

Based on that study, Washington Post released a “fascinating map of the world’s most and least racially tolerant countries,” a nifty infographic that paints the world in hues ranging from deep blue tolerant to a dark red racist. 
In the map, India was coloured in crimson, symbolizing “most racist”.

This Zero tolerance policy of us is putting all shorts of hardships and vicious race crime against Africans . 

This vicious race crime is a clear sign of terrible ignorance, arrogance and the recycling of old tropes of Africans as“
uncivilised”. Indians,with their preference for “whiteness”and their total lack of information and exposure to Africa’s rich cultural heritage and its contemporary politics, have denied Africans in India their basic humanity which is demonstrated in their accusations of“cannibalism”—the ultimate denouncement of the“in human other”

Nana Peasah, a Ghanaian student, has returned recently to Accra after studying at the University of Mysore for two years. He was the international students’ co-coordinator at the university in 2015-16. He sought to learn about India and joined the Rotary Club East of Mysore. While Mr. Peasah had a lot of foreign student friends from around the world, it was harder to make friends with Indian students. To make friends with women students was almost impossible, as Indian men were quick to accuse Africans of making advances at ‘their’ women even if they were merely studying together.

What people  don’t see here is that Indian students have an opportunity to meet African students and learn about a part of the world of which they know little. 

And what seems more hypocritical is when Indians raise voices against racial crimes  suffered by Indian students in other countries like Australia . 
……. A ray of Hope 
 
In the backdrop of all those prejudice thinking , racial absuses, assaults, there is still a hope for a new Dawn. 

Arrest of people who incited the attacks on Africans will not solve the problem. These are only temporary measures. Another attack can happen anytime in a matter of days or weeks . Social diseases like ‘Racism‘ can only be cured by treating  ‘ignorance‘ with the light of understanding about different cultures. What we need to accept is ‘ We all are one big family  & every big family has differences  ‘ .  We need to look above this “white“ complexion blinded mentality  & see every individual on equal platform of humanism. 

~~~ Special thanks to Anubhav Dey & Shruti Bajaj for helping me in pening down & editing this blog .~~~

Indian men are more open to women working – even more open than Indian women

It often crosses my ears that “we live in a male dominated society where major stereotyping such as gender work division still exist”.  No doubt one can’t deny this fact. But what’s actual say of people around the globe regarding working women, specially of indians is pretty much ironical in its own way .

So what do men and women think about the idea of women working in paid jobs?

According to the recent survey conducted by ILO, 70% of women across the world would prefer to work in a paid job. Close on their heels, 66% of men also want women in their families to get paid jobs.

In India, however, the gender gap seems to be wider, and reversed: a larger number of Indian men – 65% – want women in their families to work paid jobs, and just 52% of Indian women want such jobs for themselves.

Doesn’t it sound ironical in Indian context ? 

The report also establishes that in general, global attitudes towards women working are positive. For instance, globally, the number of women and men who prefer women to be working in paid jobs is more than twice the number of people who prefer women to stay at home.  However, the reality on the ground is different from people’s perception, where women are still heavily under-represented in the workforce.

Younger men and women in India are more open to the idea of women working than those in an older age group. Among those in the 15-29 age group, 57% women and 70% men would prefer women to work in some kind of paid job, while 37% women and 24% men would prefer that women stay at home. Here again men perception going far ahead than women.

Family acceptance & work- family balance 

Globally, 83% women and 77% men said that it is acceptable for women in their families to work outside. 

However in India, once again, men responded more positively than women: 71% Indian men said that their families find it acceptable for women to work outside, as against 69% Indian women.

Also just alike in majority of countries, in India,  “work-family balance” emerged as the topmost challenge for working women, followed by the “lack of flexible work hours. May be this is the reason behind such gap in  perception among Indian male and female & even more important, behind fall in female participation of labour force from over 35% in 2004 to just 25% in 2011 ( ILO ).

THOUGHT FOR FOOD :  

 In India, “Need is the basic DRIVER of ACTIONS”. If women feel their family or husband’s earning is enough to have a standard living, majority of women will not opt to paid job .

Acknowledgment
International Labour Organisation- Gallup report titled “Towards a Better Future for Women and Work: Voices of Women and Men”.

Equity/stocks- ‘Not my cup of tea!’ Or is it ?

 Everytime I  used to read about the terms like Equity trading / speculative trading, shares/stocks, bonds/mutual funds, bull/bear I felt like ‘I’m interested but it’s not my cup of tea’. And I’m sure majority of Indians can relate to this thought too. So the obvious question that arises is – why? Why we Indians, inspite of having a world-class financial infrastructure & having one of the world’s highest household saving at 30%, still play in shallow waters when we can play in the deep oceans. 

One can get varies answers to this obvious question :

• Lack of proper knowledge of stock market
• Lack of large amount of money
• Fear of taking Risk, & of course
• Major stereotyping that those who play in stocks are Genius! 

However, if we put our emotions aside  for a moment & think rationally then we can clearly see through that all these reasons are negligible . Let me show this through some facts.

In this globalized world, not having knowledge of anything is pretty much more sort of a excuse. Knowledge of financial markets (no matter how big it sounds) can be easily acquired through reading/watching financial news and various books on investing. Also starting a paper trading account before using actual money  is a good move. I would recommend reading the Intelligent Investor by Benjamin Graham.  We can also easily find a platform for paper trading by googling it. I used OptionsHouse and made a 54% return my first year, so that really got me excited to start with real money.

The next presumption is need of large crunch of funds. Well certainly there is no minimum limit to what amount one can invest. We can even buy share of some firms say of $1. But the only catch here is the brokerage charge. We need to pay brokerage charge on each single transaction. So if we invest very little amount say as less as $1, then most probably we will end up in paying more then you get the profit from share speculations. So anything between  3k-4k is a good amount to start. Also it is better to invest in blue chip stock with price range RS 4OO to Rs 480 per stock and sell at 10% profit within 3 months.

Now if you thinks share market is ‘only the genius’ play‘, then plz help yourself to so many live examples online depicting laymen turning into big bulls. See there is one very basic rule that all these successful traders followed : ‘Research, stay update, make your trading plan, & never let your emotions (Fear & Greed) drive your actions‘.

Bottom line is –‘It doesn’t take Einstein or Bill Gates to start investing. What it all takes is your interest and consistent effort‘.

Happy Trading 🙂

‘Brexit’ sets off a cascade of aftershocks

 

Pic courtesy: abibitumikasa.com

On 24 June,2016 Britishers woke up in a new country. The Britain that existed till 23 June was not in existence anymore.

For all those who ran the Leave campaign & those who supported brexit, it was a day to celebrate. For them the  day is marked as the independence day. But for the other 48% who voted to remain in the European Union, & for the majority of people around the globe, the news came in a way that sink the heart. It’s most unhappening for the people of Scotland. All major political party collectively voted to remain in the EU; but, being a part of United Kingdom, they were dragged forcefully out of EU, against their collective will. This yet heightened the possibility of Scotland to be separated from Kingdom & be the guardian of their own destiny.

Brexit even resurfaced the rift between the old & the young, the rich & the working class, and obviously between Scotland & England.

Brexit, probably the most important news in the decade, brought a cascade of aftershocks as were being feared about. Apart from the fear of division of United kingdom, there is a constant risk of economic turmoil. Britain losing the AAA credit rating and falling of euro, certainly backens the fear. Moreover, the decisive win of the Leave campaign certainly costed high for prime minister David Cameron, who had to resign, putting a big question mark on his political career too. 

Britain, no doubt, got certain advantages through its decision of leaving the EU, but the cost it paid & most probably has to pay in near future mocks the ‘freedom’.

1. The UK loses influence over EU regulations without gaining much freedom to regulate independently
2. The UK is less attractive  as a gateway to Europe, as a base for corporate HQs & as a location for investment from Europe
3. The Brexit victory sent economic shockwaves through global markets & Britain lost its top AAA credit ratings.
4. Immigration is tightened, damaging competitiveness, particularly London, but now can make their own regulations regarding the same
5. Regulatory divergence grows over time increasing the cost of trade, impacting on volume & the UK place in supply chains
6. The UK gains flexibility over industrial policy, but loses the benefit from scale & influence in some areas
7. The UK loses the benefit from being able to influence both in & through EU, impacting on economic & foreign policy interests.

 

 

Hidden indoor factors underlying Greek crisis

Greek  government has  a long  history  of problems  with  its  public  debt—it has  spent  more than half  the years  since 1832, when  it gained independence  from  the Ottoman Empire, in default. Deep analysis on Greek history point to several deeply  entrenched  features of  the Greek  economy  and Greek society  in general  that have  prevented sustained economic growth and created  the  conditions underlying  the current  crisis. Chief among these are :

1.   State ownership of majority of resources  – As recently  as  1990,  the Greek state controlled about 75% of  all  business assets in  the country and  tightly regulated other sectors of  the economy.  The state reduced its stake to  about 50%  by  2008; however, according to the report of OECD , much of  the  private  sector  continues to  “suffer from  weighty  and  complex  regulations  and from  the  lack  of  a  coherent  and systematic  approach  to  rule-making.”
2. Hefty public expenditure – In  the  decade  before  the  crisis, a  significant  portion  of  rising  government  expenditures  was  allocated to  rising  public sector  wages and  benefits.  As  recently  as  2009,  Greek  government  expenditures  accounted  for  50%  of  GDP,  with 75% of  (non-interest)  public  spending  going  to  public  sector  wages  and  social  benefits.  However, there was no critical evidence for ‘improvemnet in quality of services’.
3. Political stereotyping –    Greek  politicians  have  traditionally  viewed  the  provision  of  public  sector  jobs  and benefits  as  an  important  way to  grant  favors  and  thereby secure  electoral  support.
4. Tax evasion & Political clientelism-  Clientelism may also  be  an  important  factor  behind  pervasive  tax evasion and  a  complex tax code  that  grants exemptions  to  numerous  professions and income brackets.  According to  Greek government  officials,  until  the debt crisis, the  state  taxed only  one-third of  officially  declared  income, at  an  average  rate  of  about  30%.  This  excludes profits  from  an  unrecorded  economy  that  some  value  at  upwards  of  30%  of the  official GDP.
5. Widespread corruption –     According to 2010 Corruption Perceptions Index,  Transparency  International  ranked  Greece  as the  most  corrupt  country  in  the  EU,  just  behind  Bulgaria  and  Romania.