The perfect time for India to cash in on the global labor crisis
It is high time for India to address unemployment issues as a priority, taking advantage of the current global labor crisis. Almost all major developed countries have been reeling from the acute labor shortage since the start of the pandemic, receiving a government allowance and unwilling to return to work. At the same time, their current workforce is also trending towards ageing. India should see this as a great opportunity to export and deploy its young workforce globally. About 44% of India’s population is between the ages of 18 and 25, the largest young workforce in the world. There are 13 million active job seekers on the Union Ministry of Labor and Employment portal with vacancies at 2.20 lakh in the private and public sectors.
The International Monetary Fund (IMF) has placed India as the fifth fastest growing economy in the world. At the same time, the Indian economy does not create many jobs and therefore does not fully exploit its demographic dividend. Every year, 12 million young people reach the age of employability, which separates India from the United States, Japan and Germany, which have a middle-aged or elderly workforce. and face a serious shortage of young workers. India is the only country where labor supply is growing faster than demand. This growing young workforce can be absorbed globally.
The Indian Economic Monitoring Center (CMIE) reported an unemployment rate of 8.28%. In the case of Punjab, 28% of young people in the age group 20-30 are unemployed. Unemployment in Punjab is predominantly educated in nature, with 61.6% being graduates or above. Nearly a quarter of them have technical or professional training, being graduates, engineers and trained teachers. Declining employment among educated youth is associated with poorer mental health, crime and substance abuse. Considering the extent of unemployment in Punjab and the number of young people migrating in search of employment, there is a golden opportunity for them in the United States, Europe, Canada and other countries. Punjabis are well recognized around the world for their hard work and commitment to work.
It is appreciable that the Aam Aadmi Party (AAP) government has come with assurances of accelerating abundant job opportunities in the state to curb the brain drain from Punjab to foreign shores. However, this is a long-term action plan. In the current scenario, the government of Bhagwant Maan is expected to put in place a fine-tuned strategy to enable its young people to become an active part of the workforce in developed countries. There is a massive shortage of taxi drivers, construction workers, farm workers, IT professionals, cooks, chefs, plumbers, carpenters, health workers, retail, food service managers and supervisors.
HUGE JOB OPPORTUNITIES
The European Commission has predicted 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 shortage of skilled labor could result in $8.452 billion in unrealized annual revenue by 2030, equivalent to the combined GDP of Germany and Japan. The impact of the labor shortage is so significant that the dominance of London as a global financial services hub, the United States as a technology leader and China as a key manufacturing base s crumbles.
The aging workforce in developed countries is trying to advance manufacturing and services using new technologies such as artificial intelligence (AI) and the Internet of Things (IoT) that merge the physical worlds , digital and biological, but this fusion and aging have limits. India is the only country that can expect a surplus of young labor force driven by a booming working-age population.
The United States of America (USA) is facing one of the most alarming labor shortages. That’s partly because America’s population is aging rapidly, with 10,000 baby boomers reaching retirement age every day for the next 19 years. By 2030, the United States could experience $1.748 trillion in unrealized revenue due to labor shortages, equivalent to 6% of its entire economy. The shortage of skilled workers in the United States is expected to reach more than 6.5 million people by 2030. The considerable demand for labor will be driven by the financial and business services sector.
According to the United States Chamber of Commerce, in transportation, health care and social assistance, hospitality and food, manufacturing, wholesale to retail, there are countless job offers. There is a labor shortage of 55% in consumer goods manufacturing, 70% in wholesale and retail trade, 20% in financial services and 35% in leisure and hospitality sector.
The manufacturing industry suffered a major setback after losing around 1.4 million jobs at the start of the pandemic. Since then, the industry has struggled to hire entry-level and skilled workers. According to the United States Bureau of Labor Statistics, approximately 2,31,100 openings for heavy truck and tractor-trailer drivers are expected each year. The American Trucking Association estimates the shortage of more than 80,000 truckers, this figure is expected to reach 1,62,000 by 2030.
The situation is quite alarming in Europe, which faces multiple challenges due to the persistence of the Ukraine-Russia war. It is currently facing an unrealized income of $1.906 billion thanks to a labor shortage of 14.3 million. Europe is set to suffer from severe skills shortages, with EU countries’ unrealized output totaling $1.323 billion by 2030 due to lack of talented labor force, especially in the service sector financial and commercial. This EU-wide problem indicates that the benefits of free movement of labor associated with European Union membership are unlikely to provide a solution to labor shortages. qualified work.
Japan is the third key manufacturing country facing a severe labor shortage. It could struggle to maintain its place in the world’s top manufacturing ranks as it faces immediate labor shortages. Studies reveal that by 2030, Japan will fail to generate $194.61 billion in revenue due to labor shortages. Japan’s low birth rate and tightly restricted immigration contribute to its shrinking labor pool. Participation levels of its population and workforce will drop by the end of the current decade.
Canada is facing a serious labor shortage. There are not enough young workers to replace those over 55. Many of them retired during the pandemic. They receive a government allowance and do not wish to return to work. The construction, manufacturing and transport sectors are struggling to recruit skilled workers, followed closely by hotels, restaurants and bars. The vacancy rate in truck transportation is the second highest vacancy rate in the Canadian economy after the accommodation and food services sector.
GERMANY AND OTHERS
Germany will suffer the next biggest impact after Japan in its unrealized output due to manufacturing labor shortages, with deficits already intensifying. Germany, a leading manufacturing hub, faces a shortage of 2.4 million workers. It is estimated that by 2030, Germany’s unrealized revenue will reach $77.93 billion when the labor shortage reaches 10 million. Among the manufacturing sectors of the top 10 economies, Hong Kong and Singapore will be the hardest hit. By 2030, Hong Kong’s labor shortage will be equivalent to 80%. Singapore could face labor shortages of over 61%. Brazil, the fifth most populous country in the world, is also one of the few countries that will experience labor shortages at all skill levels, resulting in unrealized output equal to 13% of its economy.
THE NEED OF THE HOUR
Central or state government efforts should be intensified to equip our young people with IELTS (International Language Testing System) and school level skills. Standardization and certification of skills courses should be aligned with international professional standards.
The Overseas Employment Division of the Department of External Affairs (MEA) should play a proactive role in ensuring the hassle-free movement of job seekers. This will save them from exploitation and defrauding at the hands of travel and immigration unions. The MEA can coordinate with the MEAs, recruitment agencies and industrial chambers of the respective countries to create a job platform. This platform should not only guide them, but also help them find jobs according to their skills.
If we work with an innovative and inclusive approach, no less than 80 million people will benefit from employment opportunities abroad in a few years.
This will not only ease the pressure created by rising unemployment in the country, but also give a boost to the economy of millions of households. It is simply about seizing the moment and having an interconnected ecosystem to scale up the efforts of young Indians to seize job opportunities globally.
The author is Vice Chairman of Sonalika Group, Vice Chairman (Cabinet Minister), Punjab Economic Policy and Planning Council, Chairman of ASSOCHAM Northern Region Development Council. The opinions expressed are personal.
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