India's job crisis undermines state legitimacy

Unemployment is not merely an economic issue, but a fundamental political challenge that strikes at the heart of how we organise our society

Published in The Hindu

Please see note and job advertisement at the end

Our country's inability to generate quality employment for our burgeoning youth population isn't merely an economic challenge—it's a looming threat to the very legitimacy of the state.

We can quibble over definitions to bend data to our political purpose but the fact remains that we are not producing enough good quality jobs for our people. A good quality job is one which provides dignity, adequate compensation - and opportunity for learning and advancement for those who strive. Instead the jobs we are producing are unpaid, own-account, informal and dead-end. Worse, our seemingly low unemployment rate masks the fact that to count as employed, one needs to have reported working for only one month in an entire year. 

As home to the world's largest youth population, India faces a critical challenge. The failure to mainstream our young people economically and socially will inevitably breed frustration and dissent. 

The political problem at hand is twofold: how do we give people a sense of dignity and purpose, and the means to support themselves financially? Traditionally, people have derived dignity and purpose through a combination of community, work, and political engagement. However, the package deal of liberalism and capitalism has deprioritised traditional sources of community and increased the importance of work in conferring social standing and belonging. As a result, work has become the dominant entry point into a broader sense of community and political engagement. 

While the elite find purpose and status through their control over societal discourse and decision-making — which also bring them substantial financial rewards—large sections of our population feel they lack both dignity and financial security. This disparity is likely to worsen as technological advancements and capital concentration potentially displace large numbers of workers, perhaps permanently. In a large democracy like India, such concentration of purpose and financial gain among the elites can erode faith in the system and lead to political instability.

This challenge—how we structure our society, what we value, and how we include everyone—is fundamentally political. Yet, the political response has been inadequate, oscillating between deferring to market forces and resorting to short-term partisanship. The market-oriented approach is reflected in the superficial mantra of "creative destruction," suggesting that old jobs and industries will be seamlessly replaced by new and better ones. Meanwhile, some politicians and capitalists have mooted universal basic income (UBI) as a solution - a minimum “income” received by all citizens of a given population as financial transfers from the government without having to work.

Setting aside the question of UBI's financial feasibility, it's important to recognize that inequality and an assault on human dignity are inherent in the very concept. UBI implies that a significant portion of the population is no longer needed in the economy, with a smaller subset "paying" for the rest. Its very premise concedes that technology and capital will create outsized winners while the majority will merely survive on their largesse. This approach fails to address people's need to feel relevant and capable, and ignores the loss of dignity that comes from not contributing meaningfully to society. It does not, thus, account for the possibility that UBI might encourage more anger - and populism - because people want to contribute and thrive, not just survive on the sidelines. 

There's a risk to democracy as a whole as well. UBI would shift focus from structural reforms to mere economic transfers and thus entrench elite power by insulating them from pressures to address fundamental inequities in the economy and labor markets. It risks recasting the state as a mere distributor of funds rather than the architect and arbitrator of societal processes required to create a just and participatory social and economic system. 

The partisan response has been to lob the issue back and forth between parties for short-term electoral gains instead of responding to the ongoing structural transformation of our society. Some political leaders are indeed mindful of the long-term but institutionally, parties have become too narrowly scoped to address larger questions such as unemployment and have reduced their ambitions to winning elections alone. However, divesting societal issues to civil society or government to function solely as election-winning machines jeopardizes their long-term legitimacy. This is because democracy is about more than elections—it’s about creating a social contract that works for everyone.

In fact, the failure to anticipate and address long-term structural issues is a key reason why people feel neglected by the political class and view politics as a cynical game. When people believe the political system is incapable of addressing pressing challenges, they lose faith in democratic institutions. Thus parties and institutions must find ways to address structural issues like unemployment, inequality, and dignity lest people seek alternatives and render political parties irrelevant. We're already seeing glimpses through the global rise of populism, authoritarianism, and civic disengagement.

Unemployment is not merely an economic issue, but a fundamental political challenge that strikes at the heart of how we organize our societies. Political parties must provide meaningful leadership by addressing the structural issues head-on without resorting to deflection or partisanship. The future of Indian democracy - and indeed, the continued relevance of our political institutions - hinges on our ability to restore a broader sense of public purpose and economic participation to the center of our national dialogue. 

Note: The Future of India Foundation is anchoring an initiative to harness the political process to create aspirational employment opportunities for youth at the district level. Please get in touch to learn more and/or contribute. All contributions are exempt under 80G

Job Advertisement: Employment and Skilling Public Policy Researchers

We are hiring public policy researchers to work on employment and skilling initiatives. This is a non-academic role focused on tracking employment trends, evaluating government programs, and supporting pilot projects in select districts. Key tasks include producing policy briefs, managing social media, and engaging with public representatives like MPs and DMs.

Ideal candidates should have 2+ years of experience in public policy or development economics, strong communication skills, and the ability to work independently. Remote work possible for highly motivated candidates; travel required for on-ground research.

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