‘They have failed me’: In UP, increasing unemployment, reduced pay for skilled workers may hurt BJP

As Ram Baran’s phone rang loudly, the ringtone went like this: “Beloved Ram we will come, build the temple there.” It was a reference to the Hindutva project – supported by the ruling Bharatiya Janata Party – of building a Ram temple at the site of the demolished Babri mosque.

Wearing a striped sweater and a muffler wrapped around his head, Baran, 48, explained why, despite being a staunch supporter of Prime Minister Narendra Modi, he was disappointed with the BJP-run central government’s inability to provide jobs.

“They have failed me,” said the illiterate daily wage worker. With a lunch box wrapped in cloth, he travels 9 km one way, changing two buses, until he reaches Lucknow’s largest labour hub, the Chinhat industrial area, where he waits every day for a temporary job. The one-way journey costs him Rs 22.

This has been Baran’s routine for two years after he was fired from an electric rickshaw factory called Srivastava Automobiles, one of many small-scale companies that either laid off employees or shut down after Modi’s November 2016 decision to withdraw 86% of India’s currency, by value.

“I was paid Rs 12,000 per month for the job, but post demonetisation, sahib asked me to leave,” said Baran. “He is a good man and did not want us to leave, but he did not have any money to pay his workers.”

Baran was one of around 3,000 labourers who mourned the loss of financial stability after demonetisation at the Chinhat industrial area in the capital of India’s most populous and politically important state, Uttar Pradesh. While most labourers at Chinhat were from Lucknow, others had come from adjoining districts like Sitapur, Hardoi, Rae Bareli and Barabanki in search of jobs.

Some workers – among them graduates, engineers and post graduates – were dressed in torn garments, others wore a mix of worn blazers and lungis. Most held a bidi in one hand and held a small lunch box in the other. Several women joined the throng, dressed in colourful sarees with a loose shirt on top and a child slung over their shoulders.

Of nearly 400,000 labourers across Lucknow’s labour hubs, only an estimated 40% find work today, said Ashish Awasthi, a labour rights activist.

Pandit Sunil Bharala, chairman of the state’s labour department, denied there was a jobs shortage in Uttar Pradesh. “There is nothing,” he said, referring to an increase in unemployment. He refused further comment on the subject.

This is the sixth in an 11-part series reported from nationwide labour hubs – places where unskilled and semi-skilled workers gather to seek contract jobs – to track employment in India’s informal sector. You can read the first part here, second here, third here, fourth here and fifth here.

This sector, which absorbs the country’s mass of illiterate, semi-educated and qualified-but-unemployed people, employs 92% of India’s workforce, according to a 2016 International Labour Organisation study that used government data.

As India begins voting for the 2019 general elections, this series provides a reported perspective to ongoing national controversies over job losses after demonetisation and the new Goods and Services Tax regime, by delving into the lives and hopes of informal workers.

The number of jobs in India declined by a third over four years to 2018, according to a survey by the All India Manufacturers’ Organisation, which polled 34,700 of its 3 lakh member-units. In 2018 alone, 11 million jobs were lost, mostly in the unorganised rural sector, according to data from the Centre for Monitoring Indian Economy, a consultancy.

Baran was trained in various industrial jobs, such as lifting large metal sheets with forklifts. “Despite work experience of 15 years in the automobile sector in Lucknow and Kanpur, no one wants me,” he said.

Baran now accepts whatever comes his way, from loading goods to simple, cleaning work. Sometimes, he works at construction sites.

On average, Baran finds work for two weeks every month at Rs 300 per day. His monthly income has dropped by half since demonetisation, to between Rs 6,000 and Rs 8,000.

More youth, fewer jobs

Home to 200 million people, Uttar Pradesh is India’s second-poorest state by per capita income. It ranks 29 of 35 states by literacy, according to Census 2011, but because of its size, it has more illiterates than any other states. Coupled with the fact that it has India’s largest youth population (15-24 years), more than 40 million as of 2011, the state – with an economy half as large as Hong Kong’s , which is smaller than many Uttar Pradesh districts – requires millions more jobs.

Instead, demonetisation ended an uncounted number of jobs and made existing ones less remunerative, as Baran’s experience showed. Now, as the 2019 elections unfolds, Uttar Pradesh’s unemployment problem is likely, said experts, to be reflected in reduced support for the BJP, which won 71 of 80 Uttar Pradesh Lok Sabha seats in 2014. Its ally, the Apna Dal had won two seats.

Rudra Pratap Dubey, a Lucknow-based political expert, estimated that every second youth in the 15-24 age group is unemployed in the state. PhD holders, doctors and engineers routinely apply for positions as peons and sweepers. To address widening unemployment, the state government launched two programmes, Start UP India and Stand UP India, but there has been little effect.

While the youth are enthused about Modi for his muscular nationalism – embodied by an air strike against Pakistan, they still do not have jobs, said Dubey, The middle class – in particular, the lower middle class – is “highly upset” with the BJP, he added, predicting a fall in the party’s vote share in upcoming elections.

“There is a chance that the BJP may get votes from the youth,” said Dubey. “But their parents may not vote or support the BJP.”

Whoever wins Uttar Pradesh will have to deal with an ever-growing population of youth looking for jobs. The state’s fertility rate is 2.7 children per woman – above the national average and the replacement rate of 2.2 – its “demographic window of opportunity” is “fully open” and will continue until 2061, according to a 2018 United Nations Population Fund report.

Like five other poor states (Jharkhand, Bihar, Chhattisgarh, Madhya Pradesh and Rajasthan) Uttar Pradesh has a potentially large demographic dividend – the economic growth that accrues from a large working-age population – but this can be easily squandered without adequate education and employment.

Broken promises and dreams

In 2017, the BJP stormed to power in the Uttar Pradesh Assembly elections, despite the lack of a chief ministerial candidate. By riding on Modi’s popularity and promising jobs to youth within 90 days of coming to power, farm-loan waivers, free education for girls and an end to corruption, among others, the BJP won 325 seats of 403.

That victory came at a time when the state’s unemployment rate was 13.25%, on average, between January 2016 and 2017, according to Centre for Monitoring Indian Economy data, registering a high of 18% by June 2016, five months before demonetisation.

This high rate was the culmination of widespread problems that companies faced in renewing leases to industrial land or buying new plots, which resulted in several moving to Uttarakhand or West Bengal, said Neeraj Shukla, an assistant professor and economist at Lucknow’s Khwaja Moinuddin Chisti University.

But employment data in Uttar Pradesh are contradictory and possibly reflect the difficulty in gathering such data, said deputy chief minister Dinesh Sharma. The state government has provided jobs to 1.5 million under various programmes over the last two years, said Sharma, who also added that data gathering “is not yet completed”. There “should be no doubt” that jobs are being generated and the state government is “doing its best”.

Between January 2017 and July 2018, the unemployment rate fell to an average of 3.9% over 19 months. In August 2018, Swami Prasad Maurya, state labour and unemployment minister, told the state legislative council that more than 2.1 million youth were registered as unemployed in Uttar Pradesh. The actual number, he said, was not known.

The state’s employment data may be suspect, but the loss of opportunities is evident and now an issue for the BJP’s supporters, such as Baran.

Baran said he voted for the BJP in 2014 because of their promise to construct a Ram temple. When demonetisation came along, he was impressed by the logic offered by Modi – that it was a strike against unaccounted money and terrorism–but he did not realise it would affect his life.

“I do not know the long-term impact of these reforms [demonetisation], all I know is that my family has suffered due to my unemployment and low wages,” he said, emphasising he would vote for a party that guarantees jobs, although he did not specify which. This sentiment was echoed by several others at Chinhat.

Mukesh Yadav, 28, a daily wage labourer from Barabanki district, said he rebelled against family political loyalties with the Samajwadi Party to vote for Modi in 2017. That led to a fall-out with his father, who called his son’s vote a “breach of trust”.

Yadav said he voted for Modi and the BJP based on their promises of constructing a Ram temple and providing Rs 15 lakh to each citizen.

That faith has now faltered.

“I never knew all the promises made by them were nothing more than jumlas [rackets],” said Yadav, describing how his wages had fallen more than 33% to Rs 9,000 since demonetisation. “I will now vote for Akhilesh Yadav [leader of the Samajwadi Party]. I am never going to fall for any poll promises.”

Baran has a wife and two teenage children. As the only earning member in the family, he struggles to afford three meals every day, with a quarter of his monthly wages spent on a monthly rent of Rs 2,000.

“If I am not able to feed my family and provide them with better living, what is the use of this government?” asked Baran. After completing their Class 12, Baran’s teenagers will start looking for jobs and–hopefully – boost their household income. “I always dreamed of my kids becoming engineers, but that seems impossible.”

Demonetisation devastation

Demonetisation and the goods and services tax, widely criticised for its hasty, often chaotic implementation – crippled many industries, from real estate to automobiles, said DS Verma, executive director of Indian Industries Association in Lucknow.

The subsequent cash crunch left industrialists struggling to pay suppliers, buy raw materials and pay daily wage labourers, said Verma.

Pradeep Kumar Srivastava, 47, was one of them. The owner of Srivastava Automobiles and Baran’s former employer, Srivastava said he had to let most of his employees go as he was left with no cash to run his operations.

“My production was hit due to the demonetisation drive,” he said, with anger. Before demonetisation, Srivastava employed seven permanent and four temporary workers at Rs 12,000 a month; today he has just three, who he pays Rs 7,000 a month, struggling to do so. He outsources most of his work to reduce costs.

After a loss of almost Rs 2 lakh, Srivastava, the only breadwinner in his family, said his business had not recovered. “Losing skilled labourers is a big loss,” he said. Before demonetisation he could manufacture more than 10 e-rickshaws a month. That is now down to seven or less.

The Chinhat labour hub is close to an industrial area created by the Uttar Pradesh government. Employers and contractors from the automobile and real-estate industries come here to hire skilled and unskilled labour. While a skilled worker today gets Rs 400-450 for a day’s work, down from Rs 500 before demonetisation, an unskilled worker gets paid Rs 250 to Rs 300, down from Rs 350 or more for eight hours.

Tata Motors, one of the largest industries in Uttar Pradesh, and 193 industries are registered in Lucknow, according to the Uttar Pradesh State Industrial Development Corporation. Many have stopped operations.

Small and large ancillary industries, such as those that produce fuel tanks and stainless steel parts, build chassis for trucks and buses and manufacture battery clamps have shut down. These industries hired unskilled labourers for a variety of jobs, including cleaning machinery and loading goods.

But having skills does not necessarily improve job prospects.

Skilled workers, contractors hit

With jobs hard to come by, commerce graduate and mason Sujeet Kumar Rawat, 28, said he found “no use” for his skills.

“What is the use of skills when you are underpaid?” said Rawat, who waited for a job at Chinhat. The average daily wage of a mason was about Rs 600 before demonetisation, while an unskilled worker earned about Rs 350. Today, masons earn between Rs 350 to Rs 400, he said.

Since wages of both skilled and unskilled workers are “the price of peanuts”, competition is stiff. “It is becoming hard, very hard to survive,” said Rawat.

Since 2004, Rawat is the sole breadwinner for his family, a wife and a son. He has been travelling 14 km both ways to the Chinhat labour hub on a motorcycle gifted by his father-in-law. His average monthly income is down from Rs 9,000 before demonetisation to Rs 6,000-Rs 7,000 for 15-18 days of work.

A senior mason taught him to build industrial furnaces, but those skills are rarely used, said Rawat. “In the last two years I think I have constructed only two furnaces, while earlier, I would construct at least one furnace a month,” he said. “Now I construct houses and I am not paid according to my skills.”

It does not help that industries use middlemen.

Arvind Kumar Shukla, a labour contractor at Chinhat – who charges a 10% commission for finding a job – said industries prefer using a contractor to hire labour because they can cut expenses, such as bonus and insurance: should a worker demand extras or increased wages, contractors are ready to supply a replacement.

Yet, even Arvind Shukla has suffered from the recent downturn.

Turning the pages of his register, he said from between Rs 30,000 and Rs 40,000, his earnings have fallen to between Rs 22,000 and Rs 25,000.

The number of labourers looking for work has increased, and industries that use labour contractors pay an average of Rs 220 per day – 62% lower than the regular rate of Rs 350. Some desperate workers even agree to work at Rs 150 a day.

Government programmes to help informal-sector workers are mostly ineffective.

State schemes on paper

Workers registered with the government are eligible for various welfare schemes, such as housing assistance for construction workers, marriage grants for daughters of workers, skill development, pension and national health insurance, according to the Building and Other Construction Workers board.

Worker registrations rose after demonetisation, according to the Building and Other Construction Workers, from 685,652 in 2016-’17 to 781,640 in 2017-’18.

As many as 16,241 labourers were trained under the Kaushal Vikas Mission (Skill India Mission) since 2014, according to the Uttar Pradesh labour department. In 2017-’18, 7,029 workers were trained, the highest so far. That is far from adequate, given the millions in search of skills and jobs.

“Many a time, people who are graduates, engineers and even post-graduates come to us for jobs,” said Arvind Shukla, the labour contractor. “Most of the labourers with me at Chinhat industrial area are high school or intermediate pass.”

“There are more than 100 polytechnics in Uttar Pradesh alone, and they produce thousands of skilled people every year, but hardly 50% of them get jobs,” said Awasthi, the labour activist. “There is no social security in private jobs, and this is going to be a very serious problem in the time to come.”

The labour department’s Bharala said skilled labour demands higher wages, which industries are reluctant to pay. So, unskilled labourers with minimal training are used and paid less than the standard wage. “To deal with this problem, the department is contemplating increasing its training programmes,” said Bharala. “If there is a large number of skilled labourers, then we think this problem will end.”

Uttar Pradesh’s employment problem does not have easy solutions.

There is a “mismatch in the demand and supply of education and skills” that translates into unemployment, said a 2017 International Labour Organisation report. Though there is a shortage of skilled labour, workers are often not trained in different skills primarily due to lack of education and awareness about opportunities. The high rate of unemployment among educated youth, said the report, was a “matter of concern”.

This is the sixth of 11 reports. The previous stories were reported from: Indore, Jaipur, Perumbavoor, Ahmedabad and Kolkata.

This article first appeared on IndiaSpend, a data-driven and public-interest journalism non-profit.