The Great Resignation, the pandemic’s false economic theory that workers in America were leaving their jobs in great numbers, turned out to be something close to a great hoax. While it is true that many workers on the front lines of demanding service industries such as restaurants and retail are resigning, and that these industries are facing labor shortages, it turns out that many of these workers are upskilling. and moving towards better jobs in – Tech Firms or Logistics. Others are taking advantage of the labor shortage to change jobs while in the same industry.
In an article in The New York Times, Paul Krugman credits Arindrajit Dubey, a labor economist at the University of Massachusetts, with drawing attention to the trend, which Dube calls the “Great Shuffle”. Krugman pointed out that the labor participation rate for Americans between 25 and 54 has increased recently, but also that many workers have started their own businesses, possibly fueled by generous income support in the US during the pandemic. The US reached pre-pandemic levels of employment last year, marking a rebound that has taken the past five years after a more typical recession.
All this suggests that the Biden administration’s bold use of “heating the economy,” that is, raising wages at the bottom of the pyramid by allowing the economy to grow faster, can be considered at least a mixed success. Of course, there’s a very high risk that the high US inflation and high interest rates of the past several months are eating into these earnings gains. The ‘running hot’ idea has also been undermined by the supply chain disruptions related to Covid, which is set to worsen as well. Beijing wrestles with Omicron as China rolls out lockdown.
But, this weekend, The Wall Street Journal reported a surprising development that corroborated Dubey’s thesis of job shuffling: “In low-paying roles in warehouses, manufacturing, hospitality and other hourly positions More than a tenth of Americans” changed it. It’s called “blue-collar to new collar”. These new jobs include junior roles in technology, finance, and healthcare, where employers, looking for work shortages, have decided to do away with requirements such as college degrees and train people on the job. In turn, many US workers are using this pandemic to learn new skills through free online courses or paid courses available on Coursera. The Journal’s report documented the transition of a former cable TV salesperson into a job as an associate selling secure access through identity-verification for commercial applications.
As it happens, I’m in the US this week, visiting family and the storm of “Help Wanted” signs outside retailers and restaurants has left me somewhat hopeful about how India’s vast employment The challenges can be mitigated with similar bold initiatives. Intensifying and broadening our negotiations on free trade agreements with institutions like the European Union, especially in labor-intensive industries such as textiles and leather, could create hundreds of thousands of jobs.
As exciting as the prospect of single-country deals announced last week with Australia is, it is difficult to understand what these unilaterally add to the competitiveness of India’s labour-intensive industries, given that there is so much work in low-tech electronics assembly. And auto components are made through complex supply chains that are regional rather than national. Instead, revisiting membership of the Regional Comprehensive Economic Partnership should be a top priority. Turning its back on this, as New Delhi did a few years ago, must be counted as one of the most baffling targets in economic history, especially given that Japan and Australia were determined to That India be involved in that trade deal to balance China’s heaviness.
The only comparable act of willful ignorance on the importance of regional supply chains in global trade is Britain’s exit from the vast market and source of labor that was the European Union. Recently, concerns have arisen in the UK that labor shortages could reduce the size of agricultural industries and lead to higher food inflation. While India’s exports of over $400 billion in 2021-22 guarantee some celebration, that number was fueled by high tradable commodity prices across the globe. Vietnam’s exports grew 19% to $336 billion in 2021 and 14% in the first quarter of this year.
If this weren’t problematic enough that previous Congress-led administrations and the current government have given India a reputation for stubbornness in trade negotiations that have hurt our labor-intensive sectors and resulted in relatively jobless growth, with Australia in the recent past. The clauses in the deal emphasize on storing data in India, our current obsession. As some thoughtful international business writers have observed, this promises to disrupt our rapidly growing information technology services exports. The political leadership of Australia and the UK may focus on such important details for geo-strategic reasons as bolstering the coalition against Beijing, but companies, especially financial firms that outsource work to our IT chiefs, Will probably look for alternatives. The massive size and capabilities of our IT workforce may still win the day, but as Alan Beatty of the Financial Times sarcastically observes, “India is doing India no favors for its highly competitive IT industries by restricting free data flow. The determination of is a miracle of the comparative. Loss.”
As any garment exporter will tell you, when it comes to trade negotiations, India has raised its goals to an Olympian sport.
Rahul Jacob is a Mint columnist and a former foreign correspondent for the Financial Times.