The Kerala Paradox: From High Literacy to High Educated Unemployment
For over a decade, Kerala has distinguished itself from other Indian states on many fronts. It boasts of its religious diversity, its well-performing human capital indices, and its strong and widespread welfare measures. Malayalis, the people of Kerala, have long held a record of voting in the left-parties of the state, and this trend continues to date despite the surging right-wing nationalism ravaging the country. Often dubbed a ‘democratic socialist welfare state,’ left-governance in Kerala is characterised by its modern outlook and embracing of electoral politics. Their strong social welfare focus can be observed in its large historic and present-day investments in education as a proportion of total public expenditure. The most recent budget declared “improving education” as the ruling party, the Left Democratic Front’s, flagship mission. Today, Kerala has 96.2% literacy, the highest in the country, with its least literate district surpassing the national average for literacy rates.
Progressive in its socio-economic policies, yet economically inhibited by its inability to realise the full potential of its workforce, this southern Indian state faces a massive educated unemployment crisis. Kerala holds the record in India for the highest educated unemployment rates, with over one-fourth of the educated rural population and one-fifth of the educated urban populations left unemployed. The existence of a massive educated unemployment problem in this rich pro-social environment is perplexing.
While the state’s education sector can be praised for its wide reach, its reduced focus on job-oriented education and teaching has led to a labour market mismatch. Students actively pursue conventional degrees in arts and science colleges in anticipation of white-collar jobs in the public sector. With the number of such aspirants far exceeding the white-collar public sector job opportunities available, thousands of young, educated Malayalis settle for lower-paying public sector jobs, such as that of a peon or a janitor. Public sector jobs in Kerala, regardless of pay, are coveted positions owing to the job security and social status that come attached to them. Coupled with the hesitancy of the average Malayali to pursue a private-sector job because of wage volatility, and a strong preference for salaried jobs over self-employment, this intertwined education-job market structure has aggravated educated unemployment in Kerala. In this sense, educated individuals are unable to find gainful employment and realise their full economic potential.
Kerala’s growth trajectory in the ’90s, mirroring that of the rest of the country, was characterised by a jump from the primary to the service sector, that boosted economic growth at the cost of employment. Contrary to standard economic theory, Kerala’s manufacturing did not provide the expected impetus to employment and growth. This took place due to the scarcity of land in Kerala, given its narrow, sickle-shape, alongside large government land acquisitions that drove away private-sector investment.
Another constraint on manufacturing, the widespread unionisation of labour, kept manufacturers at bay. This can be seen in the practice of ‘gawking wages,’ or ‘nokku kooli,’ as they are referred to in Malayalam. These are wages demanded by union activists to allow for the unloading of industrial materials at sites that use either machinery or their own labour for unloading. If a manufacturer had materials to be unloaded on-site, even if he was using his own machinery or labour for the same, this practice allowed union ‘onlookers’ to demand exorbitant wages, and refusal to pay these often ended in violence. Especially for politically unaffiliated, smaller-scale, budding industries, this made manufacturing less affordable and riskier. While these wages were banned as late as 2018, this extortion remains unabated owing to tacit political support to the labour unions.
The problem of educated unemployment is in some sense, a test of whether Kerala can survive its own developmental success. Mass emigration to countries with better economic opportunities, especially the Gulf countries, emerged as a solution to educated employment among Malayalis. The ‘Gulf Malayali’ is a stock figure in the cultural fabric of the state and oftentimes were considered highly eligible bachelors. The Kerala-Gulf diaspora, over 2 million in number, was responsible for almost $14–15 billion worth of revenue to the state economy in the form of remittances in 2019. These inflows have positively influenced consumption and savings in the state and have provided a massive impetus to economic growth. The outflow of educated labour has left a labour vacuum in sectors that require less-skilled labour such as coconut harvesting, or construction, which can be seen being filled by labourers from North-Eastern Indian states. This intricate inflow and outflow of labour balance, conceived as a solution to the educated unemployment crisis, has been key to economic growth and development in the state.
In the wake of falling oil prices and termination of foreign working visas under the recent wave of domestication of the Gulf’s labour market, the Malayali’s diaspora dream has been fading. Coinciding with the oil boom in the Gulf, Malayalis saw a massive inflow of remittances in the 1980s. However, the 2013–18 period saw a 300,000 decline in the Kerala-Gulf diaspora, further exacerbated by the pandemic.
State unemployment rates currently stand at a high 26.5% as of May 2020, and what this means for the future of the educated Malayali remains uncertain at this time. The State Budget has made strides forward in revamping the manufacturing sector to make it more appealing to the unemployed and educated youth that desires less arduous labour and better pay, but this remains insufficient. Diversifying manufacturing to be more inclusive of industries that have higher-skilled labour-absorption capacities like shipping and engineering-oriented industries, would be a step in the right direction in alleviating educated unemployment. This comes with its own set of challenges, however, as it would require large-scale political mobilisation and deep-rooted structural change.
While there is an extensive investment in education, efforts need to be re-focused to better match education levels and jobs. Complemented by an awareness of labour-market opportunities and benefits, especially in the private sector, such measures could greatly help the educated, lower-income population be gainfully employed.
The question remains whether returning educated labour will be absorbed into the expanded and reformed secondary and tertiary sectors, or whether they will settle for lower-skill, lower-pay work, displacing migrant labour forces. The upcoming Legislative Assembly elections in April 2021 are crucial, as the future of this educated unemployment issue depends on the political leadership of the state financially, socially, and culturally. To this extent, adaptability and responsiveness are key.
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Sources to my article can be found on my Author page, labelled “Article References”
