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THE 2024 upheaval that toppled Sheikh Hasina’s government in Bangladesh, alongside the youth-led protests over joblessness in India, point to a shared crisis across South Asia: strong economic growth has not translated into enough good jobs for a workforce that is more educated than ever before. As access to schooling and universities has expanded, so have people’s employment expectations — expectations that a narrow job market has failed to meet, sparking widespread anger. In India, nearly 40 per cent of graduates under 25 can’t find work; youth joblessness is near 29pc. Roughly four in five Indian workers depend on informal, insecure employment.
Economic theory holds that growth happens as workers shift from low-output farming to more productive factory and service jobs, and that this shift should expand labour demand and shrink joblessness. But India, Bangladesh and Pakistan complicate that story. India and Bangladesh have sustained 6-7pc annual growth for over three decades; Pakistan has managed only 3-4pc. Yet, none of the three has generated sufficient formal, productive work. Growth rate alone doesn’t explain the shortfall.
Data from the Centre for the Study of Developing Societies show Indian employment expanding just 1.6pc a year from 2000 to 2012, then flat-lining from 2012 to 2019 even as GDP kept climbing. The type of growth a country experiences, not merely its speed, appears to shape how many jobs it creates. India’s economic transformation makes the point vividly. Agriculture accounted for 35pc of GDP in 1990, absorbing 63pc of the workforce; by 2025, its GDP share had dropped to 16pc, yet it still employed about 42pc of workers. Agricultural productivity relative to the rest of the economy fell from 0.54 to 0.40 over this period, a sign of chronic underemployment and surplus labour stuck on the farm. Meanwhile, economy-wide productivity nearly quadrupled, ie, rising incomes came mostly from efficiency gains in industry and modern services, not new job creation. Workers haven’t left agriculture at the rate that genuine structural change requires. The outcome is reflected in living standards: CLSA data put average urban household income at around $20,000, and just $3,600 in rural areas.
