Karnataka quota talk: 100% reservations for blue-collar jobs is ruinous

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Published: December 23, 2016 6:20:36 AM

The Karnataka government's decision to reserve all blue-collar jobs in all industries receiving concessions from the government—except IT and biotech (BT)—for Kannadigas puts it on a slippery slope.

jobs re 660While the policy is itself problematic, it is also a symptom of a larger malaise. (Source: Reuters)

The Karnataka government’s decision to reserve all blue-collar jobs in all industries receiving concessions from the government—except IT and biotech (BT)—for Kannadigas puts it on a slippery slope. First, it sets a dangerous precedence of government-mandated reservation in the private sector. It would seem that with the flagship IT-BT industries exempt, the impact may not be too significant. But both traditional sectors like construction, logistics, etc, and start-ups in the e-tail space—both Amazon and Flipkart have warehouses in the state—that generate significant numbers of blue-collar jobs will be constrained in their recruitment, given they stand to lose the concessions if they don’t comply. Once it is enforced, there is no stopping other states from coming up with similar populist policies, even for white-collar jobs where merit is paramount for productivity. Second, with the migrant blue-collar labour out of the picture, wages are likely to get uncompetitive. This could mean greater informalisation of labour, which in turn means greater insecurity for the same workers whose interests the Karnataka government is purportedly protecting with the move. Third, the amendment, if adopted, will violate the landmark Indra Sawhney judgment of the Supreme Court which caps reservation “of any manner” at 50%.

While the policy is itself problematic, it is also a symptom of a larger malaise. With not enough jobs being created—it is the lowest in seven years—and the poor spread of those that are getting created, the pressure on, and in, relatively better-performing states is growing. Thus, with a significant number of blue-collar workers from, say, Bihar in the fray for real-estate or warehouse-operations work in Bangalore, Kannadiga workers of comparable capability find the competition getting much tougher. With increasing adoption of automation and robotics, the requirement for human labour is likely to fall further, leading to much lesser jobs than now. But when governments choose populist policy stances like Karnataka’s over giving employment generation and growth a fillip, and pushing skills development rigorously, the poor outlook on jobs only gets worse.

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