Paper leaks are the symptom, the jobs gold rush is the disease

Last year, large crowds gathered to dig up farmland around Asirgarh Fort in MP. They were looking for buried Mughal-era gold coins, inspired by the film Chhaava. Today, there’s another viral movement, one that has led to an agitation against NEET exam paper leaks. Its participants have, with adequate irony, embraced the description of unemployed youth made by CJI Surya Kant in May as "cockroach".

These two events seem disconnected. But they are not.

A labour market generally has an in-built regulator that drives towards pay parity between comparable professions. If accountants are making much more money than lawyers, there will be a surge in demand for accountancy courses, and enrolment in law schools will drop. That supply shift will reduce the pay gap over time.


This logic fails in a gold rush.

Gold prices are determined in a vast international market, and don’t respond to discovery of local deposits. As a result, hunt for gold is oversubscribed. A few people strike it and become rich, while most gold diggers end up wasting their time and fall into poverty. The big prize must be offset by a small chance of winning it. That can only arise if the competition is fierce.

The mid-19th-century California gold rush drew in more than 1% of the US population. While some got lucky, many led a life of struggle, disease and early death. A gold rush creates a big waste of human resources due to its steep risk-return trade-off.

The Indian labour market is one big gold rush.

There is a thin creamy layer of government and corporate jobs that provides good wages and job security. Then there is a vast sea of jobs with poor pay, miserable working conditions and the dangling threat of termination. Naturally, young people starting their working lives try long and hard to get into that creamy layer. Most don’t make it. It is thin, after all. They eventually fall back on sweatshops, gig work or petty trade to make a living.

This two-tiered employment structure has a lot to do with our development path. India missed the manufacturing bus. Unlike East Asian economies, India failed to create mass employment in factories to absorb its youth bulge. Our growth is led by services like IT, finance, medicine, law and corporate management. These jobs pay a high-skill premium, but also place a high demand on skills. Since it’s difficult to tell beforehand who can win this job lottery, lots of people try.

The Sonam Wangchuk-Cockroach Janta Party (CJP)-supporting protests broke out over cancellation of NEET and the demand for the resignation of Union Education Minister Dharmendra Pradhan. Ironically, a very large fraction of India’s young population is also classified as NEET — Not in Education, Employment or Training. What are they doing? They are sitting for one exam after another, either to enter a very selective educational programme and obtain a passport to a white-collar job, or to land a government job that pays an artificial premium. They are huddled into coaching centres, cramming soulless books. They are wasting their youth in search of gold.

The CJP movement is protesting corruption within this system. The more fundamental problem is the system itself. It’s one that breeds inequality and waste of human potential. That will remain so even if no exam paper is leaked. The two-tiered job market is a product of a two-tiered education system that has created centres of excellence like IITs and IIMs, along with underfunded and badly run public schools where children do not learn the three R’s properly.

Universal, high-quality basic education is the foundation for industrialisation and good jobs for all. This is not a well-kept secret. There is no way around it, no quick fix. No amount of exam vigilance, investment summits or eight-lane highway networks will make up for a failure to invest in people.

That is what deserves maximum effort. We need productive jobs for the population. Not just fancy jobs for a labour elite.

Our affliction is not unlike that of the US and other developed nations in this respect. There, the problem isn’t so much a failure of basic education but the bulk loss of mid-level jobs to low-wage economies and automation. In the last 30 years, the US has become a skill-intensive economy where a fancy education is the only way out of low-wage ghettos. That pressure has manifested itself in the college admissions scandal, and the MAGA movement. As Daniel Markovits points out in his 2019 book, The Meritocracy Trap, even the rats that win the race pay a high price in expense and anxiety.

Indian films like Three Idiots and 12th Fail depict the dystopian world of the gold rush, but in an obtuse way. Their protagonists start out as rebels. At first, they seem to question rote learning, stifled creativity and the crushing burden of a winner-takes-all system. In the end, it’s revealed the hero has actually "cracked it". He has successfully captured the credential and affluence reserved for very few. Raju ban gaya gentleman!

That is conformity dressed as iconoclasm. Lack of enough good jobs is a feature, not a bug, in our economy. Paper leaks are its symptom, not its cause.

The writer is a professor at the Delhi School of Economics.