Thursday, 11 Sep, 2025
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A new growth model must focus on job quality over quantity—enhancing education outcomes, aligning skills with market demand, and investing in sectors like manufacturing, clean energy, healthcare, and logistics.
India’s job numbers are rising—but for many in the workforce, especially educated professionals, it doesn’t feel like progress. A new report from the Centre for Social and Economic Progress (CSEP) highlights a growing disconnect: even as employment increases, real wages for most workers have flatlined or declined.
Economists say that’s not how a healthy labour market is supposed to work. More jobs typically lead to rising incomes. But in India, that link is weakening—and it’s a troubling sign for the country’s long-term growth story.
According to the CSEP study, the only real winners in recent years have been high-ranking managers and administrators. Their real daily wages—adjusted for inflation—grew at a robust 6.7 per cent per year between 2017–18 and 2023–24, reaching Rs 611.9. But these roles represent just a sliver of the overall workforce.
For everyone else, particularly the educated middle class, the picture looks far bleaker. Clerical workers—a group that includes office staff, data entry operators, and many government employees—saw their real wages drop 1.3 per cent a year, dropping to Rs 397.6. These jobs form the backbone of urban middle-class India, and their declining incomes speak volumes about the country’s uneven recovery.
Even more surprising is what’s happening across education levels. Workers with graduate degrees or higher have seen their real wages shrink slightly every year. So have those with diplomas or secondary school education. Meanwhile, the least educated—those with no schooling or just primary education—have seen modest wage gains.
That turns the usual development logic upside down. In most economies, more education means better pay. However, in India, the reverse seems to be happening.
Why? Several reasons stand out. First, many degrees don’t translate into skills that employers value. A glut of low-quality colleges has led to credential inflation—more degrees chasing fewer good jobs. Secondly, many educated workers are stuck in oversaturated fields, from teaching to back-office services. And thirdly, automation and outsourcing have hit mid-skill white-collar roles hard, putting pressure on wages.
This gap between education and earnings is not just a personal disappointment—it’s a macroeconomic risk. The country’s much-touted “demographic dividend” depends on its young and educated workforce powering future growth. But if that workforce can’t earn a decent income, the dividend risks turning into a demographic drag.
More significantly, the CSEP report also confirms what other national surveys have been hinting at: employment is rising, especially in rural India—but often in low-wage, low-skill sectors like livestock, fisheries, and domestic services. More women are joining the workforce, but many are entering informal jobs with limited earning potential.
In other words, India is creating more jobs, but not better ones.
This is what economists call “employment without development.” People are working, but they’re not earning enough to escape financial insecurity or build a better future. Without rising incomes, particularly for the middle class, consumption stays weak—and so does demand for higher-quality goods and services. That, in turn, drags on growth.
Experts are of the view that to fix this, India needs a new growth model—one that focuses not just on quantity of jobs, but quality. That means improving education outcomes, not just enrolment rates. It means aligning training programmes with market needs. And it means investing in industries that generate good, stable jobs—like manufacturing, clean energy, healthcare, and logistics.
Because it’s not enough to just get people employed. Work needs to pay. Without rising wages and better opportunities, especially for the educated, India’s growth story risks becoming hollow—impressive on paper, but less meaningful in the lives of ordinary citizens.
