MBAs

Why engineers and MBAs become sweepers and peons

sweeper

The news of thousands of engineers and MBAs applying for low-level government jobs like that of a sweeper or a peon, makes it regularly into the media.
Very recently, the municipality in Amroha in Uttar Pradesh advertised for 114 posts of safai karamcharis or sweepers. They received 19,000 applications. Many of the applicants were engineers and MBAs.

There are multiple reasons for this phenomenon. Lower-level government jobs are much better paying than comparable jobs in the private sector. The salary differential can easily be two to three times. And this leads to many people applying. Like in the case of Amroha, 19,000 applications were received for 114 posts.

Further, we are producing many more engineers and MBAs, than are possibly required. Also, the quality of many engineers and MBAs is suspect and given that such individuals have no other option but to downgrade as far as the choice of job is concerned.
Actually this needs some more explanation.

Allow me to explain using the example of ants. Ants do what other ants are doing. As John H Miller writes in A Crude Look At the Whole: “If an ant encounters a lot of other ants returning with food, she too will go out and gather food. If food is plentiful, it will be easy to find and ants will return faster with food. That will encourage other ants to seek food as well. If food is scarce or if there is a predator about, few ants will return with food.” 

If few ants are returning with food other ants will not go out venturing for food and hence, not encounter the predator. Hence, ants doing what other ants are doing leads to productive behaviour for the colony of ants, most of the times.

But sometimes this is precisely what leads to trouble. As Miller writes: “That is not to say that blindly following a rule will always be optimal…Unfortunately, such a strategy can sometimes fail when a line of army ants inadvertently begins to follow its own trail, forming a circular mill that, with time, ends badly for all involved.” The ants keep going in the circle, till they die.

Now what has this got to do with engineers and MBAs wanting to become sweepers and peons? The question to ask here is why do people want to become engineers and MBAs? The answer lies in the fact that they (or their parents) know someone who got an engineering or an MBA degree and did pretty well for himself. Their friends, relatives, cousins, neighbours etc., also plan to do an engineering or an MBA or have already got a degree.

Now these friends, relatives, cousins, neighbours etc., want to get an engineering or an MBA degree because their friends, relatives, cousins and neighbours are also doing the same. In the process such individuals (and their parents) like ants end up in a circular mill following the people around them. This leads to huge demand for engineering and MBA degrees.

Of course, there is only a limited number of seats going around in good engineering and MBA colleges. In the process, the individuals end up at a bad engineering or an MBA college, and in many cases both, as they try to wipe out the ill-effects of a bad engineering degree by getting a bad MBA degree.

Of course, smart entrepreneurs have cashed in on this phenomenon over the years by either increasing the number of seats in their colleges or by starting new colleges. The trouble is that the teaching as well as infrastructure in many such colleges is not up to the mark. This leads to a situation where these engineers and MBAs are unemployable in companies and have to start looking for jobs which are much below the level than they had hoped for.

This in extreme cases leads to them applying for low-level government jobs of peons and sweepers. Given India’s population, even if a small proportion of people do so, the absolute numbers look very big. And that’s the sad part.

(Vivek Kaul is the author of the Easy Money trilogy. He can be reached at [email protected])
The column originally appeared in the Bangalore Mirror on March 2, 2016

Why post graduates and PhDs want to be peons

deflation
At a recent literature festival two well-respected veteran journalists were a part of a discussion. During the course of the discussion one of them said that he was travelling through Bihar recently, in the run up to the state assembly elections held in October and November, earlier this year. And he was surprised to know that in Bihar a job actually means a government job. To this the other senior journalist added that it means the same in other parts of the country as well.

This at a very basic level explains the fascination a large part of India has for government jobs. It is another extension of what we like to call a mai-baap sarkar.

In fact, over the years, reports have regularly appeared in the media about people with post graduate degrees, engineering degrees, MBAs and even PhDs, applying for jobs at the lowest level in the government.

Take the recent example from Uttar Pradesh. For a 368 posts of grade IV staff (peons) at the state Secretariat, the Uttar Pradesh government received 23.25 lakh applications. This included around 250 PhDs, 25,000 post graduates and 1.52 lakh graduates. “If we start interviewing such large number of applicants, it will take more than two years to complete the process,” a state government official told The Indian Express.

If 23.25 lakh people are applying for 368 jobs, it clearly shows the sad state of job creation in the state of Uttar Pradesh. What is even more surprising is that people with good degrees have applied.

Nevertheless what happened in Uttar Pradesh is not an isolated example and has been happening in other parts of the country as well. Take the case of Rajasthan University which sometime in 2011 wanted to employ 15 peons. It got 3000 applications for it. The Vice Chancellor of the University told NDTV that the university had received applications from: “candidates who’ve done PhD, MPhil, MBA and Msc…We are really surprised to get applications from such highly-qualified people.”

Or take the recent case in Chhattisgarh where 75,000 applications were received for 30 posts of peons in the Directorate of Economics and Statistics of the Chhattisgarh. The applicants included post graduates in arts and sciences and engineers as well, a news-report said.

What explains this trend? Lack of jobs is one answer. The fascination for government jobs and the job security that comes with it, is another. The fixed hours that government jobs have to offer is another possible reason. But there is a fourth answer to this as well. At lower levels, the government jobs are much better paying than the private sector. And there is data to back it up.

As the Report of the Seventh Pay Commission points out: “To obtain a comparative picture of the salaries paid in the government with that in the private sector enterprises the Commission engaged the Indian Institute of Management, Ahmedabad to conduct a study. According to the study the total emoluments of a General Helper, who is the lowest ranked employee in the government is Rs 22,579, more than two times the emoluments of a General Helper in the private sector organizations surveyed at Rs 8,000-9,500.”

Hence, the IIM Ahmedabad study “on comparing job families between the government and private/public sector has brought out the fact that…at lower levels salaries are much lower in the private sector as compared to government jobs.”

This explains why so many people end up applying for jobs of peons with the government. The economic incentive is at work. It also explains why so many people with degrees end up applying for low-end jobs with the government. Over and above the salary, any money from corruption can also be added to the kitty.

Further this is not a recent phenomenon and has been at work for a while now. As Professor R Vaidyanathan of IIM Bangalore put it in 2008: “Most of the discussion on the emoluments of the government employees focuses on the senior level positions like that of Secretary etc. But more important is the positions at the lower end of the hierarchy. There was an interesting news item sometime ago about there being over 11,000 applicants for just three posts of peons advertised by the Haryana Electricity Regulatory Commission.”

So what is happening in 2015 was also happening in 2008. As Vaidyanathan writes: “This is hardly surprising considering the lower the category of position in government the larger is the number of aspirants. The salary and perks in government are significantly higher than those of the private sector at the lower levels. Reports suggest that post-implementation of the Pay Commission report [the Sixth Pay Commission i.e.], the lowest-level worker will get more than Rs 10,000 per month as pay. In the private sector, a peon or similar-category position might fetch around Rs 3,000 or at best Rs 5,000. An important consideration is the hours of work involved.”

Another point that needs to be discussed here is that we are producing many more engineers and MBAs than can be possibly absorbed in adequate jobs. As Akhilesh Tilotia writes in The Making of India: “An analysis of the demand-supply scenario in the higher education industry shows significant capacity addition over the last few years: 2.4 million higher education seats in 2012 from 1.1 million in 2008.” In 2016, India will produce 1.5 million engineers. This is more than the United States (0.1 million) and China (1.1 million) put together.

The number of MBAs between 2012 and 2008 has also jumped to 4 lakh from the earlier 1 lakh. Also, the quality of many of these engineers and MBAs is not up to the mark. As Tilotia writes: “India faces a unique situation where some institutes (IITs,IIMs, etc.) are intensely contested while a large number of the recently-opened institutes struggle to fill seats…With most of the 3 million people wanting to pursue higher education now having an opportunity to do so, the big question that should…be asked…are all these trained personnel required? Our analysis seems to suggest that India may be over-educating its people relative to the current and at least the medium-term forecast requirement of the economy.”

And this to some extent also explains why people with good education degrees apply for jobs of peons.

The column originally appeared on The Daily Reckoning on December 9, 2015