The Cockroach In The Room

Everyone is writing about the cockroach meme. But why is nobody writing about what it is measuring?

India’s Chief Justice called the unemployed youth of India entering certain professions “like cockroaches” during a court hearing. While he did clarify later, Gen-Z didn’t seem to care. Within days, the Cockroach Janta Party had 40,000 members, a five point manifesto, and a banned X handle that came back with the caption: “You thought you could get rid of us? Lol.” Essentially, for lack of a better term, flipping the Indian Chief Justice off.

Why would he say that? Is it warranted? Not really. The Gen-Z population of today, who are currently entering the workforce, followed all the rules. India added roughly 5 million graduates annually between 2004 and 2023. Yet, nearly 40% of those Indian graduates under 25 are unemployed. Why was India able to absorb only 2.8 million of those graduates into employment? The gap between those two numbers is far from a rounding error. The question is, why in a developing, growing economy like India are 11 million educated, ambitious people waiting in the wings?

I wrote earlier this year about India’s manufacturing share of GDP falling to a record low 12.5% while the working-age population grew steadily. The Cockroach Janta Party is what that looks like on the ground. It’s not just a meme, it’s the frustration of a generation of Indians aggregated. It is literally the demographic dividend curdling in real time.

The term adopted by economists for this was called the queuing phenomenon. It entailed educated workers waiting for jobs from the formal sector that would match their qualifications, and unwilling to be absorbed into a more informal economy that does not require a degree. Today, the formal sector is creating far fewer jobs than the number of graduates seeking them. What happens in such a scenario? We see the queue grow longer and longer every year. This queueing phenomenon has resulted in more than 80% of jobs in India remaining informal. Where does this leave the graduate who spent four years and significant family capital on a degree? Especially when that degree is being disregarded. Is their refusal to be absorbed into the informal sector logical? Is the system that produced this phenomenon fair? In my opinion, it isn’t.

We may not say it out loud, but India’s consumption story is weakening. A consumption story that rested on the assumption of a young, growing, educated population that would sustain domestic demand, does not seem to be the India story any longer. This assumption would only hold true if they had the income to fuel that demand.

But we are seeing a contrarian picture playing out. Wage growth for graduates has slowed even as the number of graduates has surged, resulting in a class of qualified but jobless young Indians. How is it possible for a generation of young Indians without formal employment, therefore without the ability to build savings, to even imagine buying homes, or drive the consumption cycle that India’s bull case depends on?

The creation of a satirical political party that posts cockroach memes seems like an unfortunate inevitability at this point.

The Cockroach Janta Party, while calling itself satirical, seems more like a pressure gauge. Which has me asking the question, that if India has the demographics, and honestly everything required on paper, why are they unable to make this dividend pay out?

What’s missing, and what I had highlighted in my earlier article, is building out at sufficient scale or speed, a manufacturing base. A base that would result in increasing formal employment and skilling infrastructure, driving the engine that would convert college graduates into workers the economy needs.

Not, cockroaches.

Let’s be honest, the Chief Justice simply highlighted a gap between what the youth of India was promised and what the economy delivered.

And, until that gap closes, we’re stuck with memes.