Our labour force survey shows a structural crisis of employment

Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!

Our labour force survey shows a structural crisis of employment

---

Read more on - Polity | Economy | Schemes | S&T | Environment

---

• Latest data from PLFS of NSO: The employment estimates (third annual round PLFS, NSO) were released. This was for July 2019 - June 2020, the third since 2017-18 and 2018-19.  [PLFS - Periodic Labour Force Survey, NSO - National Statistical Office]
• First round: The 2017-18 data was quite revealing, as it showed a 1.5 crore shrinkage in total labour force (2011-12 to 2017-18), and a sharp rise in unemployment even then (compared to employment unemployment surveys till 2011-12).

1. It showed just how fragile employment conditions in India were
2. PLFS-3 (2019-20) only reinforces the worsening of that.

• PLFS-3: This is for a period when the economic growth had gone for a toss, and real wages were declining. Total no. of unemployed went up by 40 lakh, compared to 2018-19. 

1. Unemployment rate was steady at 8.8%, and it is a limited indicator only for Indian jobs market
2. A large part of India lives in poverty, and unemployment is a luxury no one can truly afford - hence official unemployment figures reveal little about actual joblessness
3. Better use the "number of hours worked", which has gone down sharply across groups, showing that even those who got work, opportunities were weaker

• Distress employment: As the economy weakened, people took up whatever jobs came their way, leading to a rise of 4.3 crore in the total employment figures (from 2019-20). How can this be said for sure? Because it came when the economy was slowing.
• Structural trouble: When economies grow rapidly, their employment structures change. Many move away from low-productivity areas (agriculture) to high-productivity areas.

1. From 2004-05, India's absolute workers in agriculture started dropping, till 2017-18.
2. In 2018-19, it was stable. Then in 2019-20, it added 3.2 crore workers (roughly 75% of new workers for 2019-20).
3. The structural transformation of India since 2004-05 was reversed, in one shot.

• During distress: When times are rough, households push women and children also into active work, to maintain real income levels. It was seen in 1999-00 to 2004-05 period, when Indian economy faced a similar crisis. The period 2019-20 onwards shows similar trends - more female workers at the bottom end of the pyramid, and many new agri workers.

1. The count of workers in manufacturing and construction has declined (largest non-farm sectors)
2. Agriculture is the only shock absorber for those who lose jobs and those who are fresh entrants; but agri itself is in trouble overall due to unfavourable terms of trade and falling farm incomes

• Wake up: PLFS estimates are a big warning to policymakers that even before the pandemic, Indian economy was structurally changing for the worse. Unless actual economic growth takes place, and productive and remunerative jobs are created, things would only go downhill from here.

Read more on - Polity | Economy | Schemes | S&T | Environment

Join UPSC Self Prep course | Online Course (PT Gurukul)  | Covid Special Course | Join PT courses

* Content sourced from free internet sources (publications, PIB site, international sites, etc.). Take your own subscriptions. Copyrights acknowledged.