The economy is unable to create quality jobsThe decline in unemployment is a sign of an improvement in the labor market, but the survey also shows that the proportion of regular wage and salary employment is decreasing and self-employment is increasing.
last update October 17, 2023, 01:50 IS
Representative image of the job search.
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Representative image of the job search.
Some facts from the Periodic Labor Force Survey (PLFS) conducted by the National Sample Survey Office (NSSO) have shed useful light on the country’s labor market.
According to reports, the country’s unemployment rate has fallen to its lowest level in six years at 3.2 percent. The labor force participation rate (LFPR) for those aged 15 and over increased to 57.9 percent from 49.8 percent in 2017-2018.
The ratio between employed people and population also improved in the reporting period. The LFPR in urban areas recorded an increase from 47.5 percent in 2017-18 to 48.8 percent in 2022-23. While it was around 73.5 percent among men, it rose from 20.9 percent to 23.2 percent among women. Although these numbers are positive, it is the connection between them that gives them meaning. What is important is that although these numbers represent the quantity of employment, the quality of it must be examined for its actual value.
The decline in unemployment is a sign of an improvement in the labor market, but the survey also shows that the proportion of regular wage and salary employment is decreasing and self-employment is increasing.
The quality of employment becomes an important factor in this context. In the non-agricultural sector, the proportion of people in informal employment increased from 71.4 percent in 2020-21 to 74.3 percent in 2022-23.
This is a casual job where there is no job security and the wages are very low. The survey also found that the proportion of self-employed people increased from 55.6 percent in 2020-21 to 57.3 percent in 2022-23 and the proportion of regular workers and employees increased from 21.1 percent to 21.1 percent has fallen by 20.9 percent.
The conclusion that can be drawn from this data is that the economy has not created sufficient productive and rewarding forms of employment to absorb the millions of people entering the labor market each year.
The labor force participation rate must also be taken into account. The increase was greater in urban areas than in rural areas. Much of the rural increase is due to women, whose participation rate in rural areas increased from 24.6 percent in 2017-18 to 41.5 percent in 2022-23.
That is an increase of around 17 percentage points. This is attributed to economic hardship in rural areas, forcing women to work to supplement their family income.
This conclusion is supported by the fact that work under NREGS, and in particular women’s working days under the program, had increased over the reporting period. The survey’s message is that the economy needs to create many more jobs and the quality of jobs should be improved. More women should come into the job market, but not out of necessity.
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