Ashraf Engineer
March 20, 2021
Hello and welcome to All Indians Matter. I am Ashraf Engineer
The prolonged lockdown imposed last year pushed India’s urban unemployment rate above 20% for the quarter ending June 2020, according to the Periodic Labour Force Survey. Worryingly, these numbers released recently by the National Statistical Office might not capture the full extent of the turmoil in labour markets. This is because there was a simultaneous drop in labour force participation rate, which means many workers actually withdrew from labour markets and were not counted as unemployed. These numbers point to a tremendous and persistent fragility in India’s jobs landscape despite the near complete lifting of the lockdown.
SIGNATURE TUNE
If you thought that it was only rural unemployment that rose during the pandemic, think again. Urban unemployment more than doubled. The urban unemployment rate skyrocketed from 9.1% in the quarter ending March 2020 to 20.9% in the quarter ending June 2020. Young workers suffered the most as every third worker in the 15-29 year age group was out of work.
Also, unsurprisingly, the lockdown hurt the poorest workers the most. The share of casual workers in the urban economy, around 12%, fell to just 6.3%. The survey does not report wage data, which would have almost certainly painted an even more grim picture because casual workers have the least earnings among the three broad worker categories – self-employed, salaried and casual.
Sector-wise, job losses were recorded most in what is known as the secondary sector – mining, manufacturing, construction, electricity, water supply, etc.
As the overall number of jobs plummeted, the share of agriculture and services in the remaining jobs increased. That’s not necessarily great news. The rise in self-employment and shift towards the services sector, both because workers had no other choice, underscore the distress in labour markets. Think of it as someone who had a regular job in a manufacturing plant being forced to set up a fruit stall to eke out an unreliable living now.
The survey seems to have got the data right. The unemployment rates reported by it more or less match the 17.8% unemployment rate calculated by the Centre for Monitoring Indian Economy, or CMIE.
As always, India’s women experienced the worst suffering. The labour participation rate for women was 9.3% compared to 67.4% for males, according to CMIE.
It’s tough to imagine a modern, progressive India without women having access to social and economic opportunities.
According to International Labour Organisation estimates, India’s female labour force participation has been on the decline for years. It was 32% in 2005 but only 21% in 2019.
You could blame it on a variety of factors – as diverse as patriarchy and mechanisation. In the case of the latter, women tend to be laid off first when jobs become redundant. While much is made of the private sector’s growth, it has not been fast enough to absorb the increase in female labour supply.
Despite all the government schemes, such as the Pradhan Mantri Mudra Yojana, of which 75% of the beneficiaries are women, much needs to be done.
For starters, the data the National Statistical Office gathers should capture women’s contribution to the economy through paid and unpaid work better. This could help the government develop better policies for women.
Women need to be better educated. Many girls drop out in secondary school and fewer still complete higher education. There is, in fact, a strong link between education levels and domestic work – the Economic Survey 2020 shows that only 5.3% of highly educated women in the age group of 15-59 years are engaged in full-time domestic duties.
Also, while we have good legislation like the Maternity Benefit Act and Code of Wages, their implementation must be monitored better.
Let’s not forget the role of infrastructure either. Residential hostels and safe public transport would enable more women to join the formal labour force.
Investing in women is good for the economy, good for society and it’s the right thing to do.
The Periodic Labour Force Survey mirrors the inequality in our society and economy. This is why India’s billionaires grew their wealth by 35% during the pandemic even as job losses amplified at the lower levels. Subsidies and bailouts to large business houses serve to protect them while the cost of blunders like demonetisation is shouldered by the poor. The pandemic has increased inequality, and the spectre of instability and social unrest looms large.
In such a situation, the economic focus must change from merely growth to correcting these inequities.
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