Unemployment

KEY TRENDS


•    Among rural males, the most demanded field of vocational training was ‘driving and motor mechanic work’ (18 percent) followed by ‘computer trades’ (17 percent), ‘electrical and electronic engineering trades’ (16 percent), ‘mechanical engineering trades’ (12 percent) in the rural areas £

•    Among rural female, the highest demand for field of vocational training was observed in ‘textile related work’ (26 percent).This was followed by the ‘computer trades’ (18 percent) and ‘health and paramedical services related work’ (14 percent) £

•    India’s real wages fell 1% between 2008 and 2011, while labour productivity grew 7.6% in the same period. In contrast, China’s real wage growth was 11% in 2008-11, while labour productivity expanded 9%. India’s real wage growth was 1% in 1999-2007, while labour productivity rose by 5%. In 1999-2007, China’s real wage growth was 13.5%, while labour productivity growth was 9% 

•    The unemployment rate is estimated to be 3.8 per cent at All India level under the UPS approach. In rural areas, unemployment rate is 3.4 per cent whereas in urban areas, the same is 5.0 per cent under the UPS approach. At all India level, the female unemployment rate is estimated to be 6.9 per cent whereas for males, the unemployment rate is 2.9 per cent under the UPS approach++

•    Employment elasticity of agricultural growth (see the note below) declined from 0.52 during 1983-1993/94 to 0.28 during 1993/94-2004/05#

•    The growth of total employment declined from 2.03 per cent during 1983/1993-94 to 1.85 per cent during 1993-94/2004-05#

•    The share of unorganized sector agricultural workers in the total agricultural workers was 98 per cent during 2004-05#

•    Nearly two-thirds of the agricultural workers (64 per cent) are self-employed, or farmers as we call them, and the remaining, a little over one-third (36 per cent), wage workers#

•    Growth rate of agricultural employment decelerated from 1.4 per cent during the period 1983/1993-94 to 0.8 per cent during the period 1993-94/2004-05*
 

Note-

Usual Principal Status: The labour force is typically measured through the usual principal activity status (UPS) which reflects the status of an individual over a reference period of one year. Thus, a person is classified as belonging to labour force, if s/he had been either working or looking for work during longer part of the 365 days preceding the survey. The UPS measure excludes from the labour force all those who are employed and/or unemployed for a total of less than six months. Thus persons, who work intermittently, either because of the pattern of work in the household farm or enterprise or due to economic compulsions and other reasons, would not be included in the labour force unless their days at work and unemployment totalled over half the reference year.

Employment elasticity indicates an increase in employment in response to economic growth. A reduction in employment elasticity suggests that the rate of increase in jobs is on the decline 

£ NSS report no. 551 (66/10/6) titled Status of Education and Vocational Training in India (66th Round), July 2009-June 2010, published in March 2013, MoSPI, http://mospi.nic.in/Mospi_New/upload/nss_report_551.pdf

∂ Global Wage Report 2012-13: Wages and equitable growth, ILO, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dc
omm/documents/publication/wcms_194843.pdf 

++Report on Second Annual Employment-Unemployment Survey 2011-12,

http://labourbureau.nic.in/rep_1.pdf, 

http://labourbureau.nic.in/rep_2.pdf, 

http://labourbureau.nic.in/press_n.pdf

#The Challenge of Employment in India:An Informal Economy Perspective, Volume-I, Main Report, National Commission forEnterprises in the Unorganised Sector (NCEUS), April, 2009, http://nceus.gov.in/

*NCEUS (2007), Report on Conditions of Work and Promotion of Livelihoods in theUnorganised Sector


OVERVIEW

Despite a consistently high GDP growth rate, India is not able to generate even a fraction of new job its rural folks require. The new job creation is restricted to higher end service sector areas like finance, insurance, IT and IT Enable Services (ITES) rather than in manufacturing and infrastructure where the low-skill rural migrants hope to find work. A combination of sluggish village economy, stagnation in rural crafts and cottage industry, falling farm incomes and poor human development indicators (HDI) is a perfect recipe for more rural unemployment and more distress migration to cities. 

Even before the recession started, creation of new jobs had hit negative growth. Nine out of ten people in the trillion-dollar economy work in the unorganized sector and three fourths of all Indians live on Rs 20 a day, according to the National Commission for Enterprises in the Unorganized Sector (NCEUS). Many economists argue that migration from villages to cities is a necessary condition for growth. However, India's 'low cost advantage' in the global market ensures low earnings which fail to kick off the growth cycle of reasonable purchasing power creating more domestic demand and finally leading to more job creation.

Numbers show that instead of ‘getting there’ we could be moving in the opposite direction. For instance the rate of unemployment rose by 1 percentage point in the decade between 1994 and 2005. Among rural males the proportion of self-employed has also fallen by four percentage points between early eighties and 2005. This spells doom for work participation of rural poor in the face of falling employment.

Figures also show that the situation is unchanged or worsened for rural females since the early eighties. Over 45 per cent of the farmers’ meager incomes come from rural non-farm employment (RNFE), which, in effect, is another name for casual labour. The wages are typically low because the farmer has to take whatever work he can get in the vicinity of his village. Right now only 57 per cent of the farmers are self employed and above 36 pr cent are wage workers, of which 98 per cent are engaged as casual labour.

 
 
 
 
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