Unemployment

Unemployment


Key findings of the Global Employment Trends 2011: The challenge of a jobs recovery, International Labour Organization,
http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/
@publ/documents/publication/wcms_150440.pdf
are as follows:  

India specific points

• The report notes that the largest reductions in poverty continue to be recorded in eastern Asia, with poverty rates in China expected to fall to around 5 per cent in 2015. Poverty rates in India are expected to decline from 51 per cent in 1990 to 24 per cent in 2015, with the number of people living in extreme poverty expected to decrease by 188 million.

• Economic growth in the South Asia region as a whole declined from 9.1 per cent in 2007 to 5.9 per cent in 2008 and to 5.5 per cent in 2009. It is estimated that the region’s economy grew by 8.9 per cent in 2010, led by India, which registered rapid growth of 9.7 per cent in 2010.

• A larger share of women are engaged in vulnerable employment compared to men in South Asia, with gender-based gaps particularly large in India, Nepal and Pakistan. South Asia has the highest rate of vulnerable employment among all regions in the world, at 78.5 per cent of total employment in 2009. The rate has declined modestly in recent years, down from 81.1 per cent in 1999.

Unemployment remains elevated

• The number of unemployed globally stood at 205 million in 2010, essentially unchanged from the year earlier and 27.6 million higher than in 2007, with little hope for this figure to revert to precrisis levels in the near term. The global unemployment rate stood at 6.2 per cent in 2010, versus 6.3 per cent in 2009, but still well above the rate of 5.6 per cent in 2007.

• The ILO projects a global unemployment rate of 6.1 per cent, equivalent to 203.3 million unemployed, through 2011. 55 per cent of the increase in global unemployment between 2007 and 2010 occurred in the Developed Economies and European Union (EU) region, while the region only accounts for 15 per cent of the world’s labour force. In several economies in the developing world, such as Brazil, Kazakhstan, Sri Lanka, Thailand and Uruguay, unemployment rates have actually fallen below their pre-crisis levels.

• The elevated level of global unemployment stands in stark contrast to the recovery that has been seen in several key macroeconomic indicators: real global GDP, private consumption, gross fixed investment and world trade had all recovered by 2010, surpassing pre-crisis levels.

• There has been an uneven recovery in labour markets, with a continued rise in joblessness in the Developed Economies and European Union region, a steady to slightly improving unemployment picture in most developing regions.

• An estimated 1.53 billion workers were in vulnerable employment in 2009, corresponding to a vulnerable employment rate of 50.1 per cent. There were 630 million workers (20.7 per cent of all workers in the world) living with their families at the extreme US$ 1.25 a day level in 2009. This corresponds to an additional 40 million working poor, 1.6 percentage points higher than projected on the basis of pre-crisis trends.

A recovery in growth that has not brought about a comparable recovery in employment

• At the global level, the employment-to-population ratio, which indicates whether the employment-generating capacity of a country or region is rising or falling, declined from 61.7 in 2007 to 61.2 in 2009 and is estimated at 61.1 per cent in 2010. Many economies are simply not generating sufficient employment opportunities to absorb growth in the working-age population.

• In 64 countries for which quarterly data are available, as of the second quarter in 2010, the number of countries with falling employment-to-population ratios was still twice the number that had rising ratios. It is clear that the ongoing economic recovery is not yet leading to a sufficient expansion in employment opportunities in many countries.

Industrial employment hardest hit

• Total global employment in industry declined slightly in 2009, which is a major divergence from the historical annual growth rate of 3.4 per cent over the period from 2002 to 2007. Employment in agriculture grew in 2009, which also represented a divergence versus historical trends.

Growing number of discouraged youth

• The number of unemployed youth (aged 15–24) is estimated to have declined from 79.6 million in 2009 to 77.7 million in 2010, though this is still well above the 2007 level of 73.5 million. The global youth unemployment rate stood at 12.6 per cent in 2010, up from 11.8 per cent in 2007, but down slightly from 12.8 per cent in 2009.

• However, unemployment rates understate the severe extent to which the crisis impacted young people as labour force participation among youth was strongly affected by the crisis. Across 56 countries with available data, there are 1.7 million fewer youth in the labour market than expected based on longer term trends, indicating that discouragement among youth has risen sharply. These discouraged youth are not counted among the unemployed because they are not actively seeking work.

Trends in labour productivity and real wages reveal pressure on employment quality

• Labour productivity growth turned negative in 2009, declining by 1.4 per cent versus growth of 3.3 per cent in 2007. In 2010, global productivity growth recovered to 3.1 per cent.

• The problem of delayed labour market recovery is seen not only in the lag between output growth and employment growth and reduced unemployment but also in some countries in the lag between productivity growth and resumption in real wage growth. This phenomenon can threaten future recovery prospects, given the strong linkages between employment and growth in real wages on the one hand and consumption on the other.

Stagnating progress in reducing vulnerable employment and slowed progress in reducing working poverty

• On the basis of available data, the current estimate of the number of workers in vulnerable employment in 2009 is 1.53 billion, which corresponds to a global vulnerable employment rate of 50.1 per cent. The incidence of vulnerable employment remained roughly flat between 2008 and 2009, versus a steady and substantial average decline in the years preceding the crisis.

• The estimated working poverty rate at the extreme US$ 1.25 level for 2009 is 20.7 per cent, which is 1.6 percentage points higher than the rate projected on the basis of the pre-crisis trend. This amounts to around 40 million more working poor at the extreme US$ 1.25 level in 2009 than would have been expected on the basis of pre-crisis trends. The share of workers living with their families below the US$ 2 a day poverty line is estimated at around 39 per cent, or 1.2 billion workers worldwide.

An improved global economy, yet downside risks predominate in 2011

• Following a contraction in 2009, the global economy grew at a rapid pace of 4.8 per cent in 2010. The recovery is expected to continue in 2011, though at a more moderate pace (4.2 per cent). However, due to the fragile state of the labour market in many countries, high levels of public debt and continued vulnerabilities in the financial sector and private households, downside risks predominate.

• On the basis of current macroeconomic forecasts, the global unemployment rate is projected at 6.1 per cent in 2011, corresponding to global unemployment of 203.3 million. This represents little improvement over 2010 levels.


According to the Report on Employment & Unemployment Survey (2009-10), Ministry of Labour and Employment, Labour Bureau, October, 2010
http://labourbureau.nic.in/Final_Report_Emp_Unemp_2009_10.pdf:  

•    The present Employment-Unemployment survey (prepared by the Labour Bureau) has been conducted in 28 States/UTs spread across the country in which about 99 per cent of the country’s population resides.  

•    Under the survey, 45,859 household schedules have been canvassed of which 24,653 are rural and 21,206 are urban household schedules. A total of 2,33,410 persons have been interviewed to gather information from 45,859 households.

•    Information in the present Employment-Unemployment survey has been collected for the fixed reference period from 1.4.2009 to 31.3.2010.

•    The survey reveals that 45.5 percent of the overall working population is employed in agriculture, forestry and fisheries. Only 8.9 percent of the working population is engaged in manufacturing, 8.8 percent is engaged in community services group and 7.5 in construction industry.

•    In the rural areas, 57.6 percent of the working population is engaged in agriculture, forestry and fisheries. 7.2 percent of the working population is engaged in construction industry and 6.7 percent of the population is employed in manufacturing.


•    In the urban areas, 9.9 percent of the working population is engaged in agriculture, forestry and fisheries. 8.6 percent of the working population is engaged in construction industry and 15.4 percent of the population is employed in manufacturing. Nearly 17.3 percent of the working population in urban India is employed in wholesale, retail etc.

•    The survey report acknowledges that agriculture sector is projected to generate no additional employment during the Eleventh Plan period. Employment in manufacturing is however expected to grow at 4 per cent while construction and transport & communication are expected to grow at around 8.2 per cent and 7.6 per cent, respectively. The projected increase in total labour force during 11th Plan is 45 million. As against this, 58 million employment opportunities are targeted to be created during the Eleventh Plan. This is expected to reduce unemployment rate to below 5 per cent. However, the results of the present survey report shows that at the overall level the unemployment rate is estimated at 94, which imply that 9.4 per cent of the labour force is unemployed and looking for jobs. In absolute terms about 40 million persons are found unemployed based on the survey results at overall level of the State/UT’s surveyed.

•    A majority of the estimated unemployed persons (80 per cent) is in the rural sector at overall level.

•    Unemployment rate in rural India is 10.1 percent, whereas unemployment rate in urban India is 7.3 percent. Unemployment rate among male is 8.0 percent and among female is 14.6 percent.

•    Comparison of Labour Bureau’s present survey results for the year 2009-10 with NSSO’s Employment-Unemployment survey results for 2007-08, reveals that the unemployment rate derived on the basis of the Bureau’s survey is quite high. Higher unemployment rate may be parting attributed to as much as 10 per cent difference in the contribution of agriculture sector to total employment estimated in the present survey vis-à-vis the NSSO 2007-08 survey estimates. While the shift of workforce from agriculture to other sectors is a positive trend for a fast growing economy, the steep reduction in lower share of agriculture employment based on the Bureau’s survey could be attributed to lack of adequate probing skills of the Contract Investigators.

•    Findings of the survey show that out of 1000 persons, 351 persons are in the employed category, 36 in the unemployed category and the rest 613 persons are out of labour force at overall level of the States/UT’s surveyed. Within the employed category, out of 351 persons, 154 are self employed, 59 are regular wage/salaried and the remaining 138 are in casual labour category at overall level. In the rural sector for every 1000 persons, 356 persons are in the employed category, 40 are unemployed and the rest 604 persons are not in the labour force. In the urban sector out of every 1000 persons, the number of employed persons is 335, number of unemployed is 27 and the remaining 638 persons are not in the labour force.

•    Majority of the females in the urban sector (86 per cent) and the rural sector (81 per cent) are out of labour force.

•    It is seen that in the self employed person’s category, maximum proportion of persons is engaged in agriculture, forestry & fishing group (572 out of 1000 persons) followed by wholesale and retail trade (135 out of 1000 persons) at overall level.

•    In the second employment category of regular wage/salaried person, maximum proportion of the employed is engaged in the community services (227 persons out of 1000 persons) followed by 153 in manufacturing industry.

•    In the third employment category i.e. casual labour; a majority of the persons are in the agriculture, forestry and fishing industry group (467 persons out of 1000 persons) followed by 148 in the construction sector.

•    The survey results reveal that majority of the employed persons are employed in proprietary type of enterprises (494 persons out of 1000 persons) followed by public/private limited companies (200 persons) etc at overall level.

•    At the level of rural and urban sector also, majority of the workers are reportedly employed in the proprietary type of enterprises (517 persons and 428 persons respectively out of 1000 persons).

•    The survey results reveal that at overall level out of 1000 persons, 157 persons are getting paid leave or are eligible for paid leave. The industry wise break up shows that in community services group, a maximum of 443 persons out of 1000 persons are eligible for paid leave. On the other hand in agriculture, forestry & fisheries group, a minimum of 54 persons out of 1000 persons have reported paid leave at overall level.

•    In case of other social security benefits such as the provident fund, gratuity, health care & maternity benefits, pension etc., 163 persons out of 1000 persons have reported receiving some social security benefits in the enterprises in which they are employed. Again in community services group, a maximum of 400 persons out of 1000 persons have reported social security benefits in the units in which they are employed. In agriculture, forestry & fishery group however a minimum of 82 persons out of 1000 persons have reported receiving social security benefits.


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