Unemployment

Unemployment

The graph below shows that, compared to the year 2004-05, the Work Participation Rate (per 1000 person), according to the principal and subsidiary statuses taken together, during 2005-06 for males did not change in rural areas but decreased by 1 percentage point in urban areas. However, for females there was a decline of 2 percentage points in rural areas and 3 percentage points in urban areas during the same period.

Work Participation Rate (per 1000 person) in the usual status in different NSS rounds

 

Work Participation Rate (per 1000 person) in the usual status in different NSS rounds


Source: Employment and Unemployment Situation in India 2005-06, NSS 62nd Round
Note: * The Usual Status, determined on the basis of the usual principal activity and usual subsidiary economic activity of a person taken together, is considered as the usual activity status of the person and is written as usual status (ps+ss).

 

According to 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

The authoritative sources of data on wage growth in India are the Annual Survey of Industries by the Central Statistics Office and the real wage index published by the Labour Bureau. Both data sources indicate that real wages declined in a majority of recent years, shrinking the purchasing power of wage earners. This would explain the many concerns expressed by workers in India about rapidly increasing prices, particularly food prices.

Analysis of the Employment–Unemployment Survey from the National Sample Survey Office (NSSO), conducted every five years along with the Consumer Expenditure Survey, shows that salaried and casual workers saw a 150 per cent increase in their earnings– much higher than the 52 per cent increase in the consumer price index – in the five years between 2004/05 and 2009/10.

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%. 

Using a different and non-comparable methodology, total hourly compensation costs in manufacturing were estimated at US$1.36 in China for 2008 and at US$1.17 in India for 2007 (United States Department of Labor, Bureau of Labor Statistics, 2011). Although these differences are measured in current US dollars and therefore are dependent on exchange rate fluctuations, they nonetheless point towards the persistence of wide gaps in wages and labour productivity across the world.

In India, minimum wages paid through the National Rural Employment Generation Scheme (NREGS) appear to have reduced non-compliance with minimum wages in the private sector.

Monthly average wages adjusted for inflation–known as real average wages–grew globally by 1.2 per cent in 2011, down from 2.1 per cent in 2010 and 3 per cent in 2007. Omitting China, global real average wages grew at only 0.2 per cent in 2011, down from 1.3 per cent in 2010 and 2.3 per cent in 2007.

In developed economies, labour productivity has increased more than twice as much as wages since 1999. In the US, hourly labour productivity in the non-farm business sector increased by about 85 per cent while earnings only increased by about 35 per cent since about 1980. In Germany, labour productivity surged by almost a quarter over the past two decades while wages remained flat. 


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