Periodic labour force survey (PLFS) for the period July\u201921 to June\u201922 (FY22) shows a decline in unemployment rate (UR) over previous years. However, amidst the continued sluggishness in economic performance, this doesn\u2019t look very convincing. So, has UR really declined or there is more to it than meets the eye. Here is a look at the details explaining the same. \u00a0 <\/p>\n
PLFS is carried out by NSO (National Statistical Office) to gauge actual status of employment in India. The survey has been started a few years back and the current survey is fifth in the series. As per the report, UR stood at 4.1% in FY22, lower than 4.2%, 4.8%, 5.8% and 6.1% respectively in previous four years. UR is defined as number of people seeking jobs but unemployed divided by number of people employed plus those seeking jobs but unemployed. While the figure paints a very bright picture, the employment is dominated by segments which is more in the nature of \u2018disguised employment\u2019, as discussed later. Further, the segregated data across male\/females, rural\/urban, youths and educational level shows that there are pockets with significantly higher stress. The survey publishes findings for 15-29 years, above 15 years age group and all age group. The analysis here is for population above 15 years of age only.<\/p>\n
In terms of region, urban India faces greater stress with UR at 6.3% against 3.2% in rural area. Even within this, urban females face higher UR at 7.9% in contrast with 2.1% for rural females. Similarly, educated workforce (highest level of education secondary and above) faces UR of 9.5% in urban India. The biggest concern is the high unemployment rate among the youths (age 15-29 years) in the urban area at 15.8% for males and 21.6% for females. (As stated earlier, it only shows the proportion of people seeking but not getting a job. This doesn\u2019t take into consideration those are studying and therefore, not a part of job market). However, UR in case of rural female youths is lower at 8.5% who are possibly getting an opportunity through MGNREGA.<\/p>\n
However, the bigger question is – has the aggregate UR really come down? A look at the distribution across three employment group \u2013 self-employed, salaried and casual labour gives an idea of that. Between FY19 and FY22, percentage of self-employed has gone up from 57.8% to 61.5% in rural area and from 38.3% to 39.5% in urban area. While the share of salaried jobs has remained constant, casual workers\u2019 share has come down during the period. This means that casual workers have shifted to self-employment due to lack of job opportunities. However, if they had started out on their own and created another enterprise, that would be enhancing output of the economy. But it is not so. Self-employed is further divided into two segments \u2013 \u2018own enterprise\u2019 and \u2018helper in household enterprise\u2019. While \u2018own enterprise\u2019 has seen a marginal decline (implying closure of business), share of \u00a0\u2018helper\u2019 group has gone up from 13.6% to 17.5% between FY19-22. <\/em>This means existing businesses of different households have absorbed additional 4% of their family member who had no other job opportunity. This is the paradox. While UR, on paper, has come down, it is, in a way, disguised unemployment with more people getting absorbed within the household enterprise.<\/p>\n However, a positive feature is that despite the decline in quality of job, greater number of people are seeking jobs now. This is reflected in increasing Labour force participation rate (LFPR)<\/em> which refers to the percent of the population which is employed or is seeking a job. Between FY19-22, LFPR has increased from 50.2% to 55.2%, a sharp increase of 5%. This is an important development as lesser individuals seek job when they perceive those chances of getting a job are low. The survey also uses another term – Worker Population Ratio (WPR) defined as the percentage of workers in the total population. WPR for Indian economy rose from 47.3% to 52.9% during FY19-22. This means nearly 6.8 crores more persons started earning in the economy (including self-employed) between FY19-22. (Assuming population of 135 crores at the end of FY19, growing at 1% annually and 70% being above 15 years of age). With total households estimated at 32.8 crore in 2022 (4.24 persons per household), average person employed per household goes up from 1.44 to 1.57.<\/p>\n A unique characteristic of Indian economy is that female participation in the labour force is very low. LFPR for males stands at 77.2% against only 32.8% for females. Female LPFR is even worse in the urban area at 23.8% against 36.6% in rural area. As stated earlier, a higher UR for urban females implies lack of opportunities for them which pushes more females out of the labour force.<\/p>\n The survey also provide information on the earnings profile of different groups. As per the details, salaried male employees are best paid at Rs 22,200 per month in urban and Rs 16,300 in rural India, 26% lower than urban folks. However, their female counterpart receives significantly lower at Rs 17,500 in urban and Rs 11,200 in rural India, about 30% and 20% less. In comparison to salaried class, casual labour and self-employed earn much lower. A self-employed male earns Rs 18,600 in urban and Rs 11,400 in rural India, 15% and 30% less than salaried males. For females, the figures are even worse. A self-employed female earns Rs 7,600 in urban and only Rs 4,600 in rural India, both a steep 58% less than their salaried counterpart.<\/p>\n The third group, casual workers have better earnings for some of the groups. Assuming 25 days of work, a casual male worker earns Rs 11,700 in urban and Rs 9,700 in rural India, 47% and 40% less than salaried male. The female counterpart gets Rs 8,100 in urban India and Rs 6,500 in rural India, 54% and 42% less. While females are certainly underpaid, a part of the disparity is also because of the fact that females work for smaller hours. A female worker worked for 38 hours in a week, 20% less than males at 47 hours. Interestingly, an individual in rural India worked for 43.1 hours, 5\u00bd hours less than the urban counterpart.<\/p>\n The survey gives lot of other information also. For instance, self-employment forms as much as 54% of employment in rural households against only 33% in urban area. On the other hand, jobs with regular salary accounts for only 14% of jobs in villages against 42.5% in cities. As noted earlier, average salary for self-employed is nearly two-thirds that of salaried and is another reason for greater distress in rural area. In terms of dependency on agriculture, 59% of rural workers are engaged in agriculture, either working on own farm or as casual labour, with the share going up to 76% for females. The figure has come down from 61% in 2020-21 but is higher than 57.8% in 2018-19. Biggest employer in urban area is trade, hotel and restaurant accounting for 23% share followed by manufacturing with 22% share. For females, trade, hotel & restaurants accounts for only 15% of jobs, against 24% generated by manufacturing. (How about setting up some all-females hotels & restaurants?).<\/p>\n Trivia – More than 24% of females worked for more than 48 hours in a week in urban India against 17% in rural India.<\/p>\n","protected":false},"excerpt":{"rendered":" Periodic labour force survey (PLFS) for the period July\u201921 to June\u201922 (FY22) shows a decline in unemployment rate (UR) over previous years. However, amidst the continued sluggishness in economic performance, this doesn\u2019t look very convincing. So, has UR really declined or there is more to it than meets the eye. Here is a look at […]<\/p>\n","protected":false},"author":8,"featured_media":18798,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[857],"tags":[],"class_list":["post-18246","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","membership-content","access-restricted"],"yoast_head":"\n