India Need More Meaningful Employment

The annual Periodic Labor Force Survey (PLFS) data for July-June 2022-23 released on Monday showed that the overall unemployment rate has fallen to a six-year low of 3.2 per cent. 

Other things being equal, the decline in the unemployment rate and the increase in the labor force participation rate indicate that jobs are being created in the economy.

Yes, questions can definitely be raised on the quality of employment. The labor force participation rate for people above 15 years of age has increased from 49.8 per cent in 2017-18 to 57.9 per cent in the latest survey. 

There has been improvement in the figures even at the current weekly level. There is still a lot to be desired in terms of quality.

For example, if we talk about non-agricultural sectors, the percentage of people employed in proprietary and partnership setups, considered unorganized, has increased from 71.4 percent in 2020-21 to 74.3 percent in the latest survey. 

Although there has been some improvement in the situation, about 60 percent of the employees do not have any written contract for their work. 

Unorganized sector employment is usually in small enterprises where work is not done on a large scale. As a result the salary is also very low.

There are many long-term issues when it comes to job creation in India, both in terms of quality and quantity. 

One problem has also been the low participation of women in the labor force. 

Coincidentally, the latest PLFS data was released on the same day the Nobel Prize in Economics was announced for Harvard University’s Claudia Goldin.

She was given the award for ‘increasing our understanding of women’s labor market outcomes’. 

According to the latest data of PLFS, if the labor force participation of women in urban and rural areas is combined, it will increase from 23.3 percent in 2017-18 to 37 percent in 2022-23 in cases above 15 years of age. 

Whereas in the latest survey the comparative figure of men was 78.5 percent.

Theoretically, the increase in women’s participation is encouraging, but a recent study said that the increase in women’s labor force participation rate may be the result of difficult circumstances. 

It is possible that a large number of women are becoming part of the labor force to increase the income of families affected by the pandemic.

In such a situation, the policy challenge for the government will not only be to create more meaningful employment but will also be to create conditions that will prove helpful in increasing labor force participation. 

Increased participation will help in increasing productivity and growth. In this context, although Professor Goldin’s contribution covers 200 years of American history, it also has useful lessons for all countries, including India.

For example, she has said that economic growth in itself does not reduce the gender gap in the labor market. 

If social and institutional barriers keep women away from the labor market, then emphasis on female education alone will not automatically reduce the gender gap. 

Motherhood is also a big reason in gender conservative societies. 

Apart from this, women’s aspirations regarding the future also play an important role.

In such a situation, the biggest task before Indian policy makers is to create more meaningful employment. 

To create employment, especially in the organized sector, which encourages increased participation of women in the labor market. 

India’s service-based economy is perhaps best placed to achieve this. 

Resolving issues related to social environment, including women’s safety, will also create a favorable environment for increasing women’s participation in the labor force.

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