Our labour force survey shows a structural crisis of employment

Context: Joblessness is bad enough, but underemployment has been worsening as the jobless return to farms.

Unemployment crisis in India: Inferences from a third annual round of Periodic Labour Force Survey (PLFS) of India’s National Statistical Office (NSO)

• Rise in unemployment: The 2017-18 estimates had shown a sharp rise in unemployment compared to findings of the NSO’s employment-unemployment surveys until 2011-12.
  • Number of workers registered a 15-million decline between 2011-12 and 2017-18.
  • Even though the unemployment rate shows no change at 8.8%, the number of unemployed increased by 4 million from 2018-19.
  • Number of hours worked – A better indicator: Showed a sharp decline across population groups, confirming a lack of employment opportunities even for those who got some work.
• Worsening of India’s employment structure: 
  • A shift towards agriculture: While India has witnessed a decline in agriculture’s share of overall employment since the 1970s, it was only after 2004-05 that the absolute number of workers started falling. This fall was fairly rapid and continued until 2017-18.
    • In 2018-19, the number of workers in agriculture was unchanged from the year before. But the 2019-20 estimates now report a sharp 32 million rise.
    • This is a serious concern as reduced transition of workers to efficient sectors negatively affects economic growth.
• Gender concerns: Higher female employment at the bottom end of the pyramid, along with a shift of workers back to agriculture
• A majority of workers turned to self-employment as regular employment declined.

Conclusion: The PLFS estimates are an early warning of a structural crisis. The pandemic slowdown may be reversed in the upcoming quarters, but the structural retrogression is unlikely to be reversed without the kind of economic growth that’s accompanied by the creation of productive and remunerative jobs.