Urban employment as the focal point

Context: The contraction of the economy raises concern on the employment situation as the shrinking sectors are those that create the maximum new jobs.

Economy and employment

• Shrinkage in potential job creating sectors: 

• Eg: construction (–50%), trade, hotels and other services (–47%), manufacturing (–39%), and mining (–23%) 
• Impact: decline in employment and a subsequent rise in unemployment.

• Reasons for this Job loss

• Reverse migration: Not clear that when and whether they would return to their places of work

• Vulnerable employment: 

• This is characterised by inadequate earnings, low productivity and difficult conditions of work that undermine the basic rights of workers. 

• According to the International Labour Organization, of the 535 million labour force in India in 2019, some 398.6 million will have poor quality jobs.

• Contraction and lack of demand in the economy

• Present situation in India

• Capital and labour are moving from low value-added activities in a sector to another sector but not to higher value-added activities.

• Leads to a situation where a large proportion of the jobs being created is of poor quality
• Intensified due to service sector-led growth.
• Outcome: high incidence of informality which continues to undermine the prospects of reducing working poverty

Way Forward

• Two focus areas:

• Generate more jobs 

• Reduce vulnerabilities by providing decent wages and some form of job security. 

• Coordination with local governments: Resource mobilisation could be enabled by the formation of local alliances, involving elected representatives, trade unions, entrepreneurs and community groups.

• Design and implement employment-intensive investment policies:  These policies should embrace the initiatives of both private entrepreneurs as well as by the government. 

• Prioritise urban infrastructure Investments: Infrastructure investments would spur employment, generate earnings, and contribute to small enterprise formation.

• Immediate launch of an urban employment scheme: It should be oriented towards building large-scale medical, health and sanitation infrastructure in cities and towns across India. 

• Expand networks of essential services

• Only NREGA is not enough: 

• Entire workforce, which has returned to the respective home States cannot be accommodated by an expanded MGNREGA or by a close substitute. 

• Thus alternative sources of employment and generating decent urban jobs is essential

Conclusion

• It is important to focus on reducing the vulnerabilities of urban informal jobs in the long run.