Urban employment as the focal point

The Hindu     15th September 2020     Save    
QEP Pocket Notes

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.
QEP Pocket Notes