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.