Annual PLFS Report: Increased Vulnerability and Erosion of Rights
Sanjay Roy
THE latest annual report of Periodic Labour Force Survey, 2021-22 published by NSSO, Government of India draws attention to many perennial problems that India seems to be facing in the employment front. True indeed that the annual unemployment rate has marginally declined compared to the pandemic period but the structural concerns such as high rates of youth unemployment, high unemployment rates within the educated, increased vulnerability due to rising self-employment and erosion of rights of regular salaried workers, continue to remain as dark spots in India’s labour market. This is even more important to note that the revival in terms of growth during the post pandemic period is not being reflected by higher quality of employment particularly in terms of nature and conditions of employment and in regard to labour force participation rates. The monthly unemployment rate time series of CMIE however shows a rise in unemployment rate in March 23 at 7.8 per cent turning out to be higher than 7.1 per cent recorded in January 2023 and 7.5 per cent in February 2023.
UNEMPLOYMENT RATE
Unemployment rate measures the ratio of number of people out of work even if they are seeking jobs. Hence it is a compound effect of the number of people seeking jobs and the number of people who are unable to get any. In countries such as India, labour force participation rate (LFPR) is also an important indicator of the labour market. It measures the ratio of people within the working age population seeking jobs. In countries where people hardly had any alternative sources of income to opt out of the labour market, a low LFPR simply indicates that people are discouraged by the existing probability of getting jobs and hence are opting out.
According to the current PLFS annual report 41.3 per cent of the people within the working age group in India participate in the labour market. This is less than the labour force participation rate (LFPR) of the previous year which was 41.6 per cent in 2020-21. In fact, during the post-Covid scenario, the LFPR in 2019-20 was 40.1 per cent which improved in 2020-21 but then suffers a decline. It is worrying because even if the economy is recovering from pandemic and war driven disturbances but it could not generate much hope in terms of availability of jobs.
The decline in the LFPR compared to previous year is seen in the rural sector which has dropped from 42.7 per cent in 2020-21 to 42.2 per cent in 2021-22. There is some improvement within the 15-29 age group as LFPR increased from 41.4 per cent in 2020-21 to 42 per cent in 2021-22. Taking rural and urban together, labour force participation rate declined both for male and female. In the urban segment, for the females, LFPR marginally improved while in rural India it suffers a decline. Unemployment rate in 2019-20 was 4.8 per cent which has come down to 4.2 per cent in 2020-21 and then 4.1 per cent in 2021-22. Unemployment shows a sharper fall in urban areas but in rural India the decline has been marginal. Within the age group 15-29 years, that is for the young job seekers, unemployment rate continues to be very high, 12.4 per cent in 2021-22.
In the urban areas, unemployment rate within the young population turns out to be 17.2 per cent and in rural areas it is 10.6 per cent. This unemployment rate within the urban youth although being lower than the previous year’s figure of 18.5 per cent but it is still very high. A very high unemployment rate within young people and that being much higher than the average unemployment rate simply indicates that younger people are relatively disfavoured in the job market. Within young urban male, current unemployment rate stands at 15.8 per cent and for females it is as high as 21.6 per cent.
The other worrying trend that continues is the high unemployment rate among relatively educated people. Those who have attained education up to secondary levels and above, unemployment rate is 8.6 per cent in 2021-22 which is of course lower than the previous year figure of 9.1 per cent but it is still very high. The situation is worse in the urban segment in which unemployment rate for this education category is as high as 9.5 per cent and for females it is even higher that is 14.3 per cent.
The current scenario primarily reflects the fact that although unemployment rate which is a broad measure has marginally come down but there has been not much improvement in LFPR, nor in terms of job availability for the younger people and also for those who are relatively educated. The widening gap between average unemployment rate and that for the educated lot indicates that Indian labour market has not adequately graduated to absorbing relatively more educated workers. It is important to create jobs for all and as the skill requirement increases the average education level of working population increases with requirements of more educated workforce.
INCREASED VULNERABILITY
The annual report also points to the fact that currently 55.8 per cent of persons employed in India are self-employed. The share of self-employed within the workforce has increased from 53.5 per cent in 2019-20 while the share of regular wage/salary workers has declined from 22.9 per cent in 2019-20 to 21.5 per cent in 2021-22. Of the total share of self-employed in 2021-22, 38.3 per cent are own-account-worker-and-employer meaning they work on enterprises that do not hire any worker and 17.5 per cent are helper in household enterprises. The share of such helpers who are largely unpaid has increased from 15.9 per cent in 2019-20 to 17.5 per cent in 2021-22.
The rise in the share of self-employment and the decline in that of regular workers in countries such as India is a sign of increased vulnerability of the workforce. Apparently self-employment is posed as work with greater autonomy as the worker is not selling the labour power to someone else, but effectively the self-employed worker is tied into capital relations and can only valorise the labour involved by mediating through market. In fact, the payment of wage to a hired worker is independent of the sale of the produce at least in the medium run but for the self-employed the return to labour can only be realised once the produced goods or services are being sold. And the price realised is completely dependent on the fluctuations of market. Hence barring a few in the upper echelons of small business and highly skilled professionals, the self-employed are more vulnerable in developing countries such as India compared to wage workers. This is also evident from the fact that the average gross earnings of self-employed have been estimated to be Rs 12,186 a month during April-June 2022 which is much less than average monthly income of regular wage or salaried workers that is Rs 18,585 during the same reference period.
EROSION OF RIGHTS
Finally, the PLFS report manifests the erosion of workers’ rights and the dismal picture of entitlements of social security even within the regular salaried workers. In India as high as 62 per cent of the regular wage and salaried workers have no written job contract, 49.2 per cent are not eligible for paid leave and 53 per cent are not eligible for any social security benefit. Only 21.5 per cent of the total employed in India is regular wage or salaried workers and more than half of them are not entitled to any social security. A vast number of workers are self-employed and casual workers who are completely deprived of any protective legislation or entitlement. It is important to note that sometimes registration to a particular scheme or enrollment to any government record is ridiculously shown as a mark of increasing formalisation within the workforce. But formalisation cannot be reduced to mere enrollment in any government record. It is about institutional acknowledgement of collective voice and rights vis-à-vis employers and that seems to be declining even within the formal sector. In other words, the latest labour force survey although shows a decline in the unemployment rate but in terms of labor force participation rate and the high rate of unemployment within the youth and educated as well as for women and the rising share of self-employed and unpaid household helper within the workforce are symptoms of a depressing job scenario.
