India’s job growth — rising numbers, falling wages

The NSSO released the annual Periodic Labour Force Survey (PLFS) report for 2022-2023 (July-June) on October 9.

The PLFS claimed that the all-India all-person labour force participation rate (LFPR), which measures the proportion of persons aged 15 years and higher who worked or were looking for jobs, was 57.9 per cent, rising from 49.8 per cent in 2017-2018, the year PLFS surveys began.

The worker population ratio (WPR), which measures the ratio of workers employed to the total workforce rose similarly from 46.8 per cent in 2017-2018 to 56 per cent in 2022-2023.

The LFPR increase by a whopping as 8.1 per cent in five years implies growth of about 80 million workers in India if you take the total working age population at 1 billion.

On the face of it, this massive increase in workforce is quite impressive. But, is it really so? Where has the employment grown?

Disproportionate concentration among rural women

The LFPR, for males, rose from 75.8 per cent in 2017-2018 to 78.5 per cent in 2022-2023 — a nominal increase. The LFPR for females, however, rose magnificently from 23.3 per cent in 2017-2018 to 37 per cent in 2022-2023 — an increase of about 60 per cent.

India’s estimated working-age population of 1 billion divided into a 52:48 ratio between male and female, at the above-noted growth rates, yields a male workforce increase of 14 million and a female workforce increase of a whopping 65.8 million workers.

There is an interesting rural dimension in the workforce increase.

The urban all-person LFPR increased from 47.6 per cent in 2017-2018 to 50.4 per cent in 2022-2023 — by 2.8 per cent. The rural all-persons LFPR, however, increased from 50.7 per cent to 60.8 per cent in this period — by an astounding 10.1 percentage points.

In rural areas, the male LFPR increased from 76.4 per cent to 80.2 per cent. The female LFPR in rural areas increased massively from 24.6 per cent to 41.5 per cent — an increase of 68.7 per cent.

The urban areas are growth engines and job providers in the industrial-service age, whereas the rural areas have been shedding jobs for want of stagnation in agriculture.

The PLFS data, however, would like us to believe that India’s rural areas are creating massive jobs, and, that too, for female workers.

Interestingly, the Centre for Monitoring Indian Economy (CMIE) also conducts regular employment surveys. The CMIE has not found any evidence of any big increase in rural female workforce participation rate.

The PLFS data raises a big suspicion: What kind of jobs are our rural female workers getting into?

The sting in the tail

The PLFS provides details (e.g. Statement 6 in 2022-2023 PLFS and Statement 14 in PLFS 2017-2018) of the ‘employment type’ — the kind of jobs the workers are employed in.

The workers are divided into three principal occupations — self-employed, regular wage/salary, and casual. The self-employed are further subdivided into two classes: a) own account workers and employers, and b) unpaid helpers in household enterprises.

It is the unpaid helper in the household enterprises where the bulk of job increase is occurring.

In 2017-2018, 13.6 per cent of all workers were employed as an ‘unpaid helper in household enterprises’. This class of workers have come to occupy a larger share of the workers since then and has been growing steadily. By 2019-2020, their proportion rose to 15.9 per cent. In 2022-2023, their proportion reached an all-time high of 18.3 per cent.

The unpaid helpers in the household enterprises witnessed an increase of 4.7 percentage points over the 13.6 per cent in 2017-2018 — an increase of 35 per cent over the base.

At this proportion, in the total worker base of 580 million, 106 million are unpaid helpers in ‘household enterprises’ in 2022-2023! This wage-less group of workers grew by about 28 million between 2017-2018 and 2022-2023 — almost all of them women.

Unpaid female workers in rural areas are not only shouldering the responsibility of all the household work but are increasingly showing up as unpaid helpers in the PLFS, thereby boosting India’s workforce participation growth.

Disguised unemployment

The same PLFS tables inform that the female self-employed workers (which includes unpaid helpers) earned from Rs 4,725 to 5,071 in the last 30 days of the survey period. The average casual female worker earned between Rs 259 to Rs 287 per day, or about Rs 7,098 for 26 days per working month (at a of midpoint Rs 273). The females with regular wage/salary jobs earned Rs 10,368 to 13,825 per month.

The self-employed female workers earned the lowest only because a good proportion thereof was employed as unpaid helpers in family enterprises, which is nothing but a euphemism for disguised unemployment.

Real, not statistical, job growth

Given the above facts from the PLFS itself, there is no real reason to believe that India’s workforce participation and employment rates have grown materially.

Let us work to create real job and income growth, not the statistical growth, for our teeming millions.

(Subhash Chandra Garg is former Finance & Economic Affairs Secretary, and author of ‘The Ten Trillion Dream’ and ‘We Also Make Policy’.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.