Economy
Data dive: What latest govt report reveals about jobs, wages, and work hours
Summary
- India’s unemployment rate stood steady at 3.2% in 2023-24. But the overall jobless figure masks many problems present in the labour market from employment structure to earnings to work hours. Mint explores the latest data and longer trends
Amid the debate about whether India’s growth story has failed to create enough jobs, the Periodic Labour Force Surveys (PLFS) show a significant decline in the unemployment rate over the years. It nearly halved to 3.2% in 2023-24 (July-June) compared to 6.1% in 2017-18. However, this decline is just one part of the story; the others are increased self-employment, especially among those who work as unpaid helpers in household enterprises, a huge gender gap in earnings, and long working hours for regular wage and salaried employees. Mint explores the trends in India’s jobs market:
Educated stress
The PLFS report for 2023-24, released this week, shows that the unemployment rate for those aged 15 and above was steady at 3.2%. It has declined significantly over the years. Even in the years hit by the pandemic—2019-20 and 2020-21—the unemployment rate was low at 4.8% and 4.2%, respectively.
However, the overall unemployment rate masks the stress in the job market for more educated Indians. While the unemployment rate for those who have studied until secondary school or above has also declined from double digits in 2017-18, it remained quite elevated at 7.1% in 2023-24. The overall figure has been pulled down mainly by individuals who are not literate or literate only up to the primary level, for whom the unemployment rate is less than 1%. The unavailability of high-quality jobs has resulted in high unemployment rates for more educated, said experts.
Question of quality
The unemployment rate has declined, suggesting availability of more jobs in the market but the quality of employment has not improved. In fact, it has deteriorated since the pandemic as people began relying more on self-employment. Under self-employment, ‘own account worker, employer’ reflects self-owned small businesses, while ‘helper in household enterprise’ is mostly unpaid help within the household.
The share of ‘own-account worker’ has increased marginally from 38.6% in 2017-18 to 39.0% in 2023-24. The dramatic increase in the share has come from the ‘helper in household enterprise’, which rose from 13.6% in 2017-18 to 19.4% in 2023-24. The share of salaried jobs has recovered slightly in 2023-24 after having declined since 2017-18.
“It is a concerning thing because even after a strong growth rate of about 8%, the employment structure has not changed," said Amit Basole, a professor at Azim Premji University.
Paras Jasrai, senior economic analyst at India Ratings & Research. concurred. "Since India is a growing economy and we want our consumption levels to be higher, people need to be employed in jobs with regular salaries," Jasrai said.
Also read: India’s jobs crisis: How dreams of rural youth outpace the labour market
Female force
For decades, the low female labour force participation rate has worried policymakers and economists. However, the PLFS data shows a significant rise in women’s participation rate from 17.5% in 2017-18 to 27.8% in 2022-23 to 31.7% in 2023-24. But, once again, women are mostly self-employed and the share in salaried jobs or casual labour has shrunk. Self-employment has always dominated women’s labour force participation due to the flexibility in work hours and option to work from home or close to home, it has increased significantly in recent years.
The share of self-employment among women shot up from 51.9% in 2017-18 to 67.4% in 2023-24, while the share of salaried jobs shrank from 21.0% to 15.9% and casual labour from 27% to 16.7%. However, the share increase of ‘helper in household enterprise’ is less dramatic, rising from 31.7% in 2017-18 to 36.7% in 2023-24. In comparison, ‘own account worker, employer’ rose from 20.2% to 30.7%.
Pay pain
Even as self-employment has gained momentum in recent years, salaried jobs remain the best-earnings category, with the average pay (monthly or for 30 days) about 56% higher than self-employment and 65% higher than casual labour in 2023-24.
However, the gender pay divide is quite significant in this category as well, with women earning about ₹75-76 per ₹100 earned by men. Among the other two categories, self-employment leads to better earnings than casual labour, but the gender pay divide is the highest for self-employment.
Self-employment, on average, led to an earning of ₹13,279 for a 30-day period in 2023-24, while casual labour's average earning was ₹12,540. However, women earned earned ₹65-66 per ₹100 earned by men in casual labour, while the earning was just ₹34-36 per ₹100 earned by men in self-employment. While the increasing presence of women in the labour market is a positive trend, the rise dominated by self-employment, which has a poor pay parity, may not improve their conditions too much.
Also read: Shrinking informal economy rings alarm bells for jobs in India
Clocking hours
Of late, questions are being raised about long work hours in the formal sector, leading to stress and work-life imbalance. The latest report reveals that while salaried jobs offer better pay and are of higher quality, their employees work longer hours. While a 40-hour work week is globally considered vital for the well-being of the workers, salaried employees ended up working 49.3 hours per week in 2022-23 and 48.8 hours in 2023-24.
The situation is worse for men, who clocked 51-52 hours in the past two years compared to 43 hours clocked by women. The trend is more in line with standards for self-employment and casual labourers, who worked 40.4 hours per week and 40.5 hours in 2023-24, respectively. However, the fewer working hours in casual labour and self-employment have less to do with standard practices and more to do with underemployment, in which more workers crowd into these sectors but aren’t fully employed or paid, experts said.
