Unemployment

Recent
CMIE report: 23.5% unemployment in April 2020; 10% in Aug2020

Parliamentary committee: DBT transfer, urban employment guarantee scheme

Causes/challenges
jobless growth:

agrarian distress: stagnant growth, decline in public investment, subsidy

growth etc → disguised unemployment

manufacturing (typically absorbs unskilled/semi-skilled labour): limited growth,

capital intensive manufacturing

services: capital intensive, very high skill requirements, limited growth in labour
intensive (construction, healthcare, education)

<5% formally skilled

education curriculum limited success in skilling (eg: PhDs applying for menial jobs)

societal mindset against starting a business (too risky)

globalisation → increased mechanisation and automation, contractualisation

economic crises: slowdown, lockdown

huge population burden, low per capita income

PLFS (NSSO) data released after gap of 8y (meant to be every 5y); IMF: publish
data yearly

MGNREGA challenges: demand > supply, non payment of compensatory allowance

COVID-19:

factories and digitally deprived businesses shut down

demand plummeted in labour intensive hospitality, tourism

informal sector worst affected

Unemployment 1
 reverse migration

job losses among diaspora

Impact of unemployment
poverty, poor education, health, nutrition indicators

crime rate, substance abuse

less justified demands for reservation (eg: Marathas, Jats)

Steps taken
promote labour intensive industries: textile, food processing, automobile

PMKVY: skill 1 cr by 2022; compliant with 10 point NSQF

connect job seekers with job providers: Sambandh portal

apprenticeship: NAPS, Shreyas

encourage youth to startup: Startup India, Standup India, PM Yuva Sahkar

Cooperative Yojana

COVID-19: subsidy relief to firms that increase employment

Way forward
to leverage the demographic dividend, need skilled labour engaged in productive
pursuits

double aim: create jobs and skill labour

data collection should be reliable and timely

reforms in skilling initiatives: PMKVY, SSC, ITI

Low women LFPR (24%)

wages grow → families want women to stay at home, take care of family (GDP per
capita vs female LFPR is U curve)

higher enrolment rates to colleges and universities

Unemployment 2
 patriarchal society: lesser investment in her higher education and skilling;
household and caregiving burden

engaged in informal jobs often within household (eg: agriculture related) → not
counted in LFPR

mechanisation of agriculture → replaced jobs that have been geared towards

females

sexual harassment at work, limited public transport and harassment on roads

difficult to get back to work post maternity

glass ceiling at work

maternity benefits, #MeToo → women will be hired and trained less

Measures of unemployment
Current daily status: allots 0/0.5/1 for last 7 days; result: person-days of
employment, extent of employment

Weekly status: employed if >1h/d work in past 7d (tracks chronic and seasonal
unemployment)

Usual status: employed if had work for >50% in past year (tracks long term
unemployment)

Self employment
40-50% labor force self-employed

benefits:

challenges:

dominated by agriculture alone,

unskilled and earn far less compared to salaried people (₹8k/m)

majority individually working (rather than employing others)

most are unregistered, make up informal sector

Initiatives: Mudra, Standup India, social security coverage

Unemployment 3