There has been an absolute decline in employment – number of people with jobs – between 2013-14 and 2015-16, possibly for the first time since independence, a new study published in the EPWjournal says. Three critical sources of jobs – construction, manufacturing and IT services – performed the worst, the paper by Vinoj Abraham of the Centre for Development Studies, Thiruvananthapuram, said. The construction sector is India’s largest informal sector employer.
The author combined data sources from three flagship labour market surveys– The Labour Bureau’s Employment Unemployment Surveys (LB-EUS) the Quarterly Quick Employment Surveys (QES) and the Revised QES– for recent periods to show that while there has been an absolute drop in the unorganized sector, in the organized sector, the rate of growth of employment has tanked.
In a novel technique, the author uses both Labour Bureau’s Employment Unemployment Household Surveys and the Quarterly Employment Surveys of Enterprises to get “evidence” from both “supply and demand side”. While “demand side” is a term economist use to denote employers, supply side refers to job-seekers.
According to the Labour Bureau’s Employment Unemployment Surveys, total employment in the country shrank by about 0.4 per cent annually between 2013-14 and 2015-16 (going by the usual principal status criterion for those 15 years and above), a number which corresponds to 37.4 lakh people being unemployed. Usual principal status denotes a person who has been unemployed relatively for a longer period of time.
The study quotes the QES survey to state a “dismal picture of employment creation in India”. After the October quarter in 2011, in no quarter were more than 2 lakh people employed. According to labour ministry data, nearly 12 million Indians enter the workforce in India every year. In three of the 12 quarters during 2014 and 2016, the situation worsened due to an “absolute decline in employment”.
The study states that the decline in job creation has been worst in the past three years. In the two years between March 2010 and March 2012, employment in the select sectors rose by 18.15 lakh, while in the next two years between March 2012 to March 2014, employment creation slowed down to just 6.2 lakh. In the following 19 months from March 2014 to December 2015, employment creation further slowed down to 5.92 lakh.
Between March 2014 and December 2015, average monthly employment creation declined to 30,000 jobs. And between March–December 2015, the average employment creation fell to its worst levels: 8,000 jobs per month.
“Perhaps this is for the first time in independent India that we have an absolute decline in employment,” Abraham writes.
Abraham also takes into account the organised and unorganized sectors. He says that the picture which emerges is one “of an absolute decline of employment in India, with much of it probably in the unorganised sector, while the organised sector is seeing a sharp decline in the growth of employment.”
Abraham says India’s labour market is facing a “crisis” with the employment rate stagnating across almost all sectors. Indicators have worsened since mid-2014 and the “weakest among the working class are bearing the brunt of the employment decline,” the study said.