15 Oct 2023

Has Quality Of Employment Worsened In Last One Year? Is India Witnessing Decline In Regular & Salaried Jobs?

New Delhi: In 12 out of the 21 major states and Union Territories, the quality of employment has worsened, according to the latest Periodic Labour Force Survey (PLFS) released by the National Statistical Office. 

Between July 2022 and June 2023, there was a decrease in the percentage of workers in regular or salaried positions as compared to the previous year. During this period, self-employment and casual work have seen an uptick in these states.

Assam witnessed highest decrease in proportion of salaried workers

During the period from July 2002 to June 2023, Assam witnessed highest decrease in the proportion of salaried workers, which fell by 8.7 percentage points, declining from 19.5 percent in the period between July 2021 and June 2022 to 10.8 percent.

Subsequently, Delhi saw a decrease of 6.2 percentage points, followed by Uttarakhand with a 5.2 percentage point decline, and Chhattisgarh, which experienced a 1.6 percentage point reduction.

Typically, regular wage or salaried employment, where workers receive fixed wages at consistent intervals, is considered a more desirable form of work compared to casual labor or self-employment, which includes unpaid household labor, mainly in agriculture, or owning a small informal business.

Decline in salaried workforce at national level

At the national level, the proportion of workers engaged in regular wage employment also declined from 21.5 percent to 20.9 percent during the same period.

This drop in employment quality is occurring even as the country's unemployment rate reached a six-year low of 3.2 percent, and the labor force participation rate (LFPR) reached its highest level (57.9 percent) since the National Statistical Office (NSO) began publishing the annual survey in April 2017.

Santosh Mehrotra, a visiting professor at the University of Bath, noted that contrary to popular belief, labor markets have not fully rebounded, as wage employment remains significantly below pre-pandemic levels, leading to an increase in self-employment. 

Mehrotra said the slight increase in the share of people working in agriculture during this period suggests distress in rural labor markets, with the share of individuals engaged in agriculture rising from 45.5 percent to 45.8 percent.

Increase in regular wage workers in some states

Despite worsening in quality of  employment at national level, some states showed the opposite trend and these states show increase in regular wage workers. Among the states, Punjab witnessed the most significant increase of 2.5 percentage points in its regular wage workforce, reaching 33.4 percent, followed by Haryana (2.2 percentage points), Kerala (2 percentage points), and Telangana (1.9 percentage points).

Mehrotra commented, "The decline in wage employment over the past year and the corresponding rise in labor force participation indicates that more individuals are entering the labor market, yet the economy is struggling to create sufficient quality jobs for them. This is pushing them toward self-employment, whether as unpaid household labor or operating small businesses."

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