In a comprehensive assessment of India's workforce, the Azim Premji University's Centre for Sustainable Employment has recently unveiled the "State of Working India 2023" report. This extensive report delves into key aspects of India's labour market, shedding light on unemployment rates, gender-based earnings disparities, intergenerational mobility, and caste-wise workforce dynamics.
Faster Structural Change: A Glimpse into Job Creation Trends
One notable finding in the report is the transformation in the nature of employment in India. After decades of stagnation, the share of workers engaged in regular wage or salaried work began to increase in 2004. This growth, from 18% to 25% for men and 10% to 25% for women, resulted in an annual creation of approximately 30 lakh regular wage jobs between 2004 and 2017.
Astonishingly, this number surged to 50 lakh per year between 2017 and 2019, reflecting a rapid structural shift. However, since 2019, the pace of regular job creation has slowed down, attributed to both economic growth deceleration and the disruptive effects of the COVID-19 pandemic.
Gender-Based Earning Disparities Reduced: Progress for Women
India's gender-based earning disparities have seen a noteworthy reduction over the years. In 2004, salaried women workers earned just 70% of what their male counterparts earned. By 2017, this gender pay gap had decreased, with women earning 76% of what men did.
Encouragingly, this figure remained consistent until 2021-22, signifying positive strides towards gender pay equity.
Unemployment Rates and Education: A Stark Divide
While the overall unemployment rate decreased to 6.6% in 2021-22 from 8.7% in 2017-18, the report highlights a concerning trend among young graduates under the age of 25, with an alarming unemployment rate of 42.3%.
Conversely, individuals completing higher education boasted a more favourable unemployment rate of 21.4%. Bridging this educational unemployment gap poses a significant challenge for India's workforce.
Women's Workforce Participation: Pandemic-Induced Shifts
In the wake of the COVID-19 pandemic, the report reveals that 60% of women have transitioned into self-employment, compared to 50% before the pandemic. However, this increase in workforce participation was accompanied by a decline in self-employment earnings, reflecting the adverse economic impact of the pandemic on women in the labor force.
Intergenerational Mobility: Striving for Progress
The report highlights a positive trend in intergenerational upward mobility, indicating socio-economic progress. Nevertheless, this upward mobility trend appears weaker for workers from Scheduled Castes and Scheduled Tribes compared to general castes, underscoring the importance of addressing socio-economic disparities.
Caste-wise Workforce Dynamics: Changing Landscape
Caste-wise workforce participation has evolved over the years. Notably, the share of Scheduled Caste (SC) workers in casual wage work has significantly decreased, albeit more dramatically in the general caste category. In 2021, 40% of SC workers were engaged in casual employment, contrasting with just 13% of general caste workers.
Additionally, around 22% of SC workers were regular wage workers, as opposed to 32% of general caste workers, pointing to shifting dynamics in the workforce.
Economic Growth vs. Employment Generation: A Complex Relationship
The report illuminates an intriguing paradox where economic growth has not translated proportionately into job creation. There is a decline in the capacity to generate jobs as GDP increases, raising questions about the effectiveness of transitioning from agriculture to other sectors in ensuring salaried employment opportunities.
Despite aspirations for salaried employment, a significant portion of salaried work remains informal, lacking proper contracts and benefits. This shift towards informality underscores the importance of improving job quality and worker protections in India's labor market.
Factors Influencing Graduate Unemployment: An Analytical Lens
The report suggests that graduate unemployment may be driven by high aspirations and wage demands that the current economic climate cannot meet. Furthermore, graduates from well-off households may have the privilege of remaining unemployed, highlighting the complex interplay of socio-economic factors in shaping employment patterns.
The "State of Working India 2023" report provides a comprehensive overview of India's labor landscape, emphasizing the need for targeted policies to address issues like gender pay disparities, youth unemployment, and caste-based inequalities. As India navigates these challenges, the report serves as a valuable resource for policymakers and stakeholders seeking to shape a more inclusive and equitable labor market for the nation's workforce.