The greatest success has been in agriculture and services. Within agriculture, we obtain results that suggest it is livestock and fisheries that may have seen the greatest rise. (C R Sasikumar)
Employment numbers have always been surrounded by many disagreements; perhaps more so in recent times as greater research, rising complexity of work and economy, and poor data made consensus and alignment difficult. The problem, at least in the public discourse, is that the ups or downs in employment figures are frequently and wrongly accompanied by opinions rather than robust research that can identify the underlying causality.
Using NSSO data from 1983 to 2023, we focused on analysing employment figures and their changing nature, as well as disaggregating and unpacking them. We find that since 1983 for every sub-period under consideration, principal employment has grown. There has been no period that has seen any jobless growth. Principal employment measures those working for the bulk of the year as opposed to subsidiary employment, which is predominantly part-time, of shorter duration and is in addition to the principal activity of a person. We, therefore, do not include it in our measure of employment at all and argue that nor should anyone else.
In that period, the fastest increase in employment has been from 2017-18 to 2022-23 when about 80 million additional employment was reported. This translates to about 3.3 per cent growth annually, much higher than population growth during the period. We also find that this growth is very well spread — rural and urban sectors, manufacturing, agriculture, construction and services, age segments, women, etc.
Interestingly, the growth has been highest for women during this period, by more than 8 per cent annually. Also, we find that older citizens (age 60 plus) are entering employed status in larger numbers, at about 4.5 per cent annually. Why are greater numbers of women and older people working? There could be different arguments for this. The most common argument we hear is that there is increasing distress and women and older people have no choice but to work. But there are other possibilities as well. With falling fertility rates, improved access to water, energy, etc., those involved in care- and home-related work now have greater flexibility if they choose to work. In the case of older cohorts, we find that employment in this segment has been growing since the 1980s and could also be reflecting the greater lifespans.
Among economic sectors, though manufacturing and construction grew well at 3.4 and 5.9 per cent annually, higher growth has been achieved in earlier years as well. However, the greatest success has been in agriculture and services. Within agriculture, we obtain results that suggest it is not so much the cropping sector but livestock and fisheries that may have seen the greatest rise.
A characteristic of this growth, however, is that of total growth in employment of 80 million, a large part or 44 million is for own account workers and unpaid family workers. These are typically self-employed and this form of employment is not necessarily seen as entrepreneurial but a fallback option for those who do not have any other avenues. But note that this is the same segment that was the beneficiary of the massive PMMY scheme (Mudra) that disbursed slightly less than Rs 23 lakh crore among 380 million accounts in the period starting 2015-16 until the end of 2022. Therefore, if there is growth in self-employment, some of it presumably is due to the large government transfers to this cohort. At the same time, such a large increase in Direct Cash Transfers in this period may have also contributed to greater employment opportunities. Deciphering the underlying cause is key to understanding whether growth in this segment is desirable or can be sustained.
We also find a relative stagnation in aggregate wages and salaries in recent years. For the period 2017-18 and 2022-23, the average annual growth of salaries and wages is at 6.6 per cent in nominal terms but barely 1.2 per cent over five years after being corrected for inflation. In other words, while in the aggregate we don’t find any wage distress, we also do not see a great improvement in living conditions. This could be for many reasons — if such large numbers enter the workforce, some dampening of wages and salaries is to be expected. At the same time, it could also reflect a deeper issue of stagnating labour productivity.
Whether it is government welfare programmes, changing economic structure, changing demographic structure, or distress that is causing the surge in employment requires more careful analysis. To us, it is evident that there are many contradictory stories playing out simultaneously where employment growth is concerned. Simplistic narratives will do us all a disservice.
The writers work with CSEP. The views expressed are personal
