The 2019-20 Periodic Labour Force Survey (PLFS), which was launched final week by the National Statistical Office (NSO) reveals a fall in unemployment fee from 5.8% in 2018-19 to 4.8% 2019-20. Since PLFS follows a July-June reasonably than the fiscal yr (April-March) interval, the 2019-20 report contains the 68-day lengthy full lockdown interval.
Does this imply that there was no misery in labour markets throughout the lockdown?
An HT evaluation means that the headline employment numbers in the newest report may be deceptive, and a cautious studying of the report and the unit-level information does present indicators of pandemic pushed misery in labour markets. Here are 5 charts which elaborate this argument.
What do the headline numbers present?
The three most necessary numbers in the PLFS report are labour pressure participation fee (LFPR), work participation fee (WPR) and unemployment fee (UR).
LFPR is the share of inhabitants in a given age group which is both working or on the lookout for a job. WPR is the share of inhabitants which is definitely working. UR is the share of unemployed individuals in the labour pressure.
There have been three PLFS studies to date, the newest one overlaying the interval from July 2019 to June 2020. A comparability of the three studies reveals that regardless of LFPR being the highest in 2019-20, unemployment fee was the lowest in the final three years. But these numbers conceal greater than they reveal. Here is why.
The pandemic compelled a distress-driven rise in rural employment
Images of 1000’s of migrant staff strolling again to their villages after the lockdown are amongst the most graphic recollections of financial misery throughout the pandemic. The 2019-20 PLFS affords first official proof of this misery.
In preserving with established knowledge on financial transformation, the share of agricultural employment in India has been falling regularly. 2019-20 was an exception to this pattern when agricultural employment really elevated from 42.5% in the 2018-19 PLFS to 45.6% in the 2019-20 PLFS. A sector-wise comparability of absolute variety of jobs reveals that agriculture greater than compensated for the job loss in each sector of the economic system in the April-June 2020 interval.
The image turns into even clearer as soon as we have a look at the quarterly numbers for April-June 2020 and April-June 2019. On a year-on-year foundation, city India noticed a discount of 11.05 million jobs in the April-June 2020 interval and rural areas noticed the addition of 14.7 million jobs.
However, unemployment fee — or the share of individuals on the lookout for jobs who didn’t discover one — elevated in each rural and city areas. As is clear, unemployment fee elevated extra sharply in city areas (from 8.9% to twenty.8%) than in rural areas (from 8.7% to 12.2%). The purpose unemployment numbers didn’t improve on an annual foundation regardless of a pointy rise throughout the lockdown months is straightforward. Unemployment charges had decreased sharply in the July-September and the October-December quarters, and to a lesser diploma even in the January-March quarter.
That there was misery in city job-markets was apparent from the quarterly PLFS report for April-June 2020, launched in March this yr which covers solely city areas. Where the annual report actually affords an perception is the rise in what appears to be distress-driven rural employment.
What occurred to wages throughout the lockdown?
The quick reply is that they fell sharply. PLFS provides wage information for 3 sorts of employment classes: common wage/salaried, informal staff and self-employed.
The self-employed have been the worst hit throughout the lockdown, whereas common wage staff suffered a contraction solely in rural areas. The plight of self-employed staff was the worst in city areas, the place actual wages grew to become 3/4th of what they have been a yr in the past. While common wage staff do present a rise in wages at the nationwide degree, they solely account for a couple of quarter of complete staff in the PLFS information.
Underemployment elevated as properly
To make certain, each employment and wage statistics don’t seize the precise stress in labour markets after the pandemic. This is borne out by one other statistic in PLFS; the common variety of hours for which work was out there to totally different form of staff.
An common employee labored for 46.5 hours in every week in the April-June 2019 interval. This got here right down to 37 hours in the April-June 2020 interval. Urban areas noticed larger discount as a result of each common wage and self-employed had massive lower in hours labored. Self-employed have been largest losers in city areas, whereas common wage-earning staff have been the largest losers in rural areas.
“An unprecedented improve in share of agricultural employment underlines the rise in misery pushed employment throughout the pandemic”, stated Himanshu, an affiliate professor of economics at Jawaharlal Nehru University. “It is a well known proven fact that extra folks be part of the workforce during times of financial misery to compensate for the lack of incomes and the state of affairs should have grow to be worse given the proven fact that the authorities supplied little or no by way of direct assist throughout the pandemic”, he added
All numbers besides annual numbers are based mostly on present weekly standing (based mostly on a 7-day recall interval). The annual numbers are based mostly on 365 day recall.
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