Labour force survey

Unemployment crisis revealed

Print edition : June 08, 2019

A roadside tea vendor sells tea amid a protest rally demanding that the government address the problem of unemployment, in New Delhi on February 7. Photo: AP

The government releases its report on the labour force after a five-month delay, confirming the serious unemployment crisis in the country.

IN the run-up to the Lok Sabha election, long before the dates were announced and when the government still had a few months in the saddle, an unseemly controversy arose over the alleged suppression of the findings of the annual Periodic Labour Force Survey (PLFS) that painted a grim picture of the employment situation in the country.

The findings, sections of which found their way into the media, showed a disproportionately high rate of unemployment among all social groups. The data for the survey from rural and urban India had been collected between July 2017 and June 2018 and were due to be released in January 2019.

But the government, in its wisdom, chose to keep it under wraps despite the controversy this generated. The suppression led to more developments: the acting chairperson of the National Statistical Commission (NSC) and one of his colleagues resigned in protest. Their resignations were viewed as a clear expression of their disagreement over the withholding of the report that the NSC, under their watch, had cleared and approved for release.

In fact, it was on the NSC’s recommendation that the Ministry of Statistics and Programme Implementation (MoSPI) constituted a committee on the PLFS under Prof. Amitabh Kundu, who was a member of the NSC. Despite the interest generated by both the leaked parts and the resignations, the MoSPI clearly had no intention of making the findings public; the findings showed that the unemployment rate was the highest in the last 45 years.

Massive unemployment

On May 31, a day after the new government and its Cabinet were sworn in, the PLFS report was released, confirming all the apprehensions about the state of unemployment. Curiously, on May 23, the day the election results were announced, the MoSPI issued an order merging the Central Statistics Office (CSO) and the National Sample Survey Office (NSSO) to form the National Statistical Office (NSO) under the administrative jurisdiction of the Ministry (see story on page 43).

While releasing the PLFS report, the government stated in a release that the report was different in some aspects from the NSSO’s previous quinquennial surveys. One, household surveys would henceforth be conducted on an annual basis; two, time use survey to assess the time disposition of household members would be ascertained; three, technology would be deployed to speed up collection as well as processing.

Another cited difference was that the Employment-Unemployment Surveys (EUS) conducted until 2012-13 had used monthly per capita expenditure of the household as the basis for stratification; the PLFS, the release stated, used education levels as the basis for stratification to assess the level of employment and unemployment.

An explanatory note was inserted in the report by the Standing Committee on Labour Force Statistics to “sensitise users of these changes while making comparisons with results of earlier Employment-Unemployment Surveys”.

The release also said that the PLFS had introduced a new metric to measure employment and unemployment. While asserting the uniqueness of the latest survey, a caveat was introduced in all the tables in the report, which cautioned that “the figures are to be read along with the explanatory note for comparability”.

The purported differences still did not explain why the unemployment rates could not be compared with previous surveys, especially when the sampling and the methodology did not appear to be vastly different.

It appeared that the government was still trying to downplay the extent of unemployment in the country by the clarifications and insistence on non-comparability with previous EUS rounds.

Irrespective of all the caveats and attempts to dissuade people from reading too much into the report, the fact that unemployment was at an all-time high for all social groups in the year for which data were collected could not be hidden.

Unemployment rates showed a distinct high for all social groups, which more or less corresponded to the overall figures of unemployment. Compared with the previous quinquennial rounds, in 2017-18, the unemployment rate of 12.8 per cent (current weekly status) was observed to be the highest since the 1972-73 27th round of the EUS.

The second highest unemployment rate was observed in 1977-78, that is, the 32nd round of the EUS. The unemployment rate had risen from 6.7 per cent in 2011-12 to 12.8 per cent in 2017-18, an increase of 91 per cent.

Among the most worrisome findings were that unemployment rates were higher among the educated and much higher among women than men.

Clearly, the use of education as a basis for stratifying households in the PLFS showed that employment generation had not kept pace with education levels, contrary to the claims of the previous government.

For some time, it was presumed that the declining participation of women in the labour force was because of higher educational levels, but this new data suggested that women were not part of the workforce and labour force because enough employment was not being generated and not because of higher education levels.

The PLFS data showed that unemployment rates for the educated had been rising since 2004-05. For educated rural males, it had doubled from 3.5-4.4 percentage points in 2004-05 and 2011-12 to 10.5 in 2017-18 while for women, it ranged from 9.7-15.2 in 2003-04 and 2011-2012 to 17.3 in 2017-18.

The increase in the unemployment rate was marginally lower for urban educated males when compared with rural educated males, while for educated urban women it was higher than their rural counterparts at 19.8 percentage points. The report considered those who had completed secondary education as educated.

Youth unemployment

The figure for unemployment rates among the youth (15-29 years) was equally disappointing. The youth comprise 27-28 per cent of the population. From single-digit percentages in previous surveys, the unemployment rate shot up to 17 per cent among rural youth and to 18.7 per cent for urban youth in 2017-18. For rural female youth, the rate of increase was marginally lower but still at a high of 13.6 percentage points, while that of urban female youth was 27.2 percentage points.

Clearly, the last five years had done little to address the aspirations of the youth. It was also evident that the many schemes of the government, such as Start-Up India, had not generated employment to this cohort.

The BJP government in its previous tenure laid emphasis on “vocationalising” and skilling India. The figures in the report tell a different story. Around 97.3 per cent of the respondents above the age of 15 had received no technical education whatsoever. Data for 21 specific fields of training were collected for the study. Some gender disparity was observed here, with more women than men found to have received no technical education. Only 2 per cent of persons had received formal vocational training, while 6.1 per cent in the 12-59 years age cohort had received non-formal training.

Working conditions

While unemployment was surging, the working conditions and social security of the employed was nothing to cheer about. The report said that in the non-agricultural sector, 54.2 per cent of men and women surveyed were ineligible for paid leave. The comparative figures for the 61st, 66th and 68th (2011-12) rounds were 46.2, 47.4 and 50 per cent respectively.

It was also observed that the proportion of persons not getting paid leave had risen steadily since the EUS rounds of 2004-05 and 2011-12 by four percentage points, with a sharp increase observed for rural males.

Some 49.6 per cent were not eligible for social security benefits such as pension, provident fund, gratuity, health care and maternity benefits. Another worrying feature exemplifying the precarious working conditions of people in India was the high proportion of people who did not have any written contract of employment.

Missing contracts

During 2017-18, among regular wage/salaried employees in the non-agricultural sector, 71.1 per cent had no written contract, which meant that they could be fired at the employer’s whim. The figure was 59.1 per cent in the 61st Round (2004-05), 63.3 per cent in the 66th Round (2009-10) and 64.7 per cent in the 68th Round (2011-12).

The proportion among rural males who had no written contract went up by six percentage points during 2004-05 and 2011-12 and further increased by another six percentage points during 2011-12 and 2017-18. This indicates that the situation had only worsened for most workers and employees in the last five years when compared with previous regimes.

The situation was the same for urban males; the proportion of regular wage/salaried employees without a job contract rose by eight percentage points during 2011-12 and 2017-18.

There was also a marked differentiation in the unemployment rates of different social and religious groups. In rural areas, the unemployment rate increased by four percentage points for men of different social groups, while for women it ranged between one and four percentage points.

In urban areas, the increase in the unemployment rate was between three and five percentage points for men and between three and six percentage points for women. In urban areas, the unemployment rate for men was highest among Scheduled Caste (S.C.) communities and lowest among “Others”. Among women, it was the other way round; it was higher among “Others” and lowest for those belonging to the S.C category.

The worker-to-population ratio was up for all religious groups but was the highest among Christians and lowest among Muslims. The unemployment rate was up for all religious groups, with a sharp increase for women in all religious groups, and almost three to four times among urban Muslim and urban Sikh women.

Had the PLFS report been released in January 2019, it would have undoubtedly embarrassed the government. It is anybody’s guess if the electorate would have voted differently had the report been made public earlier. However, it is clear that many of the so-called schemes launched to generate employment or skill the youth did not take off in the last five years, leading to a serious unemployment crisis.