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Sign of redundancy? Rise in joblessness despite no growth in labour force

By Arjun Kumar, Sunidhi Agarwal, Anshula Mehta, Ritika Gupta, Mahima Kapoor, Swati Solanki

Global phenomena that represent a core focus of the sustainable development goals (SDGs) have been significantly altered by the Covid-19 pandemic, drawing our attention to new realities and ways of life we did not imagine before. The pandemic triggers an economic crisis that is significant and widespread, affecting all areas of the economy, including capital flows, business operations, employment, and jobs.
The Covid-19 pandemic has had a devastating impact on the labor market and workforce. To address the same and pave the way for solutions, the Center for Work and Welfare (CWW) at the Impact and Policy Research Institute (IMPRI), New Delhi, and Counterview organized a #WebPolicyTalk on the State of Employment in India: Impact and the Way Forward, with special reference to Coronavirus Pandemic under the series State of Employment and Livelihood– #Employment Debate.
The speaker of the session Prof Sarthi Acharya, Delhi Chair Professor at Institute of Human Development, New Delhi (Honorary); Managing Editor, Indian Journal of Labour Economics (IJLE) starting with highlighted that unemployment is a problem in the country long before the pandemic and has persisted since two decades. However, the rate of change of employment has varied from time to time and the secular trend towards labor rejection has been there for a while.
The employment situation is pretty grim in India but unfortunately, it is not the reason on the basis of which governments are elected or fall.

Jobless growth

Prof Sarthi Acharya, Delhi Chair Professor at Institute of Human Development, New Delhi (Honorary)elucidates the negative trend where the annual growth of the labor force is nearly ten times the growth of the employment opportunities. The employment growth rate is far behind the ever-growing working population.
The employment growth is much slower than the labour force growth.
The economic trends forecast a tremendous decline in the part-time employees concurrent with a sharp surge in the full-time employees which implies nothing but the necessity to generate an adequate number of full-time employment opportunities far higher than the figures we have today.
The dip in the volume of unpaid women family workers and female casual laborers is too steep to be ignored and left unnoticed. The incline in the number of regular employees is pleasing though it has got to grow in numbers.
The labour market is amidst its transition to a capitalist fashioned market.
The agricultural sector has been disengaging and rejecting the laborers over the past few years due to the increasing capital intensity and modernization of agriculture. This is a positive sign as the productivity of the agricultural sector is just a fraction of others. 
The disengaged workers end up as refugees in other industries among which the construction and the services are the most prominent ones. The sharp dip of the family workers and casual labourers in the agricultural sector and their engagement or involvement in the even harder industry of construction is not optimistic.

Rising unemployment rate

The unemployment rates have tremendously risen. The presentation captivates the attention of the viewers to the vast category of people Not in Employment, Education, or Training (NEET), this is absolute wastage of the potential labor force.
The absorption potential of the non-farming sectors has not risen up to absorb the rejected employees from the agricultural sectors. The rejected employees are not absorbed in the non-farming sectors other than manual work, which is unwanted. Unemployment is constantly rising despite the people withdrawing from the workforce.
These are signs of labour redundancy. Reduction in the part-time workers and daily wage workers suggest the improvement in the quality of the workforce but they have not been absorbed elsewhere.
Despite almost no growth in the labour force, unemployment numbers have risen showing signs of labour redundancy.
The pandemic has left its impact in form of the serious concerns governing the conditions of migrant employees returning home and the category of people not engaged in education, employment, and training.
The suggested measures include greater state allocations to the education and skill development sector. Enhancing the quality of skill development, education and training must begin right from the schooling. India must enhance its expenditure in the R&D sector. The present contribution of the GDP to the R&D activities is feeble. Closer coordination with the industrial sector is much expected and advisable.
India has a small-scale industrial policy, which is yet to develop. We need to establish functional industrial clusters. The presentation also emphasizes the need to bring jobs to where the people are and not vice versa. The population density of the metro cities is already at the brim. the inflow of capital has stabilized and hence the private sector initiatives in the R&D activities have to be encouraged and incentivized.

Quality employment

Dr Radhicka Kapoor, Senior Visiting Fellow, Indian Council for Research on International Economic Relations (ICRIER), decomposed the regular wage salaried employees into 3 categories with regard to their access to the social security benefits. 
The category with access to all social security benefits and in addition to the employment tenure security of 3 years or more are considered or defined as the decent workers engaged in good jobs. But unfortunately, the aforesaid category of workers remains the same infraction to the total workforce of the nation.
In addition, the larger fraction of the daily wage workers fall short of income which is far behind the national average. This is criticized as a miserable condition. The quality of employment too is yet to be improved.
The speaker raised the fundamental question of who is responsible to bear the cost of generating good quality employment? The quality of remuneration and access to social security & tenure security benefits are already miserable among the daily wage workers, who fall short of the minimum wages. The pandemic has further aggravated the crisis even more. The question has been raised as to how to resolve the ever-growing crisis.
Dr Sandhya S Iyer, Associate Professor, Chairperson, Centre for Public Policy, Habitat and Human Development, School of Development Studies, Tata Institute for Social Sciences (TISS), Mumbai, raised the concern of the NSSO redefining the full-time workers to be inclusive of the daily wage workers as well.
The category of full-time employees earlier only comprised of regular salaried employees and was exclusive of the daily wage workers. How come the full-time employees comprising of the daily wage workers and the increase of their share in the total workforce of the nation be interpreted as a significant positive change when the remuneration and social security of the daily wage workers remain the same and fall short of the national average.

The discussant also raised the serious concern of a labour-abundant country not having a manufacturing policy.The quality of the education, training, and skill development are improving, but the possible opportunities of them being absorbed are very feeble. At the same time, the sectors in need of skilled labor have foregone skill development, resulting in a situation where we need to import labor.
Dr Sandhya underlined the need for joint thinking to align labor market policies that integrate strategies for youth, women in general, and SC/ST, in particular, to view them as potential contributors.

Measuring work or workers?

Dr Sandhya highlighted that existing measures and methodologies need to be evolved to generate suitable indicators to capture the values of “leave no one behind" and “Reaching the farthest first" as they are often being missed out in the existing framework.
She further emphasized considering migrants struggling for their domicile, identity, and work as human beings whom we value and whom we want to nurture as those creating wealth for economic and social progress.
Prof Sarthi Acharya highlighted the necessity to impart and address the skill development, education, and training from the primary level of education in order to raise a high-quality labor force. Short-term skill development is expected to be of no help.
The absence of specific policies is expected to be the root cause of the aggravating issues. The start-ups in India focus mostly on marketing and have got nothing much to do with or engage the high-quality and technically skilled labor force. These start-ups don’t contribute or add value as sectors as artificial intelligence does. 
This is the reason why we need to address the issue of skill development right from the beginning of education. Hence, we are in need of a much better policy than what we have now whether it be social security, industries, wages, education, and a lot more.
Making concluding remarks the chair of the session Prof Santosh Mehrotra Former Professor, Jawaharlal Nehru University (JNU), New Delhi; Former Director, Institute of Applied Manpower Research (IAMR), NITI Aayog (formerly Planning Commission), India stated that there is a need for reviving the quinquennial survey. He further highlighted the difficulties faced by NSS in conducting surveys and releasing data and emphasizes the need for having an employment policy.
He threw light on the upsides of the increase in public investment into infrastructure is that very significant jobs in construction are now in the organized sector. Also, the massive increase in construction jobs that took place between 2004-2012 resulted in the doubling of the construction labor force in the country from 26 million to 51 million in a matter of seven years as a result of which real wages increased in agriculture due to tightening up of labor market in agriculture.
We currently have a model where people move to the place of jobs but since jobs exist in clusters in MSMEs there is a need to look at cluster development as a part of our industrial policy. Further, he stressed generating 10 million new non-farm jobs by 2030 by aligning industrial policy with education policy. Commenting on the quality of jobs he stated that the social security code of 2020 is a myth and there is no possibility of improving the quality of jobs if we move in this direction.
Talking about skill development he stated that our skill ecosystem that has been built in the last ten years is broken because today the way the young people are only enabled to join the informal sector. Secondly, there exists precious little involvement of organized formal private sector in firm enterprise-based training.
There is no substitute in short term for skill formation and hence there is need to relook at whole skill and education system.
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Acknowledgement: Abraham Joseph, Research Intern at IMPRI

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