“The real challenge is not job growth but the quality of employment,” said Sher Verick, Deputy Director, International Labour Organisation (ILO) Decent Work Team for South Asia and Country Office for India.

In an interview to BusinessLine , Verick noted that a key challenge for India is to get workers into formal employment and ensure they get access to social security and other employment benefits. Excerpts :

In the abesence of any recent official statistics on job creation how does one make sense of the employment scenario in the country?

India has different sources of labour statistics. The main source is the National Sample Survey Office’s (NSSO) Employment and Unemployment Survey, collected every five years. Since 2010, the Labour Ministry’s Labour Bureau has also conducted an annual nationally representative Employment and Unemployment Survey.

So, there are official statistics on key labour market indicators for recent years, but there aren’t figures for job creation, which is a flow indicator. What we know from the NSSO and Labour Bureau surveys is the level of employment at two points of time. The difference in employment levels, however, can be misleading because jobs are created and destroyed all the time.

Data from these surveys can be used to give a good picture of the employment situation in India if the indicators are used correctly

Normally, data on job creation are gathered from enterprises: surveys ask firms directly, how many workers they have hired (and fired) over a certain period. Such data are not readily available in India.

Does ILO agree that there is a problem of jobless growth in India?

If taken at face value, labour market figures from the second half of the 2000s would indeed suggest jobless growth. However, digging deeper, beyond aggregate labour market statistics, reveals a far more complex story, which suggests both positive and negative trends.

Disaggregating total employment by location, gender and sectoral trends shows that, despite the overall stagnation of aggregate employment, jobs were being created. Much of the slow growth in employment can be attributed to the withdrawal of workers from agriculture, especially women, which is expected as a part of the development process.

During the 2000s, employment did grow strongly in urban areas and amongst men. In this regard, male employment grew by 1.9 per cent per annum from 1999-2000 to 2011-12, while female employment increased by just 0.3 per cent on an annual basis.

Though “jobless growth” is proclaimed widely, it is a misleading term. The real challenge is not job growth but the quality of employment.

Can the increasing trend towards automation in manufacturing be seen as a reason for this?

There is no strong evidence that automation is having a major impact on the overall employment growth scenario. But it should be noted that Indian manufacturing has been becoming more capital and skill intensive for some years. Automation is likely to have a greater impact on job creation in the future.

The quality of jobs also remains poor and a large number of jobs created in the formal sector lack social security. Is having a job enough or are benefits also necessary?

The ILO’s Decent Work Agenda is all about the quality of employment. Having a job is important but equally important is the quality of the job in terms of wages, working conditions, access to social security and the opportunity for social dialogue and freedom of association.

Due to the pervasiveness of informality, a major challenge in India is the quality of jobs. Behind the overall trends in informality there are two underlying, but diverging, trends. First, the share of workers in the unorganised sector fell from 86.3 per cent in 2004-05 to 82.2 per cent in 2011-12, which is a positive trend and reflects that Indian enterprises are getting larger on average.

At the same time, the share of informal workers in the organised sector increased significantly because of a greater use of contract and other forms of casual labour.

Because of these countervailing trends, the overall proportion of informal workers in total employment has remained relatively stable, at around 92 per cent.

Another positive trend is the rise in the share of regular wage and salaried workers in the Indian labour market, which now accounts for 17.9 per cent of total employment.

Related Topics
comment COMMENT NOW