The recently released India Employment Report 2024, brought out by the International Labour Organization and the Institute of Human Development, tells us that the labour market has seen a churn after Covid, marking a sharp break from the 2000-2019 period. Chief among these is the rise in workforce in agriculture, implying that the reverse migration of the Covid period was not temporary. Meanwhile, the quality of jobs or incomes generated also fell after 2019, alongside a widening gender gap.

A major feature of the report is that it highlights a sharp rise in ‘open unemployment’; of the 371 million youth in the 15-29 age bracket, 28 per cent, largely women, are out of ‘education, employment or training’, which points to a failure of the education system to make them job-worthy. The need to invest more in the skills of this cohort, 41 per cent of whom barely have a secondary education, should be given utmost priority. Those who have the formal education, too lack the basic skills that should accompany it. Theoretically speaking, the Kuznets-Lewis model of the rural workforce shifting to higher productivity jobs in industry has not happened at all, and in fact been reversed after 2019, the report notes.

The distribution of jobs among youth in 2022 shows that 26.3 per cent of them are employed in unskilled jobs in farming, industry and construction, 64.8 per cent in low skilled jobs and just 8.9 per cent in medium and high-skilled jobs. While the share of unskilled jobs has fallen from levels of 36.1 per cent in 2000, that of low skilled jobs has risen from 60.5 per cent in 2000 and medium and high skilled jobs from 3.4 per cent in 2000.Inotherwords, little has changed in two decades in terms of labour productivity and earnings. There has been a reversal post-Covid, with a fall in the share of high and medium skill jobs since 2019, when it was 10.4 per cent. The ILO could have taken a granular look at the skills mismatch across sectors for a range of manufacturing and services activities. While it is well known that capital intensity in manufacturing has held up job creation, the potential of labour-intensive sectors should have been more clearly spelt out so that it yields policy insights. But for now, the recent setback to micro, medium and small industries must be reversed to bring the situation back to 2019 levels. The Centre’s focus on farm-led enterprises holds immense potential to absorb the surplus workforce in rural areas. Indeed, it may not be necessary to create Lewis-Kuznets type population transfers to urban centres.

There are the usual conceptual grey areas. If unemployment is a vague term in the Indian context, characterised by disguised unemployment, so is self-employment. The report’s last lines sum it up: “The rise in real earnings and wages from self-employment and casual work, especially among men, indicates some improvement in the labour market — which needs further exploration.” India’s labour challenges call for complex solutions.