Labour pains

The release of the quarterly Periodic Labour Force Survey (PLFS) last week offers official insights into employment trends during the pandemic period. The data, covering the four quarters from October-December 2019 to October-December 2020, suggest that while the lock-down in April-June 2020 did throw India’s labour market into unprecedented disarray with a sharp spike in unemployment, a fall in workforce participation and a shrinkage in the workforce itself, all of these parameters thankfully staged a material recovery by end of 2020. Policy attention, however, needs to focus on the segments of the employed who have been left worse off than before.

On the positive side, overall unemployment rates in urban India (based on current weekly status, believed to be a more realistic measure than the usual yearly status), after spiking to 20.9 per cent in the lockdown-afflicted months of April-June 2020 moderated to 10.3 per cent by October-December 2020, staging a fairly quick rebound. The proportion of folks seeking work dipped to 35.9 per cent in Q2 2020, but bounced back to 37.3 per cent by the fourth quarter. About 33.5 per cent of the population was employed by Q4 2020 compared to 28.4 per cent during peak pandemic. But the headline numbers do hide some disquieting trends. A sizeable proportion of younger folks (ages 15-29) who lost jobs during the pandemic didn’t recoup them even by Q4 2020, with their unemployment rates at 24.9 per cent. Populous States of Maharashtra, Madhya Pradesh, Rajasthan and Uttar Pradesh reporting youth unemployment rate of 26-31 per cent is worrying. Covid also left the employment situation for women (unemployment rate of 13.1 per cent by Q4 2020) materially worse than that for men (9.5 per cent). A major part of the post-pandemic revival in jobs transpired in the low-productivity agriculture sector which employed 6.1 per cent of the workforce in Q4 2020 versus 5.1 per cent the previous year, while sought-after manufacturing jobs dipped from 33.2 per cent to 32.2 per cent. There were also fewer salaried jobs going around after the disruption, while there was a spike in folks employed in family enterprises and as casual labour, a shift that likely dented incomes.

Given the significance of these findings, it would have been useful if this PLF survey had been released last year when the Centre was formulating its pandemic relief packages, instead of with a nine-month lag. In fact, the Centre ought to insist on expediting even the usual 45-day lag in the release of this quarterly report. The PLFS may not be the last word on employment trends in India (it has been critiqued for counter-intuitive findings), but it is far more representative of what’s transpiring than payroll-based data (such as EPF enrolments), with 80 per cent of India’s workforce in the informal sector.