Editorial. Rising female LFPR positive; jobs quality a concern

The Periodic Labour Force Survey (PLFS) for the January-March 2024 quarter, carried out only in urban areas, confirms the positive trends that stood out in the annual PLFS (July 2022-June 2023). If the rise in labour force participation rate (proportion of people working or seeking work in the working population) since 2019 has been driven by the entry of women into the workforce in rural India in particular, that trend seemed to have picked up in urban areas as well. Female LFPR for the 15-plus population in urban India, as per ‘current weekly status’ (or weekly recall method), was 25.6 per cent in January-March 2024, against 22.7 per cent in the corresponding period last year. This rise betters the 2.3 percentage points rise between the first quarters of 2022 and 2023 calendar years.

It should be noted that quarterly surveys are based on ‘current weekly status’ (CWS), whereas the annual PLFS is based on CWS and an annual recall period of ‘principal’ and ‘subsidiary’ activities. CWS data records higher unemployment and lower LFPR readings. The female urban unemployment rate has fallen from 9.2 per cent in January-March 2023 to 8.5 per cent in January-March 2024. Curiously enough, male urban unemployment has actually risen sequentially between the December 2023 and March 2024 quarters (5.8 per cent to 6.1 per cent), while remaining flat over the year. Feminisation of the workforce in urban India is certainly a plus. But it remains to be be seen whether it is replacing male workers and bringing down wages. The lower rise in LFPR among urban males vis-a-vis females needs to be understood.

The real import of jobs is to improve well being. Here, the data are unflattering. The India Employment Report 2024 says: “The average monthly real earnings for regular salaried workers declined annually by 1.2 per cent, from ₹12,100 in 2012 to ₹11,155 in 2019, and by 0.7 per cent as of 2022, to ₹10,925. Similarly, the average real earnings of self-employed individuals declined annually by 0.8 per cent, from ₹7,017 in 2019 to ₹6,843 in 2022. The average real monthly earnings of casual workers increased by 2.4 per cent annually, from ₹3,701 in 2012 to ₹4,364 in 2019, and by 2.6 per cent annually, to ₹4,712 in 2022.”

Income trends should be seen along with changes in forms of employment. Between 2019 and 2023, the share of regular employment fell (23.8 per cent to 20.9 per cent), but that of self employed increased (52 per cent to 57.3 per cent); casual labour too fell (24.2 per cent to 21.8 per cent). It is clear that the shift away from regular employment has not helped raise incomes. Policies to lift the share of regular employment, which increased from 14.2 per cent in 2000 to 23.8 per cent in 2019, before falling, must be formulated. The job scene is positive, but there are concerns. High levels of educated unemployment reflect a skills mismatch, and stagnant income a productivity issue. Incentives for creating jobs are as important as those for capex.