What India’s labour force survey actually says about employment

SourcesLivemint, The Indian Express and The Hindu

Relevance: This article explains the recent PLFS survey and associated issues

Synopsis:

The Periodic Labour Force Survey (PLFS) has indirectly revealed deeply entrenched problems related to the quality of jobs being generated in the country

Introduction

The third annual round of the Periodic Labour Force Survey (PLFS) data was conducted during July 2019-June 2020 and the Quarterly Bulletin [July 2020 – September 2020] was released recently.

The PLFS captures key indicators of the labour market such as the Labour Force Participation Rate (LFPR), Worker-Population Ratio (WPR), and Unemployment Rate (UR).

Read more: Periodic Labour Force Survey and Unemployment in India- Explained, pointwise
Key findings of the Quarterly Bulletin of PLFS:
Key indicatorsAs per the recent Quarterly Bulletin [July 2020 – September 2020]Corresponding period a year ago
Unemployment rate13.3 percent8.4 percent
Labour Force Participation Rate37 percent36.8 percent
Female unemployment rate15.8 percent9.7 percent
Workforce Participation Rate32.1 percent28.4 percent
About the significance of the recent PLFS:
  • The recent PLFS showed two surprising trends. One, India’s unemployment rate (UER) has declined over the survey period. Two, the Labour Force Participation Rate (LFPR) had increased.
  • The results are surprising because they correspond to a period when India’s GDP growth rate is decelerated sharply.
Reason for high jobs during low economic activity:
  1. The PLFS categorises the workforce into self-employed, regular wage/salaried workers and casual labourers. Of all the worker categories, only the proportion of unpaid family workers has gone up significantly in the last three years.
    • Almost the entire rise in the workforce was accommodated by agriculture. Agriculture continues to perform the function of a sink — absorbing the workforce that cannot find remunerative employment elsewhere.
    • Eight states, including populous ones like Uttar Pradesh, have more than 70% of people reporting themselves as self-employed, following the current weekly status (CWS) approach.
  2. Increase in women participation: The story of the declining unemployment rate can largely be explained by a movement of women from domestic work to agriculture and other petty production activities as unpaid family helpers.
  3. Increase in the Service sector: The proportion of the urban workforce dependent on services has gone up from 69.3% to 71.8% over 2017-18 to 2019-20. This is due to a high increase in low-paid service sector jobs.
  4. The data also suggests an unsurprising correlation between employment and consumption.
Read more: Causes of Unemployment and solutions
Challenges exposed by the PLFS
  • The data also suggests an unsurprising correlation between employment and consumption. The employment among those consuming the least being the lowest. This suggests extreme inequity in employment, leading to consumption inequities.
  • 60% of our population is not available to our labour force, and only 38.2% of our population is employed. This is in stark with data from China. In China, 66.8% of its labour force actively employed or seeking employment and 63.5% of its population employed in 2020.
Conclusion:

The PLFS survey 2019-20 has revealed deeply entrenched issues pertaining to the quality of employment being generated in India.

There is no official data on poverty after 2011-12 or on-farm income after 2013, and no recent data on migrant workers. So, Minor tweaks in future PLFS surveys can fill such data gaps.

 

 

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