Employment status in India

Source-This post on Employment status in India is based on the article “No major change in employment status or wages in 10 years” published in “The Hindu” on 18th March 2024.

Why in the News?

Recently, a report by Bahutva Karnataka shows that the share of self-employed workers increased, while the share of those in formal employment remained low.

Findings of the report

i) Minimum wage: Many households still earn less than the proposed National Floor Level Minimum Wage (NFLMW). In 2019, an expert committee recommended the NFLMW to be at least ₹375 per day and ₹3,050 per week.

ii)  Widening Wage inequality: Widening Wage inequality has widened the gap between the rich and the poor.

a) According to World Inequality Database 2022, the top 1% and 10% of the population held 22% and 57% of the national income, respectively, while the bottom 50% held 12.7%.

b) There is negligible increase in wage earnings when adjusted for inflation.

iii) Low Formal Employment: The share of employment in the formal sector remained below 25%. The share of formal employment with social security and other advantages attached to it has remained stagnant.

iv) Increase in Self-Employment: The number of self-employed individuals has increased substantially.

a) The share of those who were self-employed remained above 50% by 2022-23.

b) The share of self-employed women was the highest in the share of employment. It also saw the highest growth of 8% points from 56.5% in 2011-12 to 64.3% in 2022-23.

v) Unpaid Labor: The report indicates an increase in the proportion of women working unpaid in family enterprises or farming. This increase indicates a lack of other remunerative job opportunities and stagnating household income.

vi) Gender Disparities Persist: Despite greater engagement in self-employment, disparities between genders remains. Women are frequently engaged in unpaid labour or informal work due to limited opportunities in the formal sector.

vii) Economic Stagnation Impact: Economic stagnation has resulted in restricted growth in formal sector employment. This drives many people, particularly women, to pursue self-employment and unpaid labour as alternative sources of income.

Read more: Present Status of Unemployment In India

UPSC Syllabus: Economy (Reports)