Labour force participation is up, unemployment is down. What about the quality of work?

Source: This post has been created based on the article “Labour force participation is up, unemployment is down. What about the quality of work?” published in The Indian Express on 13^th October 2023.

UPSC Syllabus Topic: GS Paper 3 Indian Economy — Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

News: This article discusses the findings of the recent Periodic Labour Force Survey (PLFS 2022-23).

What are the findings of the latest PLFS 2022-23?

1) Rise in labour force participation rate: from 49.8% in 2017-18 to 57.9% in 2022-23.

2) Decline in the unemployment rate.

3) Decline in the share of regular wage/salaried employment: from 21.1% to 20.9%.

4) Rise in self-employment: from 55.6% in 2020-21 to 57.3% in 2022-23.

What do the findings suggest about the state of Indian economy?

1) Signs of rural economic distress:

Much of the increase in the labour force participation has been driven by rise in rural female labour participation.
This is indicative of economic distress in rural areas, which is pushing women to work in order to augment their family incomes.
Work under MGNREGA has seen a steady rise over the years, despite its wages being lower than other non-farm occupations. Women person days under MGNREGA have also been steadily rising.

2) Inadequate job creation:

The percentage of workers engaged in informal sector enterprises in the non-agricultural sector has gone up.
The falling share of regular wage/salaried and rise in self-employment reflects that the economy is unable to generate sufficient productive and remunerative forms of employment to absorb the millions entering the labour force each year.