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NEWS ALERTS | Quality of work matters, and not just job creation
Quality of work matters, and not just job creation

Quality of work matters, and not just job creation

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published Published on Sep 26, 2022   modified Modified on Sep 28, 2022

Contrary to the rising economic distress on the ground since the last few years, the official press release related to the fourth Annual Report on the Periodic Labour Force Survey (PLFS) at first glance seems to give a rosy picture about the employment situation in India. 

Defined as the percentage of persons unemployed among the persons in the labour force, the unemployment rate in usual status (principal activity status + subsidiary economic activity status) terms at the national level has been observed to gradually fall over various rounds of PLFS. It was 6.1 percent in PLFS 2017-18, 5.8 percent in PLFS 2018-19, 4.8 percent in PLFS 2019-20, and 4.2 percent in PLFS 2020-21, as per the Annual Report on PLFS 2020-21. Please look at chart-1.

One also gets a positive feeling about the job market situation in India when the indicators Worker Population Ratio (WPR) and Labour Force Participation Rate (LFPR) are consulted. 

Source: Press release: PLFS – Annual Report [July, 2020 – June, 2021], released on June 14, 2022, Press Information Bureau, Ministry of Statistics & Programme Implementation (MoSPI), please click here to access 
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The percentage of employed persons in the population i.e., the WPR in usual status terms has soared over various rounds of PLFS at the national level. It was 34.7 percent in PLFS 2017-18, 35.3 percent in PLFS 2018-19, 38.2 percent in PLFS 2019-20, and 39.8 percent in PLFS 2020-21. Likewise, the percentage of working age persons in the labour force (working or seeking or available for work) i.e., the LFPR in usual status terms has climbed up over various rounds of PLFS. The newly released annual report on PLFS shows that the LFPRs were 36.9 percent in PLFS 2017-18, 37.5 percent in PLFS 2018-19, 40.1 percent in PLFS 2019-20, and 41.6 percent in PLFS 2020-21 for India. Please see chart-1.

It should be noted that the poor people are more likely to take up any job during the times of economic distress. Looking solely at the above-mentioned indicators may lead us to believe that the country is creating more and more jobs over the years. But the key question is whether we are creating enough decent jobs. In order to know that, one needs to look beyond the three indicators of employment, which have been discussed above.

Quality of employment 

A falling unemployment rate may not provide any idea about decent work or gainful employment. According to the International Labour Organisation (ILO), "[d]ecent work sums up the aspirations of people in their working lives. It involves opportunities for work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity and treatment for all women and men."

According to a note on gainful employment in India, which was prepared by Jonathan Woetzel, Anu Madgavkar, and Shishir Gupta (2017) for McKinsey Global Institute -- an international private-sector think tank, "gainful employment covers a range of issues, including the quantity and type of work done by people already in employment, growth in labor productivity, higher earnings, and aspects of work quality such as greater safety, cleanliness, flexibility, income security, and intellectual challenge." The policy brief further explained that the "[l]abor-force participation and the number of jobs do not in themselves measure gainful employment."

Instead of looking at indicators that give ideas about the quantity aspect of employment, we need to look at indicators that could shed light on the quality of jobs that are being generated in the Indian economy. Let us look at some of them one by one. 

Unpaid helpers in household enterprises

As per their status in employment, the workers in usual status (ps+ss) are categorised into: (i) self-employed, (ii) regular wage/salaried employee, and (iii) casual labour. Within the category of self-employed, the two sub-categories are: 'own account worker and employer' and 'unpaid helper in household enterprises'.

Source: Statement-12, Fourth Annual Report on Periodic Labour Force Survey (PLFS), July 2020-June 2021, released in June 2022, National Statistical Office (NSO), MoSPI, please click here to access 
---

It is evident from chart-2 that the proportion of 'helpers in household enterprises' among the total number of workers has increased from 13.3 percent to 15.9 percent between PLFS 2018-19 and PLFS 2019-20, which jumped further to 17.3 percent in PLFS 2020-21. This is certainly not a good sign. It is because helpers are self-employed persons who were engaged in their household enterprises, working full- or part-time and did not receive any regular salary or wages in return for the work performed. They did not run the household enterprise on their own but assisted the concerned person living in the same household in running the household enterprise.  

Contrarily, one finds from chart-2 that the proportion of 'workers with regular wage/ salary' among the total number of workers has steadily shrunk from 23.8 percent to 22.9 percent between PLFS 2018-19 and PLFS 2019-20, which further contracted to 21.1 percent in PLFS 2020-21. Regular wage/salaried employees were those who worked in others’ farm or non-farm enterprises (both household and non-household) and, in return, received salary or wages on a regular basis (i.e., not on the basis of daily or periodic renewal of work contract). This category included not only persons getting time wage but also persons receiving piece wage or salary and paid apprentices, both full time and part-time. In terms of quality of employment, it is better to be a 'regular wage/salaried employee' instead of a 'helper in household enterprises'. 

The proportion of 'workers in casual labour' among the total number of workers has steadily fallen over various PLFS rounds, from 24.9 percent to 23.3 percent between PLFS 2017-18 and PLFS 2020-21. A person who was casually engaged in others’ farm or non-farm enterprises (both household and non-household) and, in return, received wages according to the terms of the daily or periodic work contract, was termed as a casual labour, as per the PLFS. 

Working conditions 

It is generally the case that the working conditions of the 'workers with regular wage/ salary' is better than that of 'workers in casual labour' as well as of those who are self-employed. However, even a worker with regular wage/ salary may not enjoy all the benefits, which a person in formal employment should ideally receive. 

Table 1: Percentage of regular wage/salaried employees who had no written job contract, not eligible for paid leave and not eligible for any social security benefit among regular wage/salaried employees in usual status (ps+ss) in non-agriculture sector during PLFS (2017-18), PLFS (2018-19), PLFS (2019-20) and PLFS (2020-21)

Source: Statement-16, Fourth Annual Report on PLFS, July 2020-June 2021, released in June 2022, NSO, MoSPI, please click here to access 
---

Table-1 indicates that the ‘percentage of regular wage/salaried employees who had no written job contract’ has reduced over various rounds of PLFS, from 71.1 percent in PLFS 2017-18 to 64.3 percent in PLFS 2020-21. Likewise, the ‘percentage of regular wage/salaried employees not eligible for paid leave’ has decreased over various rounds of PLFS, from 54.2 percent in PLFS 2017-18 to 47.9 percent in PLFS 2020-21. As opposed to that, the ‘percentage of regular wage/salaried employees not eligible for any social security benefit’ has increased over various rounds of PLFS, from 49.6 percent to 54.2 percent between PLFS 2017-18 and PLFS 2019-20, but fell slightly to 53.8 percent in PLFS 2020-21.

Wages and remunerations of various categories of workers

One of the most important indicators of quality of employment is income or earnings (also wages). In each of the quarters of PLFS 2020-21, one notices that the 'average daily wage/ salary earnings (in Rs.) by the regular wage/ salaried employees in current weekly status (CWS)' was greater than the 'average earnings (in Rs.) per day by casual labour engaged in works other than public works' as well as the 'average daily gross earnings (in Rs.) from self-employment work in CWS'. Please see chart-3.

Note: * Calculated by dividing 'Average wage/ salary earnings (in Rs) during the preceding calendar month by the regular wage/ salaried employees in current weekly status during the survey period 2020-21' by 30 
** Calculated by dividing 'Average gross earnings (in Rs.) during the last 30 days from self-employment work in current weekly status during the survey period 2020-21' by 30

Source: Statements-17, 18 & 19, Annual Report on PLFS, July 2020-June 2021, released in June 2022, NSO, MoSPI, please click here to access 
---

The 'average earnings (in Rs.) per day by casual labour engaged in works other than public works' was found to be the lowest in each of the quarters. However, unlike the 'average daily wage/ salary earnings (in Rs.) by the regular wage/ salaried employees in CWS' and the 'average daily gross earnings (in Rs.) from self-employment work in CWS', the 'average earnings (in Rs.) per day by casual labour engaged in works other than public works' increased over the quarters, from Rs. 311/- in October-December 2020 to Rs. 327/- in April-June 2021.

It needs to be mentioned here that the Annual Report on PLFS 2020-2021 has also covered the period (i.e., April-June, 2021) when the state-wide lockdowns associated with the second wave of COVID-19 were imposed. The Annual Report on PLFS 2019-20 too had covered the period (i.e., April-June, 2020) when the countrywide lockdown (associated with the first year of the COVID-19 pandemic) was imposed.  

Usual Status and Current Weekly Status

It needs to be mentioned here that for the PLFS, activity status was collected for all the three reference periods i.e., last 365 days for usual status, using a reference period of 7 days preceding the date of the survey for current weekly status and each day of the reference week for current daily status. The Usual Principal Status of a person was determined by the PLFS as the status on which the person spent relatively long time (major time criterion) during the 365 days preceding the date of survey. Such persons might have also pursued, in addition to his/ her Usual Principal Status, some economic activity for 30 days or more during the reference period of 365 days preceding the date of survey. The status in which such economic activity was pursued during the reference period of 365 days preceding the date of survey was the Subsidiary Economic Activity Status of the person. According to Prof. Prabhat Patnaik, "[i]f a person is employed or seeking work for more than half the time (“majority time”) during the preceding 365 days before the date of the survey then his or her “usual status” is that he belongs to the labour force; but if the person does not succeed in getting work for more than half the time then he or she is considered “usual status unemployed”." He adds that "[a] further modification is made to this to make it less restrictive. All individuals who are outside of the labour force according to the above definition, or are unemployed, but have worked for not less than 30 days during the reference year are classified as “subsidiary status” workers. The total labour force then is defined as “Usual Status (Principal Status plus Subsidiary Status)” workers. Likewise, all unemployed according to the above criterion who have worked for not less than 30 days are considered to have been employed in a “subsidiary status” activity." 

The CWS of a person is the activity status obtained for a person during a reference period of 7 days preceding the date of survey. A person is considered working (or employed) if s/he worked for at least one hour on at least one day during the 7 days preceding the date of survey or if s/he had work for at least 1 hour on at least one day during the 7 days preceding the date of the survey but did not do the work. A person is considered 'seeking or available for work (or unemployed)' if during the reference week no economic activity was pursued by the person but s/he made efforts to get work or had been available for work for at least one hour on any day during the reference week. A person who had neither worked nor was available for work any time during the reference week, is considered to be engaged in non-economic activities (or not in the labour force). Having decided the broad current weekly activity status of a person on the basis of 'priority' criterion, the detailed current weekly activity status is again decided on the basis of 'major time' criterion if a person was pursuing multiple economic activities.

References: 

Fourth Annual Report on Periodic Labour Force Survey (PLFS), July 2020-June 2021, released in June 2022, National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI), please click here to access 

Third Periodic Labour Force Survey Annual Report (July 2019-June 2020), released in July 2021, NSO, MoSPI, please click here to access  

Press release: Periodic Labour Force Survey (PLFS) – Annual Report [July, 2020 – June, 2021], released on 14 June, 2022, Press Information Bureau, Ministry of Statistics & Programme Implementation (MoSPI), please click here to access 

Decent Work, International Labour Organisation, please click here to access [accessed on September 21, 2022]

A new emphasis on gainful employment in India - Jonathan Woetzel, Anu Madgavkar, and Shishir Gupta, published on June 13, 2017, McKinsey Global Institute, please click here to access [accessed on September 21, 2022]

News alert: Latest available PLFS data sheds light on unpaid helpers in self-employment & underemployment among various types of workers, Inclusive Media for Change, Published on Sep 2, 2021, please click here to access  

Low Incomes Haunt India’s Growth -Subodh Varma, Newsclick.in, 18 September, 2022, please click here to access

Joblessness below pre-COVID levels: Finance Ministry, The Hindu, 17 September, 2022, please click here to access   

Why the Rise in Workforce Participation During the Pandemic Points to Distress Employment -Shiney Chakraborty, Priyanka Chatterjee and Mitali Nikore, TheWire.in, 6 July, 2022, please click here to access  

Our employment data should be interpreted cautiously -Himanshu, Livemint.com, 16 June, 2022, please click here to access 

The Dramatic Increase in the Unemployment Rate -Prabhat Patnaik, Newsclick.in, 14 June, 2019, please click here to access  

 

Image Courtesy:  Inclusive Media for Change/ Shambhu Ghatak


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