The 2009-10 major round NSSO employment-unemployment survey figures released in the last week has raised quite a few eyebrows. The latest estimates show sharp decline in the labourforce participation rates (sum of employed and unemployed to population ratio, LFPR) and work participation rates (employed to population ratio, WPR) in the last five years. These declines were quite unexpected for the government, which till now, has been making tall claims of high growth at 8 p.c. and the inclusive nature of the growth. While the policies in the last five years consisted of several employment generating schemes, the MGNREGA in the rural areas being one of the most important, the latest employment figures come as an embarrassment for the government. The trends have even prompted a few within government to find faults with the thus far adequately reliable NSSO estimates!
Yet, whatever maybe the governmental stance, the fact remains that the NSSO figures released for 2009-10 employment and unemployment shows a trend of deteriorated employment scenario in the last five years. Below is an account of what is observable from the preliminary estimates released so far.
What can we interpret from the data?
The first stark observation is the decline in the overall Labourforce participation and work participation rates. Disaggregated by sex, the data reveals that the shrinkage has mainly taken place for women workers. The women’s labourforce participation has declined by almost 14 p.c. in which rural women shows a decline of 15 p.c. The decline is sharper among the age cohort 15-59, which is supposedly the working age group. Secondly there is also an observed decline of the employment growth rates among both men and women. However the declines are more prominent for the women in both rural and urban areas as the number of employed women has declined from 148.6 million to 127.3 million, which is a decline of almost 17 percentage points in five years between 2004-05 and 2009-10. Once again the declines are sharper among the 15-59 age cohort, specifically for the rural women, where the WPR has declined from almost 49p.c to 39 p.c.
The absolute decline in the women’s labourforce and workforce raise important questions on the performance of the economy in terms of creation of employment opportunities in the last five years. It appears that while India is said to be passing through a phase of demographic dividends, when the working age population of the country is bulging, the reduced LFPR and a simultaneous absolute reduction in women’s labourforce becomes a major puzzling factor. The immediate question that follows is what essentially has caused this decline? At this moment given the limited access to the data (complete information to be released shortly by the NSSO), there are several conjectural explanations being forwarded by economists. A first explanation forwarded to this end has been the increased enrolment of girls into education where girls in the age cohort 15-24 have enrolled for skill development or to attain higher education which has reduced the labourforce in absolute numbers. The increments in education expenditure and the targeted incentive-based girl child education programmes that have been implemented in the last five years, especially in the rural areas are being forwarded as an explanation for such increases in education enrolment of girls. While the access to entire data is still awaited, if an increase in education enrolment for women is responsible for the decline in women’s labourforce participation, such a trend is an obviously welcome step.
However, a second disturbing explanation in the context of this decline in women’s labourforce participation in absolute numbers has been that of a wage boom which has caused women to recede from the workforce/paid work. While such explanation forms an essentially apologist explanation for justifying the phenomenon of ‘jobless growth’ in the last five years, it is also based on two false notions. First is the notion of wage boom where income of households have been claimed to have doubled. Naturally this entails a discussion on whether wages have really doubled in the last five years. Based on the available preliminary information, it however does not seem so. In the rural areas where wage employment is predominated by casual employment, nominal wages do show an increase of almost 90p.c. However given the high inflation rates, specifically food inflation, the increase in real incomes does not seem to have increased to such an extent. Factoring out the high inflation (deflating the wages by CPIAL and comparing with wages at 2004-05), real wages in casual work other than public works, has increased merely by 20 percentage points in the last five years. Disaggregated by sex, real wages for rural males have increased by a mere 14 p.c. while that for the women have increased by 22 p.c., (albeit wages for women were much lower in 2004-05 and is still substantially lower than the male wages in absolute terms). Under such a circumstance, the explanation of wage boom in rural areas keeping women away from paid work is therefore least likely to be a realistic explanation of reduced female labourforce. What it instead suggests is lack of adequate demand for female labour in rural areas, also reflected in the decline in rural female work participation rates, which again maybe a fallout of the slackened rural diversification process.
On the other hand, in the urban areas real wages for regular employment (as regular employment forms the bulk of wage employment in urban areas) have increased by 33p.c. which in some way might sound convincing for the argument of women moving out of labourforce due to wage increments. However disaggregated by sex, real wages show 31 p.c. rise for urban male workers and 42 p.c. rise for urban women workers. Under such a scenario when real wages for women are increasing at a faster pace than that for men, a decline in women’s LFPR cannot be explained solely by women’s unwillingness to participate in the economic activities. What is more probable is that in urban areas, limited availability of better quality jobs for women has pushed younger women into skill development and training with a future expectation of increased earning capacities thus rendering older women to stay in the workforce for doing the petty and subsidiary activities.
Moreover there is an evidence of a shift of women workers from self employment to wage employment in both rural and urban areas which is also an indication of the fact that the search for jobs still continue. The reduced presence of women in self employed category may even be pointers to diminishing economic activities of specific types (petty retailing, homebased work, and outsourced and subcontracted factory work) or non-viability of such activities in the face of high inflation! Such a possibility of drying up of self-employed activities for women coupled with the phenomena of search for jobs over a longer period may have had a discouraged worker effect on women, thus resulting in reduced LFPRs. Under such circumstances, one cannot also rule out the possibility of previously self-employed women workers being wrongly reported as non-workers due to non-availability of work over a lengthy period! However, this cannot be conclusively argued till the entire estimates are released by the NSSO.
Nonetheless, a more upsetting notion embedded in a deep patriarchal social mindset that seeks to discriminate between men and women further in the world of work is the argument that improvement of men’s earnings would push women out of the labourforce. Typically such formulations stereotype women and also ascertain that women’s participation in the labourforce is a matter of compulsion and not will! Ridiculous it may appear to some, yet it is the easiest possible explanation to forward when one wants to obfuscate the responsibility of providing more employment opportunities, both in terms of quality and quantity. The argument of women pulling themselves out of labourforce and retreating into the household care due to an increment in men’s earnings also sets the paradigm of the argument in terms of labour supply and thus circumvent from actually addressing the real problems of lack of demand for employment thus necessitating urgent steps to generate sufficient employment opportunities within the economy. From the estimates that are available it is clear that the economy is suffering from a large-scale deficit of employment opportunities not only for women but for all.
Unfortunately, since the release of the estimates, several governmental opinions (published in leading dailies) have been trying to overturn the important issue of ‘jobless’ growth into a rosy picture of booming incomes and resultant well-being. While such tendencies do not augur well for those who have been arguing for it, in the long run, such a situation of reduced employment would eventually lead to lowered output. It would then also be detrimental to the high GDP growth rates, in which the government is reveling currently. Furthermore, given the current state of government affairs, it would rather be prudent on part of the government to accept and address the issues in the light of the ingenuous problems rather than trying to misrepresent them!