India’s problem is providing decent work, not just unemployment
India’s GDP is expected to grow at 7.3%, yet most of its workers in the informal sector are leading a poor quality life.
The global unemployment rate fell to five percent, the lowest figure since the global economic crisis of 2007-2008. Meanwhile, India’s unemployment rate stands at 6.1 percent, the highest in over four decades, according to a leaked National Sample Survey Office (NSSO) report.
We spoke to Jayati Ghosh, a development economist, who spoke about the methodology to gather data by the International Labour Organisation (ILO), and the need for immediate poverty reduction in India.
Despite the fall in the global unemployment rate after nine years, the report released by the ILO, a United Nations agency, said that the number of unemployed persons is set to increase from 172 million persons in 2018 to 174 million in 2020.
“This fall in the global unemployment rate is not great news to India as the report heavily relies on data from 2011-2012,” said economist Venkatesh Athreya.
The report categorises India as a lower-middle income country where workers live in extreme or moderate poverty. This term is known as working poverty and is prevalent among those who work in the unorganised sector. India leads the world in informal employment with over 80% of its workforce employed in this sector.
Although working poverty decreases with economic development, factors such as formalisation, job security, and compliance with labour standards are ignored by the government.
“One of the tragedies for India is that we have not been able to generate decent jobs,” said Jayati Ghosh, a development economist. Decent work deficits are high. This means lack of material well-being, economic security, equal opportunities, and scope for human development. It is often characterised by unattractive low-paying jobs.
Job opportunities for women, disabled persons, and those between ages 15 and 24 are much lower. “They are most likely to be self-employed, contributing family workers, or unpaid workers,” said Jayati Ghosh.
The gender gap is highest among Arab states, Northern Africa, and Southern Asia. Globally, the number stands at 48 percent for women and 75 percent for men. The report shows a 27 point difference between men and women in labour force participation rate. An Oxfam report shows that India’s gender pay gap stood at a 34 percent difference between men and women.
Labour market challenges arise due to the poor quality of work, high rates of unemployment, and gender inequality, and this relies on each country’s level of development. India’s biggest battle is dealing with poverty reduction as it is not dependent on economic growth.
“The government had an incredible opportunity to bring a positive change in 2014. Instead it covers up statistics by showing increase in employment with EPF numbers,” said Venkatesh Athreya.
India’s GDP is predicted to rise in the following year, yet providing decent work is not in the picture. “If our focus was not on GDP and instead on helping micro-businesses that provide opportunities then we have a chance of providing decent jobs,” said Jayati Ghosh.