EMPLOYMENT:GROWTH INFORMALISATION AND OTHER ISSUES

PREPARED BY RASHMI PANDEY

KV NO1 SURAT

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Second Page

WHY DO PEOPLE WORK

TO EARN LIVELIHOOD

• MEANING OF WORKER- anyone who is involved in economic activity even if he is temporarily abstain from the work
• MEANING OF LABOUR FORCE- all those who are in the working capacity whether employed or unemployed

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MEANING OF WORK FORCE-

• only those are included who are actually working.
• During 2011-12,India had about a 473 million strong workforce.
• rural workers constitute about three fourth of this 473 million
• About 70 per cent of the workers are men

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Participation of people in the employment

• WORKER POPULATION RATIO- it is an indicator which is used for analysing the employment situation in the country.
• If the ratio is higher, it means that the engagement of people is greater.

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Worker population ratio=total no. of workers 100

total population

Worker-Population Ratio in India-2017-2018

• For every 100 persons, about 35 are workers in India,
• More people are employed in rural areas
• More males are employed as compared to women
• In rural areas proportion of employed women is greater than urban areas

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Sex

Worker-Population Ratio

Men

Women

Total

Total

Rural

Urban

52.1

16.5

34.7

51.7

17.5

35.0

53.0

14.2

33.9

Why more people work in rural areas

• People in rural areas have limited resources to earn a higher income and participate more in the employment market.
• lack of education- Many do not go to schools, colleges and other training institutions, Even if some go, they discontinue in the middle to join the workforce
• Poor economic condition-In rural areas, people cannot stay at home as their economic condition may not allow them to do so.
• urban areas, a considerable section is able to study in various educational institutions.
• Urban people have a variety of employment
• opportunities. They look for the appropriate job to suit their qualifications and skills

Why less women work in urban areas

• Men are able to earn high incomes, families discourage female members from taking up jobs.
• Many household activities done by women are not recognised as productive work.
• underestimation of the number of women workers in the country

Types of workers

HIRED WORKERS

SELF EMPLOYED

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CASUAL WORKERS

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REGULAR WORKERS

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SELF EMPLOYED-

Workers who own and operate an enterprise to earn their livelihood are known as self-employed. About 52 per cent workforce in India belongs to this category

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CASUAL WORKERS-

Such labourers are casually engaged in others’ farms and, in return, get a remuneration for the work done. They are 25% of total workforce

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REGULAR WORKERS-

When a worker is engaged by someone or an enterprise and paid his or her wages on a regular basis, they are known as regular salaried

employees. They are 23% of the total workforce

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Distribution of employment by gender

Types of economic activities

Manufacturing

agriculture

industry

services

Oldest work

Agriculture

Mining and Quarrying

Electricity, Gas and Water Supply

Construction

Transport and Storage

Services

Trade

Distribution of employment in different sectors

growth and changing structure of employment

• Can be taken into two heads:-
• (1)growth of employment and
• (2)growth of GDP
• During the period 1950–2010, Gross Domestic Product (GDP) of India grew positively and was higher than the employment growth. However, there was always fluctuation in the growth of GDP. During this period, employment grew at the rate of not more than 2 per cent.
• Another disheartening development in the late 1990s-was employment growth started declining Scholars refer to this phenomenon as jobless growth.

Jobless growth

• Jobless growth is a situation when the level of output in the economy tends to rise owing to innovative technology without any perceptible rise in the level of employment.
• Jobless growth leads to chronic unemployment, even when there is a rise in GDP

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Growth of Employment and Gross Domestic product

Trends in Employment Pattern (Sector-wise and Status-wise), 1972-2018 (in %)

CASUALISATION OF WORKFORCE

• The process of moving from self-employment and regular salaried employment to casual wage work is known as casualization of workforce

Impact of Casualization of workforce

• Impact of Casualization of workforce leads to a situation when the percentage of casually-hired workers in the total workforce tends to rise over time

Sectors of economy on the basis of working conditions

Formal sector or organized sector

Informal sector or unorganized sector

Terms of employment are clear

Terms of employment are not clear

FORMAL SECTOR

• All the public sector establishments and those private sector establishments which employ 10 hired workers or more are called formal sector establishments and those who work in such establishments are formal sector workers.

INFORMAL SECTOR

• informal sector includes millions of farmers, agricultural labourers, owners of small enterprises and people working in those enterprises as also the self-employed
• This sector do not have any hired workers or less than 10 workers

FORMAL SECTOR V/S INFORMAL SECTOR

FORMAL SECTOR

• job security
• social security
• protection of labour laws
• paid holidays
• medical facility

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INFORMAL SECTOR

• no job security
• no social security
• no protection of labour laws
• no holidays
• no medical facility

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Formal Sector Employment

• The information relating to employment in the formal sector is collected by the Union Ministry of Labour through employment exchanges located in different parts of the country.
• out of about 30 million formal sector workers, about 18 million workers were employed by the public sector
• Here also men form the majority, as women constitute only about one-sixth of the formal sector workforce

PROPORTION OF PEOPLE EMPLOYED IN DIFFERENT SECTORS

• total labours -473 million
• labours employed in formal sector-30 million
• % of people employed in formal sector- 30/473*100=6%
• % of people in informal sector=100-6=94%
• formal sector workers, only 6 million, that is, only about 21 per cent (30/ 6×100) are women
• In the informal sector, male workers account for 69 per cent of the workforce

What is Unemployment?

• Unemployment refers to a situation when people are willing to work at the existing wage rate, and are able to work, but are not getting work.
• NSSO defines unemployment as a situation in which all those who, owing to lack of work, are not working but either seek work through employment exchanges, intermediaries, friends or relatives or by making applications to prospective employers or express their willingness or availability for work under the prevailing condition of work and remunerations

sources of data on unemployment

• There are three sources of data on unemployment-
• (1)Reports of Census of India
• (2)National Sample Survey Office’s Reports of Employment and Unemployment Situation, Annual Reports of Periodic Labour Force Survey,
• (3)Directorate General of Employment and Training Data of Registration with Employment Exchanges.

Types of unemployment

rural

urban

other

disguised

seasonal

industrial

open

Under

employment

structural

frictional

educated

cyclical

Causes of unemployment

• Slow Economic Growth
• Rapid Growth of Population
• Low Agricultural development.
• Lack of Irrigation Facilities
• Joint Family System(social constraints)
• Decline of Cottage and Small Industries
• Low capital formation
• Limited Mobility of Labour
• Inadequate employment generation

Suggestions to Solve the Problem

• Increase in Production
• Increase in Productivity
• High Rate of Capital Formation
• help to Self-employed Persons
• Educational Reforms:
• Technique of Production
• Cooperative Industries

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GOVERNMENT AND EMPLOYMENT GENERATION

• the government efforts can be broadly categorised into two —
• direct effort
• indirect effort

Direct effort

the government employs people in various departments for administrative purposes. It also runs industries, hotels and transport companies, and hence, provides employment directly to workers

Indirect effort

(1)Private companies, which purchase steel from it, will also increase their output and thus employment. This is the indirect generation of employment opportunities by the government initiatives in the economy.

(2)Employment generation programmes.-All these programmes aim at providing not only employment but also services in areas such as primary health, primary education, rural drinking water, nutrition, development of community assets by generating wage employment, construction of houses and sanitation, assistance for constructing houses, laying of rural roads, like MNREGA

Mahatma Gandhi National Rural Employment Guarantee Act 2005

• The Mahatma Gandhi National Rural Employment Guarantee Act 2005. It promises 100 days of guaranteed wage employment to all rural households who volunteer to do unskilled manual work.
• This scheme is one of the many measures the government has implemented to generate employment for those who are in need of jobs in rural areas.