Chapter Notes

Introduction

People work for many reasons. The most obvious reason is to earn a living. However, work is more than just a source of income. It gives us a sense of self-worth and helps us connect meaningfully with others. When people work, they are actively contributing to the national income and the development of the country. This is the real meaning of 'earning' a living. As Mahatma Gandhi recognized, work is so important that he insisted on including training in various crafts as part of education.

Studying a country's employment patterns helps us understand:

• The quality and nature of jobs available.
• How to plan and manage our human resources.
• The contribution of different industries and sectors to the national income.
• Social issues like child labour or the exploitation of marginalised groups.

Workers and Employment

To understand employment, we first need to know what counts as an "economic activity."

• Economic Activities: These are all activities that contribute to the country's Gross National Product (GNP). The GNP is the total money value of all final goods and services produced in a country in a year (Gross Domestic Product or GDP), plus the net earnings from foreign transactions (exports minus imports).

• Worker: A worker is any person engaged in an economic activity, regardless of their position. This includes not just employees but also self-employed individuals. Even someone who is temporarily absent from work due to illness, festivals, or bad weather is still considered a worker. People who assist main workers are also included.

In 2022-23, India's workforce was about 545 million strong. The key features of this workforce are:

• Rural Dominance: Since most people in India live in rural areas, the majority of the workforce is also rural.
• Gender Disparity: Men form the majority of the workforce, making up about 77%. Women account for about one-fourth of the rural workforce and only one-fifth of the urban workforce.

Participation of People in Employment

To analyze the employment situation in a country, we use an indicator called the worker-population ratio.

Worker-Population Ratio is the proportion of the country's population that is actively contributing to the production of goods and services. It is calculated by dividing the total number of workers by the total population and multiplying by 100.

A higher ratio means more people are engaged in economic activities, while a lower ratio suggests a large portion of the population is not directly involved in work.

According to data from 2022-2023:

• Overall Ratio: For every 100 people in India, about 41 are workers.
• Rural vs. Urban: The ratio is higher in rural areas (about 42%) compared to urban areas (about 38%). This is because rural people often have limited resources and fewer opportunities for higher education, leading them to join the workforce earlier. In urban areas, more people can pursue education and look for jobs that match their skills.
• Male vs. Female: More men are found to be working than women. The difference is especially large in urban areas, where only about 19 out of 100 females are engaged in economic activities, compared to about 30 out of 100 in rural areas.

One reason for lower female participation, particularly in urban areas, is that families with high-earning male members may discourage women from taking up jobs.

Self-employed and Hired Workers

Knowing the status of a worker helps us understand the quality of employment in a country. Workers can be broadly classified into three categories:

1. Self-employed Workers: These are individuals who own and operate their own enterprise to earn a livelihood. They are the largest group, making up about 57% of India's workforce.
2. Casual Wage Labourers: These workers are casually engaged by others and are paid remuneration for the work they do. They do not have regular jobs. They account for about 22% of the workforce.
3. Regular Salaried Employees: These are workers engaged by an enterprise or an individual and paid wages on a regular basis. This group makes up about 21% of the workforce.

Key Trends:

• Self-employment is the major source of livelihood for both men and women.
• In rural areas, self-employment is more common, largely because many people own and cultivate their own land.
• In urban areas, both self-employment and regular salaried jobs are significant, as urban enterprises often require workers on a regular basis.

Employment in Firms, Factories and Offices

As a country develops, its workforce typically shifts from agriculture to industry and then to services. We can see this by looking at how workers are distributed across three major sectors:

1. Primary Sector: Includes agriculture, mining, and quarrying.
2. Secondary Sector: Includes manufacturing, electricity, gas, water supply, and construction.
3. Service Sector (or Tertiary Sector): Includes trade, transport, storage, and other services.

Distribution of Workforce in India (2022-2023):

• The primary sector is the main source of employment for the majority of workers, employing about 46.1% of the workforce.
• The secondary sector provides jobs to about 24.9% of the workforce.
• The service sector employs about 29.0% of the workforce.

Rural vs. Urban Distribution:

• In rural India, about 60% of the workforce depends on the primary sector.
• In urban areas, the service sector is the biggest employer, accounting for about 60% of urban workers.

Gender Distribution:

• Women workers are highly concentrated in the primary sector (about 64%), while men have more opportunities in both the secondary and service sectors.

Growth and Changing Structure of Employment

For decades, India's development strategy has aimed to increase national output and employment.

Jobless Growth

Between 1950 and 2010, India's Gross Domestic Product (GDP) grew consistently, but employment growth was much slower, not exceeding 2%. In the late 1990s, employment growth declined even further, while GDP continued to grow. This created a widening gap between GDP growth and employment growth.

Changing Workforce Structure

Over the last five decades, there has been a significant shift in the distribution of the workforce:

• Sectoral Shift: The proportion of the workforce in the primary sector has declined from about 74% in 1972-73 to about 46% in 2022-23. In contrast, the share of the secondary sector rose from 11% to 25%, and the service sector from 15% to 29%. This shows a gradual move from farm to non-farm work.

• Status Shift (Casualisation): There has been a trend of people moving from self-employment and regular salaried jobs towards casual wage work. This process is called the casualisation of workforce. Although self-employment remains the largest category, the rise in casual work is a concern because it makes workers more vulnerable, as they lack job security and social benefits.

Informalisation of Indian Workforce

The quality of employment in India has been a subject of debate. Many workers, even after decades of service, lack benefits like pensions or provident funds. This can be understood by dividing the workforce into two categories:

1. Formal (Organised) Sector: This includes all public sector establishments and private sector establishments that employ 10 or more hired workers. Workers in this sector have regular income, job security, and are protected by labour laws. They can form trade unions and bargain for better wages and social security benefits.

2. Informal (Unorganised) Sector: This includes all other enterprises and workers. It consists of millions of farmers, agricultural labourers, owners of small enterprises, and the self-employed who do not have hired workers. Workers in this sector lack regular income and are not protected by the government. They can be dismissed without compensation.

The Reality of Informalisation:

• Contrary to the expectation that economic growth would lead to more formal sector jobs, the opposite has happened.
• As of 2011-12, only about 6% of India's 473 million workers were in the formal sector. The remaining 94% were in the informal sector.
• The government is the major employer in the formal sector.

Unemployment

Unemployment is a major issue in India. The National Statistical Office (NSO) defines unemployment as a situation where a person who is willing and available to work at the prevailing wage rate is unable to find work.

There are different types of unemployment found in India:

• Open Unemployment: This is when a person is able and willing to work but cannot find a job. They are openly looking for work.
• Disguised Unemployment: This occurs when more people are employed in a task than are actually needed. If some workers are removed, production does not fall. This is very common in Indian agriculture, where a whole family might work on a small plot of land that only requires two people.
• Seasonal Unemployment: This type of unemployment occurs when people are employed only during certain seasons of the year. Agricultural labourers, for instance, may find work during sowing and harvesting seasons but remain unemployed for the rest of the year.

Government and Employment Generation

The government plays a crucial role in creating employment opportunities. These efforts can be categorized as direct and indirect.

• Direct Generation: The government directly employs people in various administrative departments, and runs its own industries, hotels, and transport companies.
• Indirect Generation: When government-owned enterprises increase their output, they create demand for raw materials and services from private enterprises. This, in turn, boosts employment in the private sector. For example, increased production at a government steel plant leads to more jobs in private companies that use that steel.

The government also runs several employment generation programmes aimed at alleviating poverty. A key example is the Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA), which promises 100 days of guaranteed wage employment to rural households who volunteer for unskilled manual work.

Conclusion

India's workforce structure is changing, with new jobs emerging primarily in the service sector. Practices like outsourcing—where big firms hire smaller enterprises or individuals for specific tasks—are becoming common, and for many, the home is turning into a workplace.

However, these changes have not always benefited the worker. Employment is becoming more informal, with limited social security. The country has also experienced jobless growth, where GDP increases without a corresponding rise in jobs. This situation has compelled the government to actively create employment opportunities, especially in rural areas, to ensure a decent living for its citizens.