Employment
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Picture Question – Many MNC’s sell football made in houses of Jalandhar, Punjab.
Mahatma Gandhi – Education and training through a variety of workers including craft.
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Meaning of worker – A worker is an individual, who is involved in some economic activity.
Economic activity is that which contributes to GDP.
473 million workers 473 million workers
473*70% men 473*70% rural areas
473*30% women 473*30% urban areas
Questions
1. Why do we have more women workers in rural areas as compared to urban?
a. Poor economic condition of the people of rural areas forces them to work
more.
b. High dropout rates – Due to poor economic conditions the drop out rate is
also high in rural areas
c. Better economic condition of the people in urban areas, therefore women of
urban areas have family pressure not to work.
d. Agriculture Diversification (poultry, fisheries) Rural women is employed in
this also.
2. Why do we have more workers in Rural areas as compared to Urban?
a. Poor economic of the people of rural areas forces them to work.
b. High dropout rates – Due to poor economic conditions the drop out rate is
also high in rural areas.
c. Urban people will work if these skills match there work but rural people have
no such choice.
3. Why more men workers as compared to women worker?
a. Same
b. Same
c. Women work is not considered productive.
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Meaning of worker: Worker is an individual who is involved in some economic activity to
earn a living.
Who all are included in workers?
It is generally believed who are paid by the employers are workers, however this is not true.
• It also includes self-employed persons, like shopkeepers, barbers, cobblers, etc.
• It also includes those people who remain temporarily absent from work due to
illness, injury or other physical disability, bad weather, festivals, social or religious
functions or some other reasons.
• It also includes those people who help the main workers. It means, all those who are
engaged in economic activities, in whatever capacity, are workers. So, the term
workers include all those people, who are engaged in work, whether for others (i.e.,
paid workers) or for themselves (self-employed workers).
Nature of Employment in India is Multifaceted
• Some get employment throughout the year, while others get employed for only a
few months in a year, like seasonal workers.
• Many workers do not get fair wages for their work.
• While estimating the number of workers, all those who are engaged in economic
activities are included as employed.
Labour Force
All persons who are working (have a job) and though not working, are seeking and are
available for work, are deemed to be in the labour force.
Labour Force = Persons working + Persons seeking and/or available for work.
In other words, Labour Force is the total of employed and unemployed persons.
Work Force
The number of persons, who are actually employed at a particular time are known as Work
Force. It includes all those persons who are actually engaged in productive activities. Work
force does not include unemployed people, i.e. all those people who are willing to work but
do not get work are excluded.
Work Force = Labour Force – Unemployed People
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Participation of People in Employment
“Worker-Population ratio” is an indicator which is used to analyse the employment situation
in the country. Worker-population ration refers to the ratio of the total number of workers
to the total population. It is generally expressed in percentage.
Worker Population Ratio = 𝑇𝑜𝑡𝑎𝑙 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 (𝑜𝑟 𝑡𝑜𝑡𝑎𝑙 𝑤𝑜𝑟𝑘 𝑓𝑜𝑟𝑐𝑒)
“Population is defined as the total number of people who reside in a particular locality at a
particular point of time.”
Worker-Population Ratio in India (2017-18)
• Participation Rate: For every 100 persons, 34.7% are workers in India.
• Higher Proportion of Rural People: In urban areas, the proportion is 33.9%, whereas
in rural India, the ratio is about 35.0%.
• Employment Opportunities: Rural people have limited resources and participate
more in the employment market. On the other hand, urban people have a variety of
employment opportunities. They look for the appropriate job to suit their
qualifications and skills.
• Education Level: In rural areas, many do not go to schools or colleges and even if
some go, they discontinue in the middle to join the workforce. In urban areas, a
considerable section is able to study in various educational institutions.
• Higher Proportion of Male Workers: As compared to females (16.5%), more males
(52.1%) are found to be working. Men are able to earn high incomes and, therefore,
families discourage female members taking up jobs.
• More Women Workers in rural areas: Ratio of men workers in rural areas (17.5%) is
more than the women workers in urban areas (14.2%). It happens because people in
rural areas cannot stay at home due to their poor economic condition.
• Underestimation of Women Workers: The number of women workers in our country
are generally underestimated because many activities undertaken by them are not
recognised as productive work. For example, many women are actively engaged in
activities within the house and at family farms, but are neither paid for such work,
nor they are counted as a worker.
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Meaning of Employment
Employment is an activity which enables a person to earn means of living.
Difference between Self-employment and Wage employment.
Self-employment Wage-employment
An arrangement in which worker uses his An arrangement in which a worker sells his
own resources to make a living. labour and earns wages in return.
• Regular Workers – Worker engaged by
someone and is paid wages on regular
basis.
• Casual Workers – Worker who is
casually engaged and gets
remuneration for work done.
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Distribution of Employment by Gender
From the Pie diagrams, the following points are noticed:
• Self-employment is a major source of livelihood for both men (52%) and women
(52%).
• Casual workers account for the second major source for both men (24%), whereas
women from only 21%. Lesser women are found in regular salaried employment
because:
o Jobs generally require skills and a higher level of literacy.
o Lack of mobility among women in India due to social constraints.
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All Economic activities are divided into following 8 different industrial divisions:
1. Agriculture
2. Manufacturing
3. Construction
4. Transport and storage
5. Mining and quarrying
6. Electricity, Gas and Water supply
7. Trade
8. Services
For simplicity, all the working persons engaged in these divisions can be clubbed into three
major sectors:
1. Primary Sector: It includes (i) and (ii), i.e Agriculture and Mining and Quarrying
2. Secondary Sector: It includes (iii), (iv) and (v), i.e Manufacturing, Electricity, gas and
water supply
3. 31% of workers are engaged in the service sector.
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Distribution of Rural – Urban Employment in Different Sectors
The distribution of Rural-Urban employment in the different sectors is depicted through the
above piechart.
Employment in Rural Areas
1. 59.8% of the workforce in rural areas are engaged in primary sector (agriculture and
mining and quarrying).
2. 20.4% of rural workers are working in secondary sector (manufacturing industries,
construction, and other divisions).
3. Service sector or Tertiary sector provides employment to 19.8% of rural workers.
Employment in Urban Areas
1. In case of urban areas, primary sector has the least share with just 6.6%. So, activities like
agriculture or mining are not the major source of employment in urban areas. 2. The
secondary sector gives employment to about 34.3% of urban workforce. 3. People are
mainly engaged in the service sector with 59.1% of urban workers.
Distribution of Employment (Male-Female) in Different Sectors
The share of male-female employment in different sectors is shown with the help of
Percentage bar diagram depicted in the following figure (Also Refer Table)
From the given figure, the following conclusions are interpreted:
Male Employment
• 40.7% of male population is concentrated in the primary sector.
• 26.5% of male workers are engaged in the secondary sector.
• Service sector provides employment to 32.8% of male workers.
Female Employment
1. Women workers concentration is also very high in the primary sector. 57.1% of the
female workforce is employed in the primary sector, whereas only 40.7% of males work in
that sector. It happens because men get opportunities in both secondary and service
sectors.
2. Only 17.7% of female workforce are employed in the secondary sector.
3. The service sector gives employment to 25.2% of female workers.
GROWTH AND CHANGING STRUCTURE OF EMPLOYMENT
Growth of Employment and Gross Domestic Product (GDP)
Fifty years of planned development have always aimed at expansion of the economy
through increase in national product and employment.
● During 1950-2010, GDP of India grew positively and was higher than the employment
growth.
• There was always fluctuation in the growth of GDP, but employment grew at the rate of
not more than 2%.
• However, in the late 1990s, employment growth started declining and reached the level of
growth that India had in the early stages of planning.
• During these years, the gap between the growth of GDP and employment was widening.
This trend is termed as 'Jobless Growth'.
• Jobless Growth refers to a situation when the economy is able to produce more
goods and services without a proportionate increase in employment opportunities,
i.e. economy tends to rise due to technology without any increase in the level of
employment.
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Changing Structure of Employment
The development strategies in many countries, including India, have always aimed at
reducing the proportion of people depending on agriculture.
• In 1972-73, 74.3% of workforce was engaged in primary sector, which declined to
44.6% in 2017-18. It shows substantial shift from farm work to non-farm work.
• Secondary and service sectors are showing promising future for the Indian work
force as shares of these sectors have increased from 10.9% to 24.4% and from 14.8%
to 31% respectively.
Let us now discuss the distribution of workers as self-employed, regular salaried
employees and casual workers.
Casualisation of workforce
Over the last three decade (1972-2018), there has been considerable shift of self-
employed and regular salaried employed to casual wage work. This process of moving
from self-employment and regular salaried employment to casual wage work is known
as casualisation of workforce.
• Self-employment: Although, it continues to be the major employment provider,
but its share declined from 61.4% in 1972-73 to 52.2% in 2017-18.
• Regular salaried employment: There is an increase in share from 15.4% in 1972-
73 to 22.8% in 2017-18.
• Casual workers: Their share has increased from 23.2% in 1972-73 to 25% in
2017-18.
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Informalisation of Indian Workforce
Since independence, the main objective of Indian Planning is to raise the standard of living
of the people, by providing job and job security. It has been stressed that industrialisation
would bring surplus workers from agriculture to industry with better standard of living.
• However, even after 70 years of planned development, more than half of Indian
workforce depends on agriculture as the major source of livelihood.
• Over the years, the quality of employment has also deteriorated. Even after working
for more than 10-20 years, some workers do not get maternity benefit, provident
fund, gratuity and pension.
• Employees in the private sector get a lower salary as compared to employees doing
the same work in the public sector.
• The employment structure in India can be studied with respect to two kinds of
sectors:
▪ Formal or Organised Sector
▪ Informal or Unorganised Sector
Informalisation of Workforce refers to a situation whereby the proportion of workforce in
the informal sector to total workforce increases.
Basis Formal Sector Workers Informal Sector Workers
Meaning Workers who work in Workers who work in
organised sector are known unorganised sector are
as Formal Sector Workers known as Informal Sector
Workers.
Social Security Benefits They are entitled to social They are not entitled to
security benefits such as social security benefits.
provident fund, gratuity,
pension, etc
Labour Laws Economic interest of There are no such Labour
workers in formal sector is Laws of workers of informal
protected through Labour sector.
Laws.
Trade unions Workers can form Trade No such trade unions exist
Unions to protect their for informal sector workers
interests.
Earnings They earn more than the They earn less than the
informal sector workers. informal sector workers.
Share in Work force Formal Sector Workers Informal sector workers
account for just 6% account for approx. 94% of t
(approx.) of total work
force.
Distribution of Workforce in Formal and Informal Sectors
As the economy grows, more and more workers should become formal sector workers and
the proportion of workers engaged in the informal sector should decrease. However, the
situation in India is very discouraging. Refer the table given below.
Category Number of Workers (in millions)
Male Female Total
Formal sector 24 6 30
Informal sector 310 133 443
• Formal vs Informal: Out of total of 473 million workers in the country:
o 30 million workers are in the formal sector and the remaining 443 million are
employed in the informal sector.
o It means, only 6% of people are employed in the formal sector and the rest
94% are in the informal sector.
• Male vs Female
o In the formal sector, out of 30 million workers, 24 million (80%) are male
workers and only 6 million (20%) are women.
o In the informal sector, out of 443 million workers, male workers account for
310 million (70%) are remaining 133 million (30%) are women.
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Realising the Importance of Informal Sector
Due to failure of formal sector in generating employment, India started paying attention to
enterprises and workers in the Informal sector. With the efforts of International Labour
Organisation (ILO), the Indian government has initiated the modernisation of informal
sector enterprises and provision of social security measures to informal sector workers.
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Meaning of unemployment
The National Statistical office (previously it was known as National Sample Survey
Organisation) defines Unemployment as a situation in which all those who, owing to lack of
work, are not working nut 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.
In short, Unemployment refers to a situation in which people are willing and able to work
at the existing wage rate, but do not get work.
Sources of unemployment data:
There are three sources of data on unemployment:
1. Reports of Census of India
2. National Statistical office’s Reports of employment and unemployment
3. Directorate general of employment and training data of registration with
employment exchanges
All the three sources of data give different estimates of unemployment. However, they
provide us the attributes of the unemployed and the variety of unemployment prevailing in
our country.
Types of Unemployment in India
Present unemployment problem in India is mostly structural in nature. Let us discuss some
of the major types of unemployment in our country:
Disguised unemployment: Refers to a state in which more people are engaged in work than
are really needed.
Seasonal unemployment: refers to the unemployment that occurs at certain seasons of the
year.
Open Unemployment: Refers to unemployment in which persons are able and willing to
work at prevailing wage rate, but fail to get work.
Causes of unemployment
1. Slow rate of Economic Growth
2. Population Explosion
3. Underdeveloped Agriculture
4. Defective Educational System
5. Slow Growth of Industry
6. Decline of Cottage and Small-scale Industries
7. Faulty planning
8. Inadequate Employment Planning
9. Low Capital Formation
Remedial Measures for Unemployment
1. Accelerating Growth rate of GDP
2. Control of Population Growth
3. Development of Agriculture Sector
4. Encouragement to small-scale enterprises
5. Improvements in infrastructure
6. Special Employment Programs
7. Improvement of employment Exchanges
8. Creation of self-employment opportunities
9. Reform of Educational system and Skill Growth
10. Manpower planning
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Government Policies and Employment Generation
Government has taken many initiatives to generate acceptable employment, ensuring at
least minimal safety and job satisfaction. For example, Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA), 2005. MGNREGA aims at enhancing the livelihood
security of people in rural areas by guaranteeing 100 days of wage employment in a
financial year to a rural household whose adult members volunteer to do unskilled manual
work. This scheme is one of the many measures, whose adult members volunteer to do
unskilled manual work. This scheme is one of the many measures, which the government
has implemented to generate employment for those who need jobs in rural areas.
Since independence, the Union and State governments have played an important role in
generating employment or creating opportunities for employment generation. Their efforts
can be broadly categorised into two aspects:
• Government provides ‘Direct Employment’ by employing people in various
departments for administrative purposes. It also runs industries, hotels and
transport companies and hence provides employment directly to workers.
• With increase in output of goods and services of government enterprises, private
enterprises providing raw material to government enterprises will also raise their
output. As a result, the number of employment opportunities in the economy will
increase. This increase in employment is known as ‘Indirect employment’ by the
government.
Employment Generation Programmes
Self-Employment Programmes
1. Self-Employment Generation Programme (REGP): This programme was started by
the government to create self-employment opportunities in the rural areas and small
towns.
• It was implemented by Khadi and Village Industries Commission.
• Under this programme, one could get financial assistance in the form of bank loans
to set up small industries.
2. Prime Minister’s Rozgar Yojana (PMRY):
Under this programme, the educated unemployed from low income families in rural and
urban areas were given financial help to set up any kind of enterprise that generates
employment.
• PMRY attempted to generate employment by setting up 7 lakh micro-enterprises
during the Eighth Plan (1992-97).
• By 2003-04, 3 million people got employment under this scheme.
REGP + PMRY = PMEGP
The Indian Government merged ‘Rural Employment Generation Programme’ with ‘Prime
Minister Rozgar Yojana’ and introduced a new scheme called ‘Prime Minister Employment
Generation Programme (PMEGP)’ with effect from 01.04.2008. The main objectives of
PMEGP are:
• To generate employment opportunities in rural and urban areas through setting up
of new self-employment ventures; and
• To bring together widely dispersed traditional artisans and unemployed youth and to
give them self-employment opportunities at their place.
3. Swarna Jayanti Shahri Rozgar Yogana (SJSRY): SJSRY mainly aims at creating
employment opportunities for both self-employment and wage employment in
urban areas.
• This programme seeks to provide gainful employment through encouraging the
setting up of self-employment ventures of provision of wage employment.
• It is a centrally sponsored scheme, which is funded on 75:25 basis, between the
Centre and the States.
4. Swarnajayanti Gram Swarozgar Yojana (SGSY): SGSY aims at promoting micro
enterprises and to bring the assisted poor families (swarozgaris) above the poverty
line, by organizing them into Self-help groups (SHG’s).
• People who wish to benefit from this scheme, are encouraged to form self-help
groups (SHG).
• Initially they are encouraged to save some money and lend among themselves as
small loans.
• Later, through banks, the government provides partial financial assistance to SHG’s,
which then decide, whom the loan is to be given, for self-employment activities.
Wage Employment Programmes
1. Sampoorna Grammen Rozgar Yojana (SGRY)
2. National Food For work programme (NFFWP)
3. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
This act was passed in August 2005 in the parliament. MGNREGA aims at enhancing the
livelihood security of people in rural areas by guaranteeing 100 days of wage-employment in
a financial year to a rural household whose adult members volunteer to do unskilled manual
work.
• All those among the poor who are ready to work at the minimum wage, can report
for work in areas, where this programme is implemented.
• 57.4 million people had sought work under this scheme in 2019-20