Last week, we looked at the F1 urban consumer segment, which included households whose chief wage earners are school-educated skilled workers, living with their families, and are single or married without children. This week, the educational profile expands lower down the scale in the F2 segment to include households whose chief wage earners have very low education and skill levels.

The chief wage earners are still in their younger years, but the defining characteristic here is that they are all single and live alone; there is no family support here. These are young migrants, with families in villages or smaller towns, who have come to the cities for better prospects. They form quite a large group, the 10th largest in size with 2.6% of all urban households in India, with more than 1.8 million people.

Also Read | Indicus Analytics Research (Graphic)

Segment F2 (Graphic)

This segment is young—56% are less than 25 years of age — with low education; nearly a quarter having barely completed primary schooling. The work they find in the cities naturally pays low wages, and the median annual income is just Rs34,000, the second lowest among all urban segments. Though the F2 chief wage earners are mostly men, there are a few women here, too, making up a little under 10% of the segment. It is not easy for women with low education and skills to make it alone in the cities, and yet they are here, compelled by circumstances to leave home.

The F2 chief wage earners are in the cities to earn and send money back home. Nearly 70% have regular salaried jobs. While some are selfemployed, there are others who would be on daily wages, contractual labour, not sure of what the month ahead has in store for them. Though saving for their families would be a top priority for these young people, one disconcerting point about their household budgets is that the largest item in their consumption is food. Low-income households spend a much larger share of their expenditure on the most basic necessities, and this is one of the segments that is being hit the hardest by rising food prices, denting their savings and reducing the remittances back home.

Also Read | Previous articles in the Indicus Indian Consumer Spectrum Series

There would be those within this group, though, whose food expenses are being taken care of, at least to some extent, by their employers. In fact 32% of these households live in accommodation that is neither owned nor rented, that is, in premises provided by the employers, the largest share among all urban segments. This fits in with the life and occupational profile of this segment.

The chief wage earners here have a very diverse set of employment profiles when it comes to sectors—more than one-third have found work in the manufacturing sector. These would largely be those who have some skills and relatively higher school education. For others, hotels and restaurants are the dominant source of employment. F2, in fact, has the largest share in this sector among all urban segments. The sandwich sellers on Dalal Street in Mumbai form just one set that stands out here. Then there are the small tea shops that service big office complexes in metros and towns, the numerous little stalls on the roadside selling just one or two food items, the Udupi joints and others like them across the country—all these provide high scope for people who have no education and no skills. Without these food places, in fact, urban India would lack a lot of its spice. And then there are wholesale and retail trade and construction and real estate activities that make up the next two most important sectors — again, sectors that give ample opportunities for those who have little to offer but are willing and able to provide pure physical labour.

Indicus Analytics Research graphic by Shyamal Banerjee/Mint

F2 segment graphic by Ahmed Raza Khan/Mint

Indicus Indian Consumer Spectrum Series-XXVi

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